A Month of Philanthropy

Charity wordsIn December I decided to donate to charity for the first time.   I won’t explain here what charities I donated to or how much… I’ll just say that I mostly chose causes that I care about and think are important.

I’ll also explain a few interesting concepts that I learned while educating myself on how to donate effectively (these are all explained in the videos listed at the bottom of this blog post). Here are the concepts:

The percentage of your donation that goes to the cause isn’t important; what matters is the results generated by your donation

Peter Singer uses the example of helping blind people.  If you wanted to help blind people one thing you could do is donate money to organizations that train guide dogs. In America it apparently costs about $40,000 to fully train a guide dog and to train the blind person to work with the dog.  And it costs $20-$50 to cure a blind person in a developing country if they have trachoma.  So if you have $40,000 to donate, you could either train one guide dog, or you could actually cure over 1,000 people of their blindness.  I think it’s clear what the most effective use of the $40,000 would be.

Even if the guide dog organization put 90% of your donation towards training the dog and the blind person and used only 10% for their own overhead, whereas the organization that cured trachoma put only 10% of your donation towards the cause and used 90% for their own overhead… your donation would still generate far greater results in the hands of the trachoma-cure organization.

Salaries of the leaders of charitable organizations aren’t important

What I’m referring to here is the fact that high salaries of the leaders or employees of charities aren’t necessarily something to get your panties in a knot over. Dan Pallotta pointed out in his TED talk (link below) that charities are similar to businesses in the sense that it’s necessary to pay competitive salaries to get high quality leaders. A philanthropist may balk at the fact that the leader of a charity has an extremely  high salary… but to get an effective leader, you have to pay the market price of an effective leader.

Would you rather have a mediocre CEO paid $100k per year leading a charity, or would you prefer a high-quality CEO paid $400k per year who can run an organization that attracts $20 million more in donations and uses those donations twice as effectively?  Why insist that charities pay their CEOs low salaries, letting the business world (which pays higher salaries) suck up all the high-quality CEOs?

We have a moral obligation to donate to charity

If you were going to buy yourself new shirt that you really didn’t need, and outside the store there was a child who was starving and on the verge of death, your conscience would probably tell you to spend your money to buy the child some food rather than on the shirt. If the child was on some other continent rather than right in front of your eyes, does that reduce the moral obligation? Peter Singer says no, and I think I have to agree.

This line of reasoning of course can be taken too far… One could argue that you need to be so altruistic that you give away all of your money and possessions and wind up on the brink of death yourself, since there ‘s always someone worse off than you who you have a moral obligation to help. It’s hard to know exactly where to draw the line, but I think it’s safe to say that at least some charitable giving is a good idea.

Videos

I watched a lot of talks online about philanthropy and how to donate effectively. Here are the ones that I found worthwhile:

The way we think about charity is dead wrong – Dan Palotta

The how and why of effective altruism – Peter Singer

Poverty, money — and love – Jessica Jackley

How to buy happiness – Michael Norton

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