June 11

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Effective Altruism: How Small Donations Can Change Someone’s Life

Your donations might be unhelpful— here’s what you need to consider.

“One additional unit of income can do a hundred times as much the benefit the extreme poor as it can to benefit you or I.” — William MacAskill

In one of the groups I’m in, the CEO of a company recently started a discussion about donation efforts, and what to donate to.

Personally, I like the approach of Effective Altruism to decide which causes and organizations I want to give money to because it’s a data-driven approach that combines empathy with logic.

It helps me identify how a certain amount of money can do the most amount of good. As you might know, I love how small changes can create huge results—and Effective Altruism is a great example of that. 

Effective Altruism prioritizes causes that are:

  • Great in scale (it affects many lives, by a great amount),
  • Highly neglected (few other people are working on addressing the problem), and
  • Highly solvable or tractable (additional resources will do a great deal to address it).

When considering these criteria, it becomes clear that our donations typically won’t do the most good in rich countries or if given to super-popular causes. But they can make a ton of difference in other places in the world, or if given to under-funded causes.

For instance, a couple of years ago I started sponsoring a child in Vietnam where I had previously lived. Just 30 EUR a month allowed the child to continue going to school and getting an education. There’s no way 360 EUR could make the same difference in someone’s life within Germany (or the USA).

And sponsoring a child is not even the most effective way one could use 360 EUR. For that amount, you could (depending on the exchange rate) buy over 200 malaria nets (at 2 USD/piece).

On average, a single net keeps two people safe from Malaria for 3–4 years… and for every 100–1000 nets, one child does not die.

Picking the right cause and organization could literally make your donation 1000x more effective.

Don’t believe me?

Well, an essay by Dr. Toby Ord compares the years of healthy life you can save by donating 1,000 USD to five different interventions for the prevention or treatment of HIV and AIDS.

The best of these five strategies (educating high-risk groups) is estimated to be 1,400 times better than the worst of them.

So, I think effectiveness matters greatly when it comes to donations.

That’s why I donated a percentage of last year’s income to an area that effective altruism identified as a high-impact one while avoiding donations to less effective causes.

How much good could your monetary donations do if you gave them to the most effective causes?

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    • Oh wow, I’m so glad reading this article had such a positive impact on you. I’m so happy it inspired you to an effective cause. Yay! Thank you so much for your comment, Leo!

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