How to optimize America’s charitable giving

I had a fascinating conversation a couple of days ago with Charlie Bresler, the executive director of The Life You Can Save, a nonprofit which he started with Peter Singer, the godfather of effective altruism. The charity’s purpose is not really to evaluate charities; they mostly outsource that work to GiveWell and ImpactMatters. Rather, the idea is to effectively communicate the idea that certain charities are the best places to give, and to try to move money towards those charities.

The big question facing The Life You Can Save, then, is not the question of which charities are the most effective. Rather, it’s the question of how to change human behavior: How to get people to donate less money to less-effective charities, and more money to more-effective charities.

Importantly, this means effectively ignoring the kind of people who have read their Peter Singer, or who are otherwise already persuaded by the Effective Altruism movement. Preaching to the converted won’t help, since most of those people are already giving most of their charitable donations to efficient and effective causes.

GiveWell mobilizes tens of millions of dollars every year from such people, for instance, which is great – but most of that money comes from a single source, Good Ventures, and in any case even $100 million is tiny in proportion to the $400 billion or so that Americans donate to charity, or the $280 billion that’s donated by individuals.

The big picture, when it comes to charitable giving, is that religious charities get the largest chunk, with educational institutions in second place. International charities, which comprise almost all of the top-recommended charities from the likes of GiveWell, receive only about 6% of the total.

That number represents an enormous opportunity: If people simply gave 88% of their money domestically instead of 94%, then that would mean a doubling of donations to international charities.

The problem is that simply announcing a list of effective international charities doesn’t work – not at scale, anyway. It will appeal to the people who are already predisposed to give to such causes, and it seemingly has no real effect on anybody else.

Which makes sense. Charitable giving doesn’t change very much, over the years: it stays pretty constant at about 2% of GDP, and it generally goes to causes where people have strong personal ties. If you go to church regularly you’re likely to give quite a lot to your church; if a loved one died of a certain disease, that makes it much more likely you will give to a charity devoted to that disease. And, of course, if you went to a certain university, that makes it vastly more likely that you will donate to that university.

On top of that, people tend to give where they’re being nudged to give, not by top-ten lists but rather by their friends, family, and other people of influence. If your niece is running a half-marathon for charity and asks you to donate, you’re going to donate; you’re not going to give her a lecture on effective altruism and tell her that her pet cause is suboptimal. Similarly, if a company announces a matching-gift program for its employees, those employees are going to end up being nudged into the CEO’s pet cause. And if a bunch of television networks organize a telethon, the people watching aren’t going to calibrate their donations on the basis of the exact charities receiving the money. What matters is the cause, much more than the specific destination.

Here, then, is my very badly-drawn attempt at visualizing what needs to be done. You can’t easily redirect heartfelt donations to something bloodless and rational: David Roodman’s amazing two-part series on Worm Wars, for instance, is going to persuade exactly zero people to stop giving money to the United Way and start giving money to the Schistosomiasis Control Initiative instead.

To put it another way: You can’t drag money down from the top-left to the bottom-right. The heart says no.

Instead, the job facing The Life You Save is to focus on the big prize at the top right. The trick is to create social feedback loops which make people feel great, on a practical and emotional level, about doing things like buying anti-malarial bed nets.

That’s not an easy job, but I think there are two promising avenues worth exploring. The first is for The Life You Save to expand their list of charities to include areas beyond just international health and development. If they started rating religious charities, for instance, many of which are very good, then maybe they could help to optimize some of the hundreds of billions of dollars which flow into that space. Pushing a lot of dollars a little bit to the right is probably even more effective than pushing a few dollars a lot to the right.

Secondly, they should concentrate on the askers, rather than the givers. While hundreds of millions of Americans give to charity every year, the number of people who ask for donations is much smaller. And a relatively small number of askers drive a huge proportion of all donations.

The trick, then, is to focus on a relatively small number of individuals: the CEOs announcing matching-giving campaigns, the TV executives running telethons, the celebrities tweeting out links to donate, the people who decide which disaster-relief charities pop up on ATM screens when you try to take cash out of your bank account.

It’s commonplace to bemoan the fact that Americans often don’t do their homework before they give. But I don’t think that’s ever, realistically, going to change. What can change, I hope, is that Americans might be persuaded to do a bit of homework before they ask for donations, and go around pestering their friends and family to give to a certain cause.

So here’s a job for The Life You Save, and similar organizations: Find those askers, talk to them one-on-one, and don’t give them a very short list to choose from. Instead, give them some relatively simple tools which will allow them to optimize the charities they’re picking. For where those askers lead, millions of their friends and family will follow.

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