Charity thoughts
John Welford
I decided at the start of 2018 to donate a proportion of my income to charity. These are some notes on my decision and the reasoning behind it, updated after one year of donation.
Why have I written this?
There is sometimes virtue in silence, so feel free to ignore this – that’s fine. Equally I don’t expect anyone else to share details of their giving with me; I have no expectations and I’m not looking to hand out any judgements – do what you please with your own money. However, I have a few reasons for choosing to share this.
What I would like to do is contribute towards normalising charity donation. In America I know it is a much more public thing than it is in places like the UK and New Zealand. Perhaps this could be to do with the typical Brit not wanting to speak openly about things like this, which makes it seem like something unusual.
I also wanted to share my continued choice of charity and reasoning (see below). I’ve given it some thought and research, so hopefully it may be of interest to others.
My experience is that publicly reaffirming my donation plans in this way increases my resolve to stick with it. The research supports this to some extent,Peter M. Gollwitzer, Paschal Sheeran, Verena Michalski, and Andrea E. Seifert. When intentions go public – does social reality widen the intention- behavior gap?, 2009.
although findings are complicated.
I’d welcome feedback if you think my reasoning is faulty, or if you have anything to share that I might not have considered.
Why donate to charity?
My income puts me in the richest 0.1% of the worlds population; not because I earn an exceptional amount, but because the majority of the world earns so little.givingwhatwecan.org/get-involved/how-rich-am-i
I generally believe in trying to make the world a slightly better place. The small difference that my donation amount would make to me could make a massive difference to someone else.
What charity?
I donate monthly to the GiveDirectly Universal Basic Income (UBI) trial in developing countries.givedirectly.org/basic-income
There are no published results from this trial yet, but GiveDirectly does have a newsfeed of what recipients are spending their money on.live.givedirectly.org/newsfeed
Common purchases by recipients include: home improvements, cattle, seeds and fertilisers, emergency savings, starting businesses, and education.
Why this charity?
I believe in the principles of Effective Altruism, and I therefore try to be a savvy investor with my charity donations.wikipedia.org/wiki/Effective_altruism
The most straightforward measure of this is to try to save or improve the most lives per dollar donated.80000hours.org/2012/06/dead-children-currency-51
Making this assessment across the many hundreds of possible charity organisations and donation routes on my own would be a massive task, but thankfully the excellent organisation GiveWell have done almost all the hard work already on this.givewell.org/charities/give-directly
Anyone considering a charity donation would be well advised to check out their recommendations.
Alongside simple measures of good per dollar I also have a set of personal beliefs that impacted my donation decision. These, alongside the recommendations of GiveWell and a few other large charity evaluators, led me to my decision to donate to GiveDirectly’s UBI trial. Below are a few core points that supported my decision.
Universal Basic Income
The concept of having a Universal Basic Income (UBI) I think is fascinating and represents a solution to quite a range of problems that the world faces, both now and increasingly into the future.basicincome.org/news/2013/02/opinion-the-one-minute-case-for-a-basic-income
Unfortunately it is a large step to take and faces quite a lot of opposition. If my donation can help test out the concept of UBI, spread an understanding of how it works, and possibly bring it a step closer, then I see that as worthwhile investment.
Trials
I am a strong believer in the scientific method, and also in the benefits of randomised controlled trials as a method for determining the best course of action.Sally Cupitt. Randomised controlled trials – gold standard or fool’s gold? the role of experimental methods in voluntary sector impact assessment, 2015.
GiveDirectly’s UBI trial appears to have all the hallmarks of a well designed trial that will contribute to the scientific knowledge on UBI and the efficacy of direct giving in developing countries. This means that we will know – with a high level of confidence – whether my donations have been effective or not. And even if the answer is that they haven’t, at least we will have learnt something in the process.
Developing countries
The idea that charity begins at home might have been relevant in the past, but in the increasingly connected and globalised world that we now live in I don’t think it makes sense to think this way anymore – it feels small-minded and overly nationalistic. Whilst animal cruelty, homelessness, cancer, and so many other things in the developed world are clearly terrible and worthy of our attention, the problems faced in developing countries are at least as awful, but far far cheaper to fix.
Gender equality
Gender equality should be a goal for everyone, but finding ways to contribute beyond simply not-being-part-of-the-problem can be difficult. UBI’s are (by definition) universal across gender, but there is an expectation that they will have a disproportionately large impact on women. Generally the feminist position appears to be that, when coupled with other policy measures, UBI will be a useful step towards reducing gender inequality.Caitlin McLean. Beyond Care: Expanding the Feminist Debate on Universal Basic Income, 2015.
Population growth
On a related note, I worry about global population growth, and feel like stabilising this is one of the major steps forward that we can take as a species. The primary contributor to this growth comes from developing countries, where large families are effectively a combined retirement fund and insurance policy. One of the expected outcomes of tackling poverty in these countries is a reduction in the need for large families, thereby slowing population growth.Steven Sinding. Population, Poverty and Economic Development, In Philosophical Transactions of the Royal Society, 2009.
There is also evidence that the implementation of a UBI in developed countries will address poverty, which may produce a similar effect.Evelyn Forget. The Town with No Poverty: The Health Effects of a Canadian Guaranteed Annual Income Field Experiment, In Canadian Public Policy, volume 37, 2011.
Choice
One of the difficulties in donating to charity, and indeed one that stymied me previously (see below), is the decision over how best to spend the donation. And therefore one of the things that I like about giving directly is that I am able to pass that choice onto the people that will ultimately see the benefits from it.
Climate change
Global warming is another significant concern for me, but unfortunately there are not a lot of charitable options that seem likely to produce a magic fix for this.openphilanthropy.org/research/cause-reports/anthropogenic-climate-change
As residents of developed countries there is a lot that we can be doing personally to address this. But there is also quite a legacy of emissions that were produced as we ‘developed’. It seems unreasonable to deny developing countries the same opportunities that we have benefited from, however the faster they are able to do this the better for everyone. Charitable donation into the developing world seems like a decent way to promote this.
Spillover effects
GiveDirectly recently evaluated whether there were negative effects of their cash transfers on people living close to transfer recipients. There have been concerns raised through other studies that these ‘negative spillovers’ may impact the quality of life of non-recipients;blog.givewell.org/2018/05/04/new-research-on-cash-transfers/
however, early reporting on the outcomes of this study suggest that this is unlikely to be the case for GiveDirectly programs.givewell.org/international/technical/programs/cash-transfers/spillovers
Programme effectiveness
Although GiveWell rates GiveDirectly as one of the most effective charities, the UBI trial is ranked as less effective.givewell.org/charities/give-directly/supplementary-information#Basic_income_guarantee_cost-effectiveness
This is due to the funding for it being raised upfront and invested in a low-risk portfolio. They also speculate on the possibility that smaller transfers may reduce people’s ability or incentives to invest, and that transfer costs per dollar may be higher.
Conversely, there is the possibility that the programme may be significantly more cost-effective, by allowing longer term planning or by encouraging the adoption of UBIs. These types of policy impacts are difficult to quantify, but I believe make this a good choice for charity donations.
How
My ‘Giving What We Can’ pledge
Over the past year I started donating at a rate of $1,000 NZD per month through an international bank transfer. This worked out as the option with the least overheads, but unfortunately was not eligible for any tax credits as GiveDirectly is not a approved donee organisation in New Zealand.
Fortunately, in October Effective Altruism New Zealand were able to organise a ‘donor swap’ between myself and someone in the UK.effectivealtruism.nz
He wishes to donate to the Against Malaria Foundation (AMF – also an excellent and highly effective charity) which is an approved donee organisation in New Zealand.againstmalaria.com
I have therefore recently been donating $1,800 NZD per month to the AMF, a third of which I am able to reclaim at the end of the tax year. In return he donates the equivalent amount to the GiveDirectly UBI trial from the UK – roughly £960 GBP including gift-aid.
This is slightly more than 10% of my pre-tax income for the part-time four day week that I work, in accordance with the ‘Giving What We Can’ pledge that I have taken.givingwhatwecan.org/pledge
Why now?
Let’s face it, I have been earning more than enough to be donating something ever since I started my first job after university; but I had two reasons I didn’t.
Firstly, I never felt like I knew enough to make a good decision. I lived in a forward-thinking stable western democratic country, with a government full of officials and advisors whose jobs involve making sensible monetary choices for the good of the people. I paid taxes to them and trusted them to spend the right amount of it on the right causes. It seemed rather presumptuous for me to assume that I knew better than these experts about where my money should be going.
I now think I was both wrong and naive on this. Partly because I was neglecting to consider that charity can be international, whereas governments operate very much at a national level (see my giving choices above). And partly because I now realise how irrationally these kinds of decision are made when politics is involved. Recently I feel like I am in a better position to make decisions on charitable giving after putting a bit of thought into it.
My second reason for not donating previously was because, like many people, I was saddled with debt. I had credit cards, and student loans, and – most significantly – a mortgage. Which meant that any spare cash that I donated, rather than using it to pay down my debt, I would end up paying interest on. I figured that it would be more efficient to pay off my debt now, enabling me to then donate more in the future.
That would have been fine, but unfortunately I wasn’t counting on my typical western consumerism, and feeling the need to continually purchase things which put me in more debt. If I accept that I am likely to continue to spend my spare money on more stuff, then the most pragmatic option seems to be to donate now and reduce the amount of spare money that I have.
I recognise that there is also an opportunity cost with my old policy. So hopefully my chosen charity will be able to invest my donations sufficiently well as to offset the losses in interest payments.
Will my thoughts on this change in the future?
Quite possibly! I continue to reflect on this, but part of my reason for documenting my thought processes here is to invite criticism. It’s a large and complicated area in which I know very little, so please tell me if I’m wrong or you disagree, I would genuinely love to have that discussion with you.