Are some places to give better than others?
Written by Juliet Mee
Having just graduated from college, Irina has gotten the job she wanted and moved to a new area. She thanks God for her unique life circumstances given by her career, and she is happily ready to fulfill the promise she made to God that she would do good with the money, starting with her first paycheck. Walking along the streets of her new city, as if on cue, a woman asks her for change. Reflexively, Irina reaches into her jacket pocket and gives her what she has left after paying the check at lunch.
Irina is used to dismissing the inherent conflict of emotions as she walks away, realizing only God knows if she helped a person in genuine need or enabled addiction or unwillingness to work. But with more money to give, a bigger question begins to emerge. Irina gave either to her church or friends in need in the past. Neither of those choices seems relevant now as she asks, “How can I make the biggest difference with my money?”
Back at home, Irina sits at her computer and begins determining what she wants to do with her financial gifts. The more she digs into the process, the more enlightening and confusing it becomes. Who knew that “charities” (def: organizations that help the needy) and “funding opportunities” (not-for-profits, think tanks, and research organizations) could do so many different and exciting things with her money? With so many options in front of her, Irina finds out that not only does she care about helping the world’s poor, there are places to give that she had never considered.
Her curiosity has created a predicament: she regrets allowing her giving to be guided by convenience and marketing and can no longer justify doing that. Irina now realizes there is a better way to make an impact with her donated money. She wants to give to the important causes, but she also wants to give to organizations with a track record of using donated money efficiently. Finally, she wants the ability to follow up, so she doesn’t end up with more “giving regret.
Being Christian involves searching out the right actions to find Jesus’ characteristics in what we do. Jesus speaks a lot about money, and his ideas of financial stewardship are illustrated noticeably in the parable of the talents (Matthew 25:14-30; Luke 19:11-27). Reading the parable, we are taught to steward what we are given so that our investments produce beneficial results. Proper Christian financial stewardship requires investigation to plan and manage our resources responsibly. We are called to understand the impact of our spending, making the issue of where to give money more complicated than it first looks.
“What it will take to move the needle in any given arena can be very different from what seems like common sense.”
There are thousands of worthy causes from which to choose. Although the desire to give is common, our moral beliefs may be inherently baked into the process as people of faith. It isn’t always easy for any person to determine which things matter most to them, and no two people are alike. Regardless of their beliefs, most people underestimate the uncertainty they face when attempting to steward their donations and make an informed decision about giving. Despite differing levels of knowledge, donors need a complete picture of the critical success factors that matter. What it will take to move the needle in any given arena can be very different from what seems like common sense. It’s a delicate balance for organizations to give people the correct picture without overcomplicating the issues.
Just like Irina’s gift to the woman in need, many parts of the intended recipient’s story are hidden from our view. If you know how to scratch the surface, there is a big difference between individual charities and the outcomes they provide. You can do great good with your donations, especially if you choose where you give through systematic evaluation of the things the charity puts into their programs, the results they get, and how well they have done over time. Some charities do 100x better than others in their same cause area, and sadly some even do harm. Cognitive bias by the giver and unintended consequences on the part of the organization can join together to make a gift worse than irrelevant. If this is surprising to you, it probably shouldn’t be. Comparison examples are everywhere; businesses that employ better strategies make more money than those that don’t, and some stock funds pay out over 100x more than the initial investment, while others lose it.
“Some charities do 100x better than others in their same cause area, and sadly some even do harm.”
Remember Irina’s “giving regret” mentioned in the story? No one likes to feel that their hard-earned money hasn’t been used wisely. Without good guidance, Irina will probably continue to rely solely on the tools she knows in an honest but potentially misguided attempt to make a difference.
So what is a person like Irina supposed to do to keep from impulsive decisions or inaction? Luckily, there has never been a better time than today to evaluate the difference you can make through your donations. We can use research to discover the best places to give. One of the most reliable, robust tools available are charity evaluation organizations such as Give Well, Animal Charity Evaluators, The Life You Can Save, Giving Green, and Founder’s Pledge. Information aggregation organizations such as this capture the collective wisdom of experts, gather data and publicize to donors, guide organizations about what is essential and let them know where each charity ranks concerning other organizations. They provide the necessary education to donors so that what they give becomes an excellent method of helping those most in need.
Centralized communication creates a situation where you can find all the appropriate documentation and information in one place. Even in cases that seem straightforward, it often pays to use charity evaluation organizations to check for potential biases. The benefits of centralized information are numerous and include increased transparency, up-to-date communication, and an ability to evaluate and re-evaluate your options by seeing the changes in the cause over time.
Effective Altruism for Christians (EACH) is a community that is excited to help individuals like Irina do the most good possible. Stewarding donations by using data-driven methods like charity evaluators is one of the best ways to ensure that we take effective action with our donations.