Charity review

I'm thankfully in a place where I can afford to give money to charity, and I've slowly built up a set of charities that I give money to. But I've never been that systematic about it. I've had a vague target for how much I want to give, I add new charities when they seem neat, I'll rarely drop a charity when it doesn't seem to be effective, and I probably spread my money out too much.

Recently, I followed a chain of blog references and discovered GiveWell, a site that's devoted to doing more in-depth analysis of charities than the basic financial analysis done by sites like Charity Navigator. In particular, they do literature surveys to try to dig into the effectiveness of particular interventions and take a closer look at how effectively a charity can use new donations.

After reading quite a bit on their site and some related sites, I sat down yesterday and did a comprehensive review of my goals and principles and then put together a new plan. Some of that may be interesting to other people, so I'll write up that process here. This will be somewhat US-centric, since charities vary a lot by tax regime, but I think some of the general principles will still apply elsewhere. (But most of my specific examples will be US charities.)

First, a few basic principles about charitable giving:

  1. Charity goals cannot be evaluated uniformly. Different types of organizations need different criteria. I've found that charities divide generally into ones that are trying to accomplish a specific task and ones that are trying to create political change. For the former, small and quiet organizations are often the best. For the latter, the charity has to get to a certain size before it's part of the conversation, and that involves a different set of tradeoffs.

  2. When you care about efficiency (number of lives saved or quality of life improvement per dollar spent), don't give money to organizations you've heard about via means other than word of mouth or third-party evaluations. This is for a simple reason: if the charity has successfully made you aware of it, that means they're advertising themselves to you. Advertising generally costs quite a bit of money. That's money they're not spending on whatever they're trying to accomplish.

    Excellent examples are many of the health research and education charities, such as the American Heart Association and the American Lung Association, or the massive disaster relief organizations like the American Red Cross. These are not efficient organizations. If you're trying to get the most impact for your dollar, this isn't a good place to spend it.

    As a special case of this, please don't ever give money to any organization that produces TV commercials showing starving children in Africa. If the commercial makes you want to give money, that's great; just don't give it to the organization on TV. TV commercials are extremely expensive, and those organizations are notorious for being some of the least efficient charities in existence (in some cases bordering on scams). You'll be lucky if 50% of your money actually goes to Africa, and the money that is spent probably isn't spent wisely.

  3. If your donation gets you a membership that comes with a glossy magazine, remember that means that the organization is spending your money producing that magazine. This is counted as program funding, not administrative costs, in sites like Charity Navigator because the charity probably counts the magazine as part of their educational mission.

    If you want to subscribe to the magazine and enjoy it, there's not necessarily anything wrong with this. But if you were giving them money to do something else, be aware that money is being used to produce the magazine (and the Christmas cards and the mailing labels and the tote bag) instead of doing things that you might consider program funding. For example, I stopped giving money to the Audubon Foundation because I want my environmental giving to go directly to protecting the environment, not towards printing calendars and making a glossy magazine full of bird pictures.

    As a counter-example, I consider the Southern Poverty Law Center to be one of the most effective US political charities, despite the fact that they produce a glossy magazine. That's because a large part of their mission is investigative reporting and research, and that magazine is how they publish that research. In this case, I both want to read the magazine and consider the magazine something that I'm happy to fund.

  4. Efficiency isn't everything. For some types of charities, the charity has to be huge in order to be effective. This is particularly true of political charities. For example, the ACLU is not a particularly efficient charity and has several fund-raising practices that I dislike. However, what the ACLU does requires that they have extensive media access and respect from legislators and the judicial system. It cannot be done effectively by a smaller and more efficient organization. Similar principles apply to a lot of political and environmental charities, and to some international aid charities such as Doctors without Borders (Médecins Sans Frontières).

If you're looking to increase the efficiency and effectiveness of your giving according to objective measures, I highly recommend reading through GiveWell's site. They recommend charities that avoid all the pitfalls above. You've probably never heard of them because they don't spend their money on advertising and marketing. However, keep in mind that efficiency isn't everything.

With those principles in mind, and after doing a lot of reading on GiveWell, I redid my charity plan by dividing my giving up into five categories with different goals.

Services. There are some things that I use that I think should be paid for by tax dollars but aren't, and are instead funded by charitable donations. I don't consider this charity in the same sense as the rest of this list. Rather, I'm paying for what I use plus some extra so that other people who can't afford it can use the service for free. Efficiency doesn't matter as much because there's usually only one organization supporting the thing that I personally use. Examples include my local PBS (public broadcasting) station, the non-profit that works with city government to support the local library system, and the trust that helps maintain the state parks where I go on vacation.

Education. This is a special category for me since I regularly give money to the community college I attended. I know the region and the college and have some idea of what they need and what matters to the students there, so I can make specific choices. I give all the money in this category to the same place.

Free software. Here, I know that my donations won't be used as efficiently in terms of quality of life as they could be if sent somewhere else, but this is my community and I want to support it because it's my community. Here, as with education, I have a lot more data and can pick and choose places that I think can use my money. Examples here are the Ada Initiative and the Free Software Foundation.

Politics. This is the hardest area for efficiency, since it's so difficult to measure effectiveness in any organization where much of the goal of the organization is to persuade politicians or the general public. I try to measure effectiveness by how many concrete actions the organization takes (rather than press releases), which is easiest for organizations like the ACLU or the EFF that file lawsuits or legal documents and requests. As mentioned above, I think the standout in this area is the Southern Poverty Law Center, but political charities are so targeted that I give to multiple charities to cover my range of interests. I've found environmental charities particularly difficult to evaluate, but the one that appears the most effective to me so far is the Environmental Defense Fund, so that's where I concentrate my environmental money.

I used to give to small political charities but have given up on that as basically useless, at least for national politics. I think the charity has to be of a minimum size to get anyone in government to listen to them.

Poverty and Health. This is where efficiency matters much more than size. GiveWell's analysis is very interesting here, and sadly shows that most interventions either don't work or at least can't be proven to work. Here, I abandoned nearly all of my traditional large charities and have gone almost entirely with GiveWell's recommendations, with two exceptions. I still cycle money through Kiva (a microfinance support charity) because I have a bit of an emotional attachment to it, although microfinance is looking increasingly suspect as an effective charity method and I may yet drop them. And I still give money to Doctors without Borders because, despite being less efficient, I think their size and history has won them an international credibility that lets them get into areas that smaller, more efficient charities wouldn't be able to help.

One of GiveWell's recommendations is my new favorite charity: GiveDirectly. All aid charities run a serious risk of having a colonialist bent, where rich countries come into poor countries and build things or tell them how to do things following the priorities of the rich countries. (This is one of the reasons why I prefer medical charities, since they're less susceptible to this.) GiveDirectly identifies the poorest people in a region (using a very transparent process) and transfers money to them directly using the M-Pesa cell system to spend however they choose, with no strings attached other than some due diligence to protect against fraud. This is refreshingly non-paternalistic and makes me far more comfortable than typical aid projects.

Originally, I was going to assign money into those buckets and then break the buckets down further, but I ended up not quite doing that. The services bucket is more driven by the services I use than by an even allocation. Of the rest, it goes approximately three shares to poverty and health, two to politics, and one each to education and free software.

I think I've managed to eliminate most of the places where I'm giving money to multiple organizations that do the same thing, but I'm still spreading my money rather widely and could stand to focus it more. That's hard, though; there are a lot of different things that I care about, and political charities in particular aren't very interchangeable.

I'm currently not giving locally very much, which might be worth changing. The easiest way to do so would be to find a good local food bank and start donating to them (giving cash, not food).

For a more comprehensive list of charities I support, see my charities link page.

Posted: 2012-12-27 12:23 — Why no comments?

Last modified and spun 2013-11-06