Let’s compare the way investors and philanthropists work. Investors can review a wide range of quantitative data to help decide if the prospects of an enterprise justify the valuation. Then as time goes by after a purchase they get a very clear view of whether it’s been successful by comparing the value with the cost.
Philanthropy can not offer such a comparison because the financial return on donations is always minus 100% and only rarely can donors view the outcomes of their donation in terms of social impact. So, people tend to rely on subjective measures, maybe anecdotal evidence of impact, or whether the staff seem well informed and motivated. In the search for tangible evidence many start looking at measures such as the amount spent on overheads, even though there is considerable evidence that this can be highly misleading.
Effective Altruists pursue a different route, focusing almost entirely on data linked to the outcomes achieved by a charity. Take two charities are both trying to save lives amongst a similar group of people suffering from the same risks. One charity saves a life for every £10,000 spent while the other needs £20,000, so it’s pretty evident which is more effective. And that might well be the charity with the bigger overheads because hiring good people is never cheap.
Effective Altruism only works when high quality data can be obtained. Such data ideally needs to measure the impact of the intervention in isolation, ideally involving the use of Random Control Trials. Such exercises are usually expensive and some lead to moral dilemmas. A commonly quoted example is the provision of mosquito nets. There is a body of evidence to suggest that the provision of nets greatly reduces the risk of catching malaria, thereby saving lives. Figures vary but a donation of around £4,000 to buy 800 nets is likely to save a life. That stacks up very well compared with most philanthropic interventions and that’s why highly credible organisations such as Give Well recommend charities providing that service.
Philosophically, Pete Singer suggests that saving the life of someone you’ll never meet, or even know existed, counts equally with saving a life closer to home. I’m not so sure. It seems to me that when there is a direct personal connection with the beneficiaries that leads to a greater sense of achievement for the donor and more willingness to make further donations. Linking brain and heart is admirable but they both need to play a role in decision making. Supporting a cause just because the evidence is strong but where you do not feel empathy will, I suggest, not be a satisfying experience.
On balance I am in favour of pushing for much better information on the impact achieved by charities but I recognise that is much harder for some. For example, research into healthcare remedies can take years, or even decades and the outcomes may also take years to be measurable. Advocacy aimed at changing government policies rarely operates in a vacuum with no other forces contributing to changes and the outcomes are often multi-dimensional and long term.