An Introduction to the Power of Effective Giving

When it comes to charitable giving, many people fall into one of two camps.

One camp believes all charity is good – they don’t think carefully about where they give because after all…it’s charity! It must be doing something good, right?

The other camp believes all charity is limited, or at the very least confusing. Maybe they think donating could do a bit of good, but that it's sort of a black box. Unless you can see it with your own eyes — they may think — it's impossible to truly tell if you're having an impact!

Neither of these views is right. But neither is completely wrong, either. As with many things in life, reality is a little bit more complex than either of these extremes.

The truth is: some charities do enormous good — and others, unfortunately, do far less. Just like with products and services, there’s a wide variation in quality and impact.

But the bottom line is this: donating can be one of the most powerful tools you have to improve lives. In some cases, it can even mean the difference between life and death.

And crucially — you don’t need to be a billionaire or expert to use this power well. Just a little knowledge and thoughtful giving can go a very long way.

The graph above shows differences in cost-effectiveness estimates of interventions a charity might engage in; it should not be equated with a direct comparison of charity cost-effectiveness since the costs of delivering these interventions may vary depending on context. You can find some more recent data sets showing similar patterns here, along with a recent — if very technical — explanation of this topic here.

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What does powerful giving look like in practice?

If you pulled someone out of a burning building, you'd probably feel pretty good about yourself. You potentially just saved a life — that's incredible.

Most people don’t think about it this way, but your charitable donations can do something similarly life-changing. It may not feel as immediate or visible, but the impact is just as real — and the data backs it up.

For example, just $15 can provide ten children with clean water for a year.¹ That's less than the average cost of a meal out, but it can change the course of ten lives.

There are two main approaches to unlock this kind of impact. The one(s) you choose depends on your values and worldview — many effective givers use a mix of both.

Approach #1: Use data and evidence to find the charities that do the most.

As stated above, just $15 can provide ten children with clean water for a year.¹ And $5 provides a malaria net to protect a child from a devastating disease that still kills 600,000 people per year.

But how can we be sure we donate to a charity that will use our money to do something like this? What if the programs we hear about don't actually work the way they are advertised? After all, there's no shortage of ads popping up with claims like "$1 saves a life! Donate now!" Is this real, or is it marketing hype?

Luckily, there's a sizable body of research that studies just this. This research answers the question: which charities will use your money most effectively? What, concretely, does your donation buy? And how much does it truly cost to save a life?

One of the organisations conducting this research is GiveWell — and their analysis is basically the opposite of marketing hype. Instead, it's a whole lot of unsexy, footnote ridden spreadsheets that take into account a whole range of factors, such as the fact that not every life-saving intervention delivered by a charity will get used, or the fact that even if it is used, the person may not have died without it.

When all the numbers are in, the result is striking. Choosing the charities GiveWell identifies as having an extremely good impact-to-cost ratio, we can concretely save someone’s life for around $5,000 — even after accounting for all those caveats. That’s less than many people spend on an overseas vacation.

To put that in perspective, governments of high-income countries are typically willing to spend around $10 million dollars to save a life.

Furthermore, we can prevent a lot of illness & suffering for far, far less than $5000. In other words, $5 is still enough to provide a malaria net to someone who needs one, and $15 can still provide a year’s supply of clean water to ten children.

Importantly, GiveWell doesn’t just look for cheap interventions — they look for evidence of effectiveness. See, some charities operate more on instinct, or theory. GiveWell only selects programs that are backed by a lot of data – RCTs, meta-analyses, you name it. So if you’re the type of person that wants to be confident whatever you are donating to actually works, and works incredibly well, there's research out there for you.

And you don’t have to sift through all of GiveWell’s spreadsheets. They publish an accessible list of the charities they believe can “save or improve lives the most per dollar” right on their website.

Approach #2: Use reasoning and expected value to find the charities you think give you the best chance at outsized impact.

Some people question the idea of only supporting charities with rigorous evidence, arguing that this approach might actually limit our potential impact. For example, some problems don’t lend themselves as well to measurement but could still be incredibly important (and impactful) to work on.

In fact, some of philanthropy’s largest successes had no existing evidence base when they began. Take the Rockefeller Foundation’s investment in agricultural productivity research, which arguably helped prevent the starvation of over 1 billion people.

Or consider risks that are high-stakes but hard to measure: a future pandemic that’s deadlier than COVID-19, the breakout of nuclear war, or the dangers posed by misaligned artificial intelligence.

We can’t really measure efforts to prevent these risks, because we don’t yet know what will be successful. But because the stakes are so high — and some of these threats are estimated to be more likely than most people would think — the potential impact of working on them seems enormous.

This leads some donors to take a “hits-based” approach rather than a strictly “data-driven” one. Hits-based giving involves using reasoning and analysis to identify areas with a high expected impact — even if the probability of success is uncertain.

The idea is: if enough promising solutions are funded, a few will be incredible successes — and those “hits” can more than make up for the failures. (Here’s a more detailed explanation from the career advising group 80,000 Hours.)

So if you’re a high-risk, high-reward type of person – and care more about helping to maximise expected impact than measurable impact — hits-based giving might be for you.

Why did we write this article?

Giving What We Can exists to help donors maximise their charitable impact, according to their worldview and values. Our research team leverages the research of impact-focused evaluators we’ve vetted and found to be consistent with principles outlined in #1 and/or #2 above. (See more about how we vet evaluators.)

To that end, we recommend charities in three high-impact cause areas, and we only recommend charities that an evaluator we’ve vetted believes to be an exceptional choice, based either on a more data-driven approach, a more hits-based approach, or some combination.

We empower anyone who wants to donate to charity to approach charitable giving with the same thought and care that you would other purchasing or investment decisions. Using research and reasoning to give impactfully can be the difference between funding a charity that does little good (or even harm) and one that is making an exceptional difference in the lives of others.

Once you’re confident that you are giving to exceptional organisations — that your money is really doing something – it becomes much easier, and much more intuitive, to do what you can to help solve some of the world’s problems and to help those who have less.

See, we think one of the reasons people don’t give as much as they could is that they’re worried – rightly so in some cases! – that it won’t really matter.

Yet this can lead to a tacit acceptance of the immense amount of (preventable!) suffering in the world and the incredible extent of global income inequality.

By helping people choose charities where their donation really does something, we support them in living up to their values – helping them to know the power they hold and to act on it.

Earning an average income in a high-income country puts you on the global rich list, in at least the top 5% and often the top 1 or 2% of the world (and that’s adjusted for the cost of living in your country).

This, combined with the approaches to effective giving discussed above, means we don’t need to accept the suffering on the other side of the world — we can do something about it.