by Steph Guerra
figures by Abby Burrus

December kicks off the Season of Giving. There are Salvation Army volunteers ringing bells outside of department stores, food drives for the hungry, and fundraising appeals from almost every charitable organization. With so many groups to choose from, is there actually a strategic way to choose the “right” or the “best” charity?

Indeed, a social movement known as Effective Altruism aims to help people make more informed decisions about where to donate their money by scientifically evaluating the effectiveness and impact of charities. Founded in the late 2000s, Effective Altruism aims to maximize the amount of good that charitable donations accomplish by using evidence to identify causes worthy of donations. Important steps in this process include: (1) finding a cause with the potential to make the most impact; (2) identifying the most effective solution; and (3) quantifying the desired impact.

Identifying a Cause

Identifying the right cause can be more important than selecting the right charity. Charitable causes can range from global health issues (such as vaccine deployment or end-of-life care) to economic development (such as supporting entrepreneurs in developing nations) to societal concerns (such as criminal justice reform). Some of the key features used by effective altruists to select worthy causes include the scale of a problem, how neglected it is, and how likely it is to be solved (see Figure 1):

Figure 1: Important features of an effective cause. Identifying the “best” cause is an important first step in charitable giving. Some of the key features used by effective altruists to select worthy causes include the scale of a problem, how neglected it is, and how likely it is to be solved. The problem scale refers to the number of people affected and how their lives are impacted, the neglected-ness refers to how many resources are already devoted to the cause, and the solvability refers to the feasibility of evidence-based solutions.

1. Scale of the Problem

The scale of a problem refers to both the number of individuals affected by it and how deeply they are impacted by the problem. For example, if you are choosing between charities aimed towards curing blindness vs. HIV, you must consider two things: the prevalence of the two conditions and the potential quality of life improvement if either condition were resolved. According to the World Health Organization (WHO), approximately 36 million individuals are blind and 36.7 million individuals are living with HIV. Just considering the numbers alone, donating to either of these organizations appears equally cause-worthy. However, through extensive studies and surveys of afflicted individuals, the WHO determined that people living with untreated HIV exhibit a disease burden that is approximately 1.5 times higher than those living with blindness. Thus, if you want your money to make the most impact based purely on the problem’s scale, it makes sense to donate to charities that attempt to alleviate HIV/AIDS over blindness.

2. Neglected-ness

Neglected-ness is a measure of how many resources are currently devoted to a particular cause. Ideally, you want to identify a cause that is not already crowded by other philanthropists or foundations because focusing on a neglected, but still large-scale, problem means your donation will be more impactful. Donating a million dollars to a cause that only receives approximately $200,000 annually will have a bigger influence than donating to a cause that regularly receives $100 million annually. As an example of this principle, an effective altruist would consider disaster relief funding as an unwise investment because this cause already receives a large influx of donations. They would instead focus on a cause that receives little attention such as the field of artificial intelligence, which is viewed by many as a catastrophic threat to humanity, yet there are few resources and organizations devoted to its control.

3. Solvability

And lastly, when identifying the best cause, its solvability must be considered. This is perhaps one of the most important criteria because even if a cause is large-scale and neglected, it may not be worth donating to if there aren’t any clear or immediate solutions. The best causes are those that can be solved with an evidence-based intervention. A classic example of solvability is the prevention of malaria transmission in sub-Saharan Africa through the distribution of long-lasting insecticide treated bed nets (LLINs). Through a series of small- and large-scale randomized control trials, researchers established that the distribution and usage of these bed nets significantly decreased childhood mortality and other health outcomes related to malaria contraction. Distributing bed nets to prevent malaria transmission via the Against Malaria Foundation is an intervention that is large-scale, neglected (room for more funding), and solvable.

Identifying the Most Cost Effective Solution

After identifying the “right” cause, the next step for an effective altruist is to determine the most effective solution. The gold standard for deciding on the most effective solution is to conduct a randomized control trial (RCT). If the cause you are most interested in is improving educational achievement in the developing world, there are several charities that apply different solutions that you can consider for your donations. You could donate to an organization that builds new schools in remote and rural areas, to a group that trains local English teachers or to a group that sends school supplies to developing countries. To determine the most effective target for your charitable investment, you could conduct an RCT to investigate each intervention at different groups of schools. Each school group will either receive one intervention or no intervention at all. You can then track test scores and school attendance to see which group fares best over the course of the experiment (Figure 2).

Figure 2: Randomized Control Trials (RCTs) provide best evidence for effective giving. To identify which solutions work best to improve educational achievement, one can create different groups of schools, giving each group a different additional resource or no additional resource at all. One can then track the educational achievement such as test scores or attendance at the start of the experiment and over the course of experiment. You then compare the values at the end to the start to determine how well each resource worked. It is important to compare each experimental group to the control (no resource) group as well to ensure that any changes are significantly different than what was observed without any investment.

Michael Kremer conducted a similar RCT experiment in the mid 1990s to evaluate the work of a Dutch charity called International Christian Support (ICS). Kremer wanted to improve educational achievement in Kenya and decided to evaluate local schools implementing key ICS interventions over time. His study showed that none of the interventions including more school supplies, newly trained teachers, or free school uniforms led to improved test scores or school attendance.

Undaunted, Kremer decided to test other strategies for improving education in Kenya. One novel strategy involved deworming children. Intestinal worms are parasitic infections that affect more than one billion people worldwide. While these infections often don’t kill, they do make children sick in countries like Kenya. In a new study, Kremer determined that treating intestinal worms led to improved educational outcomes, including decreased school absenteeism by 25 percent! This story illustrates the value of choosing interventions that have been adequately tested. If he had not tested different ways of increasing school performance, Kremer may have funded an organization that did little to improve his cause of interest (story adapted from McCaskill, 2015). Obviously, not everyone has the resources to conduct their own RCTs but, luckily, there are many charity evaluators (such as Give Well) that consistently review academic studies and write up digestible reports for busy people to review.

Quantifying Impact

The final principle that powers the science behind effective altruism is calculating the actual impact each donated dollar provides. But how does one quantify impact? One key strategy is to calculate the number of life years saved by the solution. One quality adjusted life year (QALY) is considered one year of life lived in perfect health and is counted as 1 QALY. A year of life lived at less than perfect health will range anywhere from zero to 1 QALY and can be a result of chronic conditions such as lower back pain, blindness, or cancers. Large organizations, like the WHO, conduct surveys and research on populations living with various health outcomes to quantify QALY values across a spectrum of diseases. For example, one year of life lived with advanced cancer is equivalent to approximately half a year lived in perfect health.

Consider an intervention that saves the life of an infant from premature death. This infant has an average life expectancy of 80 years so by saving this infant’s life, the population has effectively gained eighty quality adjusted life years (QALYs). If your intervention strategy can save 100 infants lives for every $800,000 spent, that means that the cost of one QALY is only $100/QALY [$800,000/ (100 infants x 80 QALYs/infant)]. But as stated above, most people do not live in perfect health for their entire life. QALYs can account for more than just number of whole life-years gained, but also the improvement in the quality of life lived in those years.

Think about the average life and its quality over time (Figure 3). Let’s say we start at 100% quality of life at birth and that a typical infant and young child live at this same high quality. At certain points in life, a person may experience a severe dip in life-quality because of a major life trauma or illness. In addition, the average quality of life will slowly decrease over time due to aging and other chronic illnesses. Someone who is living at an average 80% quality of life could receive an altruistic intervention that extends her life by 20 years (see Figure 3). With this intervention, there is a net gain of 16 QALYs/person (20 years * .80). Now consider someone who will live for 60 years but with extreme chronic pain that lowers his average quality of life to 60%. If that person’s quality of life is improved by 30% over the course of a 60-year lifetime, then there is a net gain of 18 QALYs/person for that intervention (60 years * .30). QALYs allow researchers in public health and the effective altruism movement to estimate impacts of different solutions and ultimately survey their cost effectiveness.

Figure 3: Measuring charitable impact with QALYs. Quality-adjusted life-years represent the amount of life lived in each year and is adjusted for chronic illness and severe impairment. For example, a typical life may start at perfect health represented as 100% quality. Over time, the quality of life decreases due to acute trauma or chronic illnesses including cancers and aging. When considering the impact that a global health intervention is poised to make, professionals will often use QALYs gained as a means of estimating impact. Consider the graphs in Figure 3, which showcase two different types of public health solutions. One that will extend the life of an individual and one that will improve the overall quality of life of another. Both can lead to an increase of QALYs over the course of an individual’s lifetime. When the amount of QALYs added is estimated at the population level and costs are incorporated, effective altruists can use these values to estimate charitable impact and cost effectiveness.

Conclusion

The Effective Altruism movement aims to get the most bank for each buck donated to maximize impact. With this mindset, it becomes clear that certain causes should be prioritized over others. While this perspective might not fit well with the traditional spirit of giving, it has been gaining traction in recent years. Perhaps if we all thought more strategically about where we donated our money, the season of giving would be impactful well past December.

Steph Guerra is a PhD candidate in Karen Cichowski’s lab studying lung cancer therapeutics. She has given multiple talks for SITN and is a former co-director of the organization. Steph has also recently taken on the role of development director of the Philanthropy Advisory Fellowship organized by Effective Altruism at Harvard.

For more information:

Two related nonprofits, GiveWell and the Open Philanthropy Project, were established in the mid-2000s with the goal of conducting high-quality research on the effectiveness of individual charities and cause areas. If you are interested in giving to the most impactful causes, these websites have recommendations for their top-rated charities and more information on how they conduct their evaluations. Some of their top charities are those that have been mentioned throughout the article but include the Against Malaria Foundation, Give Directly, and Deworm the World Initiative.

‘Doing Good Better’ By William McCaskill

TEDTalk on Effective Altruism

How to be most altruistic in your career: 80,000 hours

One thought on “What Gives?: The science behind effective charitable giving

Leave a Reply

Your email address will not be published. Required fields are marked *