More than once, I have found myself enthusiastically telling a friend or family member that I was considering donating to a charity. Nine out of ten times, however, what I hoped would turn into a conversation about inspiring past donation experiences, turned into a conversation about what sounded like a broken system that I should probably stay far away from.
I kept wondering, how could there be such a discrepancy between the outwardly good intentions of most charities and our conviction of their lack of integrity?
I decided to dig a bit deeper and define what my own attitude toward charity donations was and what it should be. This exploration, in turn, would lay the groundwork for my own donation habits and strategies. In this blogpost, we’ll get into the concerns people have about donating to charity, how these concerns stand in the way of doing good, and how you can overcome them.
Some concerns around charity donations
Let me start off by saying that I have never gone into a conversation about aid completely oblivious to commonly-held beliefs on the matter. In fact, for years, I have personally stayed away from donating to charities all-together and favoured local volunteering instead. Donating my time and skills, I found, allowed for a greater level of transparency, as I got to witness the immediate results of my actions.
I couldn’t imagine being alone in my hesitation around charity donations and tendency to favour local initiatives. It turns out that I wasn’t. In this study, researchers conducted a UK-based poll to track people’s attitudes toward (government) aid spending, global poverty, and development. The study found that “marginally engaged audiences feel a push/pull – whilst they may feel a sense of injustice or unfairness they are pulled away by fears of waste and corruption or drawn towards UK causes”.
“Donating my time and skills, I found, allowed for a greater level of transparency and immediate results of my actions.”
I recognised this dilemma and decided to list some of my other concerns with aid by governments and charities. This exercise would be the first step in making more informed and impactful donation decisions:
- Established or government-led doesn’t equal better. From first-hand experience, working with large charities and local government, I observed high overhead costs, a tendency to move slowly, and an overall resistance to change and innovation.
- Lack of transparency. The larger and further-away an organisation is, the harder it becomes to hold them accountable for their influence and spending. Even a popular favourite, the Bill & Melinda Gates Foundation, hasn’t dodged all criticism as some are concerned with their lack of transparency and the reach of its influence.
- Absence of data-driven decision-making & impact measuring. For as much as I would like my donation not to be squandered or disappear into someone’s pockets, I also want to know what the societal return on my donation will be. Without informed, structural goal-setting by charities, using data and metrics, it becomes hard for donors to measure the real-life impact of their contributions.
When caution stands in the way of doing good
By examining our concerns one by one, we can determine if they are valid enough to keep us from donating money to the causes we care about. The above-mentioned Aid Attitude Tracker (AAT) study also showed that, despite attitudes toward global poverty having stayed consistent over the past decades, participation in activities to reduce global poverty (including donating and fundraising) is slowly decreasing.
Source: Aid Attitude Tracker (AAT) study
For many of us, it seems our attitudes toward aid in a general sense might also be keeping us from making meaningful contributions to the organisations that could use our help and for which donations would mean significant advances of their progress. After some research, I was able to put my main concerns to bed, as for each large charity that I had grown cautious of I found several initiatives led by diligent and driven experts that truly are shifting needles.
Beat your biases and make more intentional charity donations
Realising that I could become a more efficient donor and form my own opinions, rather than following the flock, made me feel more confident about my decision to start donating to charity. Here, I have listed some of the things to watch out for when donating to charity – including your own biases.
Stay critical of emotional messaging and perceived authority
The biggest hurdle we face when making efficient charity donations is our attachment to familiar charities. It is no secret that large, well-known charities tend to have significant marketing budgets behind them. You may argue that you have never been convinced to make a donation upon watching a charity advert, and yet, it appears that our continuous exposure to big household names might just be doing the trick. In fact, between 2016 and 2017, Cancer Research UK received £442 million from private donations alone. To make the most impactful donations, we should base our decisions on data, not on any emotional preference.
Just like large charities, authorities such as the United Nations may also influence which causes we end up donating to. Since their implementation in 2015, the UN Sustainable Development Goals have become somewhat of a framework onto which private enterprise, charities, and individuals can map their philanthropic course of action. Yet, if our experience with their precursors – the Millennium Development Goals – has taught us anything, it is that the successful design and monitoring of the 17 goals and over 200 unique indicators requires a “huge amount of data collection, analysis and management”. Even for an organisation as large as the UN, the task of collecting a significant amount of equally relevant data about every single development issue can seem overly ambitious.
However, when faced with 17 causes to ‘choose’ from, ranging from ‘no poverty’ to ‘life below water’, an individual donor may act under the assumption that the goals have been designed using equal amounts of data, making every goal as urgent as the other. And this, all the way up to 2030. G House Innovation suggests:
“it will cost upwards of US $45 trillion over 15 years to fulfil the SDGs and meet their many targets. But (that) funding currently flows unevenly and in directions determined almost exclusively by personal or organisational interests.”
Together with the OECD, they have surveyed experts to find out which SDGs required action first. Find the goals in order here.
Determine your donation’s efficiency
By now, you may have started thinking about your own assumptions and biases that are keeping you from making the most efficient charity donations. Such biases may be the result of an emotional attachment to a (local) charity, frequent exposure to big household names, a desire to see your own community thrive, or a fear of corruption.
However, by donating to large, local charities you may not actually be bringing about as much positive change as you would hope. In fact, the Marginal Benefit (MB) of funding an already well-funded charity is usually lower than donating to a charity overseas. The first reason being that charities operating locally tend to address difficult issues (e.g. youth crime) for which solutions may require more expertise or long-term socio-economic changes. Charities alone, however, are unlikely to solve such deep-rooted societal problems. The second reason is that the more resources a charity already has at its disposal, the less each individual contribution is likely to make much of an added impact. This means your pound will probably be spent less effectively. On the other hand, donating to people living in the poorest parts of the world, with high risks of infectious diseases and a lack of access to proper sanitation, can be life-saving.
For example, if you are thinking of donating 20 pounds a month (240 pounds / year) to say, Charity Research UK, it might be worth considering how much likelier you are to trigger (immediate) positive change if you spend that same amount on the purchase of about 130 malaria nets, lasting 3 to 4 years. At the same time, by donating, you would assist the growth of a highly-impactful charity.
Confront your own biases and ask yourself these questions before choosing which charity to donate your money to:
- Is a solution to this specific cause most urgent right now?
- Is this charity, as opposed to (local) government or private enterprise, likeliest to shift the needle on problem X?
If you do not know where to start, there are impartial initiatives such as GiveWell which rank the most effective charities to donate to. Find their ranking here.
How many donations is too many?
Let’s discuss donation frequency. If I told you that you had to choose between two options: option A, ‘donate 180 pounds to a single charity once a year’ or option B, ‘donate 5 pounds a month to three different charities for a year’, which one would you choose? If you are anything like me, and most other donors, you are probably inclined to go for option B. Some people may choose to diversify their donations because they do not have the available funds to donate the full amount at once. Others, may do it as an attempt to minimise risk, knowing that they could ‘undo’ a potential mistake by cancelling future contributions to one or all charities. Whatever the reasoning may be, Baron & Szymanska (2011) have found that charity donors, overall, tend to favour diversification.
Beyond risk-minimisation, the reason people may choose to donate to several different charities each month is because they operate under the false impression that, as a single donor, they have a significant effect on the accomplishments of each charity. Even for small donations, they believe this to be true. Instead, it is argued that donors interested in donating efficiently, “should identify a charity that does the most ‘good’ per pound and make their entire contribution to that one charity.” By doing this, donors will always run the risk of being wrong about donating to charity X. If they are right, however, they will have meaningfully contributed to that charity’s real-life impact.
A new moral duty
In many cultures, giving back has always been considered somewhat of a moral duty. One that should not be too critically examined, as asking too many questions about where our donated money will end up can make us seem harsh. We might try to ease our skepticism by telling ourselves that charities are doing the best they can and that we should give them some time. We may even justify that we can live perfectly well without those 15 pounds a month.
And yet, by exploring some of the most commonly-held concerns people have about donating to charity, we saw that many donors have run out of patience. Our negative past experiences have left us in the dark about where our donations ended up and for many of us have even turned us away from making any more charity donations. I argue that even with a contribution of 15 pounds a month, we are entitled to very clear insights into the societal return of our donations. It is time to define a new moral duty for individual donors: to donate only to the most efficient charities and support their prosperity.