Optimising charity

How do any of us decide which charity to support?

Would it end up being Oxfam, or one of the other ones, like World Vision, the International Rescue Committee, Doctors Without Borders or UNICEF?

The charity evaluators like Charity Navigator and Givewell are not that helpful. The former focuses on the governance, how much is spent on fundraising, how transparent the charity is and things like that. GiveWell focuses on the impact of charities.

If one uses Charity Navigator, Oxfam Australia is not rated but Oxfam America gets 3 and out of 4 stars. If one uses GiveWell, Oxfam is not recommended as a charity. Giving What We Can, which previously evaluated charities, also did not recommend them. The Life You Can Save, based in Australia, a charity evaluator as well, does recommend them.

The Life You Can Save, recommends them, but does not recommend UNICEF. This is the case even though several of the reasons they give for recommending Oxfam, seem to apply to UNICEF.

If all this seems hard to follow, it is.

Take just two charities, World Vision and the International Rescue Committee. They both have programs to end poverty.

Is one better than the other?

On the surface, they both seem the same. They both have programs providing vocational assistance to people. They both work with refugees. They both respond to natural disasters. They both help children receive an education. They both provide health care. They both claim to be effective, in what they do.

World Vision noted on their website at one point, they spent 86% of money received, on programs. The IRC claimed on their website, they spend 87% on program expenses.

The IRC seems to make a stronger commitment to effectiveness. In fact, they have committed to, "be the first NGO to ensure that every program is either based on world-class appropriate evidence or is contributing to the creation of that evidence-base."

If that is true, it is a concern that NGOs have not already based all their programs on, world-class appropriate evidence.

The IRC wants cash to become more used in humanitarian assistance. Providing cash to people in need is fast and the people themselves best know what they need. There is, as the IRC tells us, evidence backing cash as king.

So, why not give to a charity that does only that. Gives cash to people in need but that charity is not the IRC

The charity that does this, GiveDirectly.

GiveDirectly itself, however, lists a reason not to give to them.

They have noted that 5% of people report tensions in their community, after receiving money. They also noted that 1% of people report violence or crime, after receiving the money. How many other programs like those of World Vision and the IRC, report acts of violence as a result of aid? Possibly none.

Are acts of violence and crime, even at the low level of 1% enough to put you off. Consider the counter argument, tensions reduce within the households. There is "suggestive evidence" that violence within households, reduces with cash transfers.

We may decide that international development agencies should be avoided. There are too many moving parts, and some interventions are better than others.

So, it would make sense to give to multiple charities. As you can't know for sure the best one to give to.

Giving What We Can, argued against giving to more than one charity.

In their blog, they argued that one is effectively wasting money by giving to a charity not highly recommended. Just give to one effective one.

One issue with following charity evaluator recommendations {or your friends}, they may be wrong.

The other issue is that evaluators do not always follow their own recommendations. The staff may have other causes they are passionate about and give to them. So, becoming too fanatical about evaluators has its pitfalls.

GiveWell has a fascinating, staff member's personal donations section online.

One of the staff members in 2018, stated they were going to give 80% of their giving bonus, to GiveWell recommended charities. They were going to also give 10% to animal charities, a neglected and important cause for them. GiveWell, however, does not currently recommend any animal charities.

There may be great charities out there, but not yet recommended by evaluators. Not yet even reviewed let alone recommended.

If you want to give to an Australian charity, evaluators are not helpful. The prominent evaluators don't recommend giving to developed country causes.

The only Australian charity that is recommended is the Fred Hollow's Foundation, but because of the work it does overseas {although it does work in Australia as well}. Yet, like with all recommendations there is a subjective nature to it. The Fred Hollow's Foundation is only recommended by the Life You Can Save, not the others mentioned.

One takeaway, to make sure we are supporting effective charities.