When it comes to giving away your hard earned cash – there are many things that might hold you back. But the most common one is the doubt that your financial contributions will actually matter and make any difference at all.
Whether it’s because the amount of money you can donate doesn’t feel significant enough, that the problem is too vast, or you’re not sure how the charity will actually use it, there are many valid concerns when it comes to donating your money.
Sadly, in too many cases, donations to charities can be fairly ineffective. Which makes it vital to remember that not all charities are created equal. Some direct a substantial portion of their funds toward administrative costs or fundraising, leaving little to go to the actual cause. While this isn’t necessarily a bad thing – if it allows them to do more good overall – it can indicate wastage and inefficiency.
In contrast, there are “highly effective charities” that have proven their ability to efficiently utilise donations, ensuring that the majority of funds directly benefit impactful programs and interventions. In this case, even a small donation, from just one person, can go a long way and make a tangible difference.
Just as we look for value for money when spending on personal items, we should hold charities to similar standards. We want to do the most good we can with each dollar we donate.
So, instead of thinking there is nothing we can do as individuals, we should take a different approach and ask: “How can I make the most impact with my monetary donations?”
The concept of Effective Giving can revolutionise how you feel about giving to charity – and empower you to do an incredible amount of good.
Understanding Effective Giving
Effective Giving is a system that gives you the knowledge to make informed decisions about where your donations will go, ensuring that you maximise the impact of every dollar you give away.
As freelancers, we have to work hard for our money, so we understandably want to know that money that we give away will be valued and used appropriately.
By evaluating charities and organisations, we can filter the highly effective ones out from the rest. To fully understand the ideas behind Effective Giving, let’s go through the key principles.
The Key Principles of Effective Giving
An Evidence-based approach
Effective Giving relies on evidence and data, favouring support for organisations and programs with proven success, rather than those which appeal to the emotions or are currently in the public spotlight.
This approach ensures that resources are going to organisations with a track record of success and that the most value per dollar is being achieved.
Cost-Effectiveness
To maximise the impact of your donations, it’s crucial to consider how efficiently an organisation uses its funds to achieve its goals.
Charities that are considered cost-effective achieve their aims and make a positive impact, for as little money as possible. A great example is the Malaria Consortium. This charity distributes medicine to prevent malaria at a cost of only $7 to protect one child in sub-Saharan Africa, where malaria is a leading cause of child mortality.
Supporting an evaluated charity like this can have a massive impact, and your money can genuinely save real lives.
Real-World Impact
Effective Giving focuses on creating tangible, real-world change. This means supporting initiatives that bring concrete improvements to individuals’ lives, communities, and social systems, rather than merely addressing symptoms or providing temporary relief.
Room for more funding
Effective Giving considers whether an organisation needs additional funding and what they would do if they received double the donations. This approach ensures that resources are directed to where they are most needed.
Continuous learning and improvement
Effective Giving involves continuous learning, adaptation, and a willingness to adjust strategies based on new insights and evidence.
This ensures that your resources are always going toward the most up-to-date and relevant programs and initiatives.
Transparency and accountability
Charities prioritising Effective Giving are transparent about their operations, finances, and impact.
They share information openly with donors, allowing them to make informed decisions and hold organisations accountable for their promises.
Charities and non profits that are true to these principles would rather not accept donations if they are unable to use them in an effective way.
How to distinguish effective charities from others?
When you know the principles of Effective Giving, then you know what to look for in charities before you commit to donate to them. By looking at, for example, the transparency page on a charity’s website (and if they even have one), or their yearly reports – you can make a more impactful decision on whether you are going to donate to that charity or some other.
Full evaluation requires extensive research and resources, it’s impossible for us to do it all on our own. Fortunately, there are organisations that do the evaluating for us, making donating effectively easier than ever.
These charity evaluators rigorously assess charities, applying the principles we’ve discussed along with their own criteria, to identify the most effective ones.
Here are some sites doing amazing work to evaluate the best opportunities to get the maximum bang for your buck when it comes to donations:
- GiveWell
- Giving What We Can
- The Life You Can Save
- Animal Charity Evaluators
- Charity Navigator (focused on US-based charities)
Donating to other non-evaluated charities
For many people, a decision to support a charity or a cause is emotionally driven, and there’s nothing necessarily wrong with that.
It’s very likely that your local charity or organisation that works on a cause that is close to your heart won’t be the most effective charity.
But that doesn’t necessarily mean you shouldn’t support it. You can still apply some of the principles from above for a brief assessment and choose the charity that is mostly aligned with them.
We advise you to pay a special attention to transparency of the charity as well as cost-effectiveness of their projects and programs.
Equally someone like Sam Harris often talks about making donations to the very most effective charities – but then making additional donations to less effective causes that he has an emotional connection to. These almost feel like a guilty pleasure to him.
When you start to think in this way, you can do an immense amount of good – and feel good about what you’re doing too. You’ll know that you’re doing your bit to make the world a better place.
Other resources
Effective Giving is a big topic and there will be many questions that we haven’t answered here. Keep an eye on the site for more information and resources coming soon.
In the meantime, here are some recommended resources that can give you more insights into the concept of Effective Giving:
