Saturday, August 23, 2014

On Donating to Charity


An article makes the good point that people often donate money to charities, missing opportunities to donate to other charities where it might both better meet their objectives and do more real good.  Some charities are not good bets -- they spend too much of the money that they collect raising still more money, of which they will again spend to large a portion on fund raising. Other charities are poorly managed, and don't get much bang for the buck. Still other charities focus on programs that are less cos-effective than other available programs with the same objective. I quote from a portion of the article:
There are also tools that can inform your decisions. Charity Watch, for example, measures the effectiveness of non-profits. They look at the ratio of spending on actual programs to administrative costs. According their website: "Rather than merely repeat charities' self-reported finances using simplistic or automated formulas, we delve deep to find the real story of how efficiently charities use your donations to fund the programs you want to support." 
Instead of focusing on financials, GiveWell has earned a reputation for scouring the globe to find charities that are most likely to touch the lives of the maximum number of people per dollar spent. As they put it, they conduct "in-depth research aiming to determine how much good a given program accomplishes (in terms of lives saved, lives improved, etc.) per dollar spent." 
Charity Navigator, meanwhile, is another well-respected watchdog that looks at the overhead-to-program spending ratio of various non-profits, though they say they're moving toward a more robust calculus that will track how well charities are solving the problems they set out to tackle. For now, they offer a list of tips for savvy donors here.
If you want to donate money to save lives, as the quote at the top of this post suggests, you probably will save more lives focusing on health services in poor countries. The mortality is higher there, and a large fraction of the deaths in developing countries are from preventable causes. Simple interventions such as immunizations can save lives. Improving hygiene, reducing exposure to the vectors of vector borne diseases, and improving nutrition can save lives. Moreover, the costs for providing those services can be very low in developing countries, as pay rates are low and sine many organizations effectively use unpaid volunteers.

If you wish to save lives, as the visual aid above suggests, there is some justification for donating to charities that address diseases that kill lots of people. Of course, you might prefer to donate to charities that help people live better, rather than helping them to live longer. Funding a program that provides schooling to kids who would not otherwise get a primary school education makes sense in this way (although educating a girl may save her children's lives when that girl grows up and has children).

It is not the case that a dollar donated to a charity focusing on heart disease or cancer will contribute more to saving lives than one donated to preventing a less prevalent disease. Donating to a program that is in great need of funds, but that uses those funds very effectively to combat a neglected disease might do more good. Lots of children in developing countries die as a result of dehydration resulting from diarrhea; a mother can save the life of such a child by adding a low cost packet of salts to a bottle of boiled water and giving it to the child to drink. A non-governmental organization might teach mothers in a poor village this technique and save lives are a very low cost per life saved.

The best choice for your money may also depend on your time frame. Donating to a research program to develop a malaria vaccine, for example, will save no lives in the near future. However, malaria is a major killer and if a vaccine can be developed it will save many lives per year for many years. If you want results now, perhaps you should fund a project that promotes bed net use in Africa. If you are thinking about deaths averted in this century, perhaps you should consider donating to research on vaccines.

The article that triggered this post was occasioned by the campaign to promote donations to ALS charities that focused on the "ice water challenge". The article suggest that the dumpees may not be getting the best value for the money that they donate. Perhaps, would they have donated money to any charity instead of the ALS Foundation, had there not been this challenge? Certainly the cost of the 60,000 emails sent to the mailing list of the Foundation was used very effectively since at essentially zero cost, it has generated tens of millions of dollars of donations.

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