Why we should expect good giving to be hard

We’ve written before about a couple of consistent worldview differences we encounter:

When discussing any specific charity, I can usually think of specific reasons that the charity’s mission is difficult, and specific ways that it might be failing. Here I’m going to try to give a more general argument for why it’s hard to accomplish a lot of good with your donation. I’m not presenting this as a rigorous, evidence-backed argument; I’m just further clarifying my worldview and where I’m coming from.

When you want to help people as a donor, you have to get in line behind all of the groups below:

  • For-profit companies. I believe that most of the things you can do that make strangers’ lives better are things you can get paid for. Every day people help each other send packages, prepare food, recover from illness, etc. via market transactions. This may seem like a trivial and obvious point, but it’s the reason we are so focused on helping the very poor. When you’re trying to help people who aren’t poor, you’re competing with for-profit enterprises.

    And even the very poor get a lot of help from for-profit services. For example, when people started realizing that cellphones could be useful to the very poor, the result was expansion of for-profit cellphone service into the developing world. There were some nonprofit attempts to contribute to this dynamic, but we’re skeptical that they added much value on top of the profit-driven ones.

    I am certainly not saying that all profit-making enterprises are helpful, nor that all forms of help are profitable. But a lot of the easiest help to provide – even for the poorest – is already being provided by people who are doing it to make money.

  • Governments. When a market failure is clear and severe, the government often steps in. Many feel it does not step in enough or that it does more harm than good, but the fact remains that much of the “lowest-hanging fruit” for helping people where markets won’t is covered by governments. Low-income people in the U.S. get free education with high teacher attendance rates, free emergency medical care, and cash among other things. People in the developing-world get far less from their governments, but most governments still provide a good deal of free medical care.
  • Local philanthropy and community. When it comes to market failures that the government has failed to address, there are still often local nonprofits – and just local people – who are well placed to step in quickly and effectively. This is not an endorsement of small community-based organizations as giving opportunities for individual donors outside the community. If you’re outside the community you’re trying to help, you’re going to have trouble figuring out what the real problems are and who ought to be funded to address them; the people in the community will often be better placed to help, by donating and otherwise, than you are.
  • Big foundations. There are opportunities to help that are missed by for-profits, governments, and locals. There are many extremely well-funded and well-staffed foundations looking for just these opportunities.
  • Other donors. If you want your donation to have an impact, you need to find opportunities that have been missed not only by all the groups above, but by other individual donors. Our focus on room for more funding is an attempt to deal with this situation.

In my view, the wealthier the community, the more effective the first three items above (for-profits, government and locals) will be in addressing their problems. Therefore, if you want to find opportunities to provide help that isn’t already being given, you probably need to look at the world’s poorest communities – but doing that probably means helping people who are very far away and very culturally different from yourself, and you have to find opportunities that haven’t already been found by the big foundations or other donors.

When a donor says, “I have $1000 that I’d like to use to help someone,” it may not sound like they’re asking for much. But on reflection, I think they’re really saying, “I’m looking for someone who needs help that they can’t get from a company, their government, their community, or any other donor big or small – and I expect to provide this help just by sending a $1000 check, despite having very little experience or knowledge of the situation.”

Put this way, the donor’s request sounds somewhat exorbitant, and it seems that we shouldn’t expect them to be able to accomplish much with their $1000. Yet as it turns out, I believe that (if they take the rare opportunities that we highlight at GiveWell) they can often use that money to save a life. I think this is a somewhat shocking observation and that it reflects serious problems with the nonprofit ecosystem.

I also think we shouldn’t expect this to be the situation indefinitely. I hope that as the world gets better at providing help to those who need it, all the opportunities to save a life for $1000 will be snapped up more quickly. That will leave GiveWell customers – individual donors looking to help people they’ve never met and know little about – with much less exciting options, and that’s how it should be.

Comments

Why we should expect good giving to be hard — 6 Comments

  1. Excellent article! It makes a good stand-alone piece conveying your attitude toward effective giving.

    It’s an interesting question whether local philanthropy (say, in America) beats out developing world aid in some circumstances. The direct impact of local philanthropy should be much smaller in America but the effect could bootstrap to a large effect on account of impact on economic growth.

  2. I don’t think the possibilities to be a donor with impact are going fast because the world is getting better. The problem is knowing where more of the possibilities are.

  3. I think a critical aspect of giving you neglect is how hard it is to measure social returns and how rare such attempts to measure them are. In capital markets, the unit of maximization is well defined and universal. In charity markets, no such measuring stick exists across all opportunities. Even if there were one, there is no real incentive to maximize it.

  4. Shalom! I represent the Israeli NPO Reiki for Peace. Though we have been working (no salaries!) and progressing for more than seven years, we have not yet found a donor who is willing to fund us. We believe that that is because many people know nothing about Reiki, and because our work is a little hard to describe to those who have not experienced it. Thus, most people are not aware of the potential power of our work.

    We have projects planned that would require $1,000 to implement; we also have one that would require $500,000 to implement. Funding us would be easy (see our website, Support Us): you would not be standing in line behind anyone. Your $1,000 might not save a life, directly, but it will help to train lots of people who might be saving lives, and will certainly be saving the health and emotional stability of many people in an unstable political and social situation (Israel and the Occupied Palestinian Territories).

    In our case, giving will not be hard.

    looking forward!
    Rahel

  5. Thank you for this – I spend a lot of time trying to promote the idea of examining how we give among donors here in Canada, and I find the attitude that ‘doing good is easy’ to be a pandemic. The assumption that making an effort (any effort) to do good is tantamount to actually accomplishing it is everywhere.

    Nice, well intentioned people (many of them very savvy in many areas) honestly believe that any charitable effort they make should be heralded and praised as a wonderful thing, no matter how misguided. They also recoil from the idea that they should do much homework before making a decision to contribute – how dare I suggest that they are not doing a good job, that they should put scarce resources into research and evaluation?

    Anyway, I appreciate your argument because it validates that I am not toiling in vain, that I do have a point, and that I should keep it up. Thanks!

  6. An intense example of Nadine’s point is discussed in Philip Gourevitch’s Alm’s Dealers which asks whether humanitarian intervention in African conflicts could possibly make them worse, and if moral conscience should guide us to consider not intervening in the lives of people in poor and war torn places.