How to Donate Responsibly

On the subject of charitable giving, people tend to talk in numbers, how much to give instead of how well. But think about it: your donated dollar can multiply its impact if it goes to a carefully researched and well-managed program instead of a less reflective, less effective one. So why stop at giving when we can give responsibly?  GiveWell is an independent, nonprofit charity evaluator that researches hundreds of charities to find programs that are “proven, cost-effective, underfunded and outstanding.” They only recommend one percent of the charities they review. It’s not that their standards are too high; it’s that the incentive structure within philanthropy is set up to reward and respond to donors rather than recipients, which leads to overfunded, under-evaluated aid programs that do little good, if any. A proper understanding of the aid recipient’s unique needs and circumstances is crucial to designing effective, respectful programs, but when donors are attracted to pictures and narratives rather than a track record of success, this dimension of responsible aid gets brushed aside.  Take the charity Water for People. They started an initiative to install water pumps powered by the spinning of playground merry-go-rounds in poor rural villages around the world. The idea was that kids would play on the merry-go-round and save their parents time and energy. Western donors found the idea emotionally appealing, cute and memorable. They were quick to provide funding—even the U.S. government pitched in. As it turns out, however, the merry-go-rounds just made the water physically harder to pump. Kids didn’t play on them, and grown men and women were left to do the humiliating work of turning a merry-go-round just to get some clean water. Here is a case where a charity was more responsive to the whims and desires of the donors than the needs of its recipients, at great cost.  This is not to say that all charitable giving is useless. But until we, as individual donors, change the culture of charitable giving, the vast majority of charities will remain bloated and mediocre. If more donors insisted on high-quality evidence of impact and transparency, non-governmental organizations (NGOs) would be encouraged to have their programs periodically evaluated. If the impact assessment came back negative or weak, transparency would demand making that information public. Smart donors would give elsewhere, encouraging NGOs to learn from their mistakes. We can’t change the fact that cash-strapped charities will still respond primarily to the wishes of the donors. We can donate responsibly and shift the incentive structure toward a system that addresses the actual needs of recipients.  Professor Andrew Schroeder over at Claremont McKenna College has a great analogy for this twisted incentive structure: imagine you’re learning to box, but every time you let your guard down, someone else gets punched in the face. You’re never going to learn how to box because you’ll never get hurt. Until donors get smart, think critically and demand more from charities, other people will continue to bear the burden of our failures.

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