Charity Choices

A Resource for Donors

How to decide: Don’t assume that efficiency equals effectiveness

Several charity rating services do a good job of focusing on charities’ accountability and governance.  They put a spotlight on charities that fall short on these measures. 

But these services can’t tell you some of the most important things about charities you may want to support. A recent article by Tina Rosenberg, a Pulitzer-prize winning journalist formerly for the New York Times, expressed this well. 

“Calculating efficiency is important,” she writes, “but some charities do useful things the numbers can’t capture.  Overhead does matter. But it is dwarfed by a different question: Is this group’s work effective?”

There are many ways to think about effectiveness. The simplest is cost effectiveness.  Rosenberg cites the cause of helping the blind.  Most people would agree that a charity that trains guide dogs for the blind is a worthy cause.  But it costs $42,000 to train one guide dog.  In contrast, eye surgery for people with trachoma in Africa costs as little as $25 per person and is 80 percent effective.  The resources it takes to train one guide dog could restore the sight of 1,344 people. 

One website that tries to measure effectiveness is GiveWell.org.  But it has only been able to do this for a relative handful of charities, all of which focus on the “global poor.”  It has looked closely at just over 100 international charities and settled on just four as “top-rated charities” and four others as “other standout charities.” 

In discussing the charities that it didn’t select, GiveWell acknowledged that it focused on charities that delivered services (such as treating treat children for parasitic worm infections) because it’s easier to find “concrete” indicators of impact.  This leaves out charities that do things whose impact is hard or impossible to measure short term in concrete ways.  But long-term, these charities may have a much larger impact. 

Think for example about the Southern Christian Leadership Council – Rev. Martin Luther King’s charity.  According to his aide Andrew Young, King spent close to half his time trying to raise money for SCLU.  Short-term, SCLU didn’t change a lot of children’s lives.  Long-term, most would argue that it had a huge impact on children’s lives and on the entire country. 

Another way to think about effectiveness is how a charity approaches the problem it is set up to solve.  Hunger is a good example of this.  You can support a charity that feeds the hungry.  Or you can support a charity that advocates for policies that it thinks will reduce hunger for many people, such as Food Stamps.  The reality is that many good charities fighting hunger understand the need to do both: feed the hungry and advocate to end hunger. 

The key is deciding the type of charitable work you want to support and who you want to help – the hungry, abandoned animals, children in Africa or Haiti, people struggling with dreaded diseases, refugees in Europe.  Then the key is learning as much as you can about the charities that work on these causes. 

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