In Germany, how can I maximize the impact of my charitable donations?

Question

I have recently reached a point in my life where I want to start making regular donations to worthwhile charities, but I have no idea which charity is most "deserving" of my money.

I understand that this is very subjective and what seems very worthwhile to one may seems rather pointless to another. Therefore, I will likely have to make a judgement call at some point in the process.

So, for the sake of this question, let's assume my ultimate goal is to maximize the number of human lives saved. But I would like for answers to focus on the process to find the right charity to fulfill that goal, rather than to simply suggest one. That way the process can hopefully be transferred to find charities best suited to other goals.

How do I find the charity that will save the most human lives per dollar donated?

Answer 1

You're clearly aware of the subjective nature of your question, so I won't hit too hard on that point, but I think it would be worthwhile to spend a bit of time focusing on the type of impact you'd like to have.

You clearly want to make an impact, so it would be helpful to think about issues that matter to you. Comparing causes is like comparing apples to oranges. It's hard to definitively determine whether issues related to the environment, poverty, or disease are more important. You can, however, decide which type of issue align best with the impact you want to have.

From there, you can start your search for the best charity in that field.

I like checking Charity Navigator and Charity Watch to learn more about the impact of every dollar contributed.

GiveWell takes things a step further by providing further research on the true impact of the charitable activities. A charity may be well-run and financially efficient, but the work may not be as impactful as you would expect. This is where GiveWell's research comes in. For example, I remember they did a case study on a charity that replaced wells in Africa with childrens playground toys (designed to have the children pump the water while playing). While on paper this may have seemed like a good idea, it turned out the children got bored of the pumps and the women from the village had to work twice as hard to get water.

You can also look at GiveWell's approved charity list to generate ideas.

Answer 2

Which charitable cause is the most worthwhile one?

That's a very broad and difficult question, both ethically and practically. I do not fathom to estimate whether a dollar spent on vaccinations in country A is worth more or less than a dollar spent on education in country B, clean drinking water in country C, helping the homeless in country D, protecting a persecuted minority in country E, researching a deadly disease in country F or so, so many other causes.

There is just too much to consider:

• How much direct or indirect suffering does a problem cause?
• How much money is needed to fix the problem?
• What is the risk that the effort will be pointless or even counter-productive?
• What negative side-effects could happen from the cause?
• Is the solution proposed by a given cause a long-term solution which will sustain itself or a short-term solution which will require donations in the future?
• Looking at global trends for the future, will the problem likely become better or worse if left to itself?
• If you do not donate to the cause, how likely is it that other entities will take care of the problem?

Estimating all these points requires expert knowledge specific to the issue at hand. And even experts usually disagree widely on such estimates. I would dare to say that it is not humanly possible to objectively rate all charitable causes worldwide by worthwhileness.

But one objective criteria you can use to pick a charity is to check which charity organizations actually spend money on their causes and which use their income mostly to pay for themselves. Charity organizations usually have to publish financial statements. See how much money they spend on fundraising and administrative costs and how much actually goes to their program(s). The percentages vary a lot.

But if one charity spends more on administration than another then that does not necessarily mean it's a less effective charity. A staff of well-paid full time professionals might be better at judging how to spend money most efficiently than a bunch of hobbyist volunteers.

Another good advise for effective altruism can be: "Think global, act local". Instead of looking for a globally operating mega-charity like the Red Cross or UNICEF, see which local organizations do good work in your community. That way you can observe the direct and indirect effects of your donations yourself. This allows you can make a more educated decision about whether or not an organization is worthy to keep receiving your support.

Answer 3

You ask:

How do I find the charity that will save the most human lives per dollar donated?

You do it by first being clear about your goals and the means you want to use to achieve those goals, and then connecting with people whose business it is to interact with such charities.

In more detail:

1. Define carefully what "save" means: prolong healthy life, delay death in terminal patients, delay the onset of symptoms in carriers, spread the gospel, etc. Be as specific as you can.

2. Work out which part in the 'value-chain', so to speak, you want to focus on. For example, suppose you want to prolong healthy life. You could look at the promotion of healthy living, food supplements, wholesome family life, pollution-reduction, etc. One of the simplest dichotomies is prevention vs cure, or from a different perspective, whether it is more satisfying for you to solve or to help. The answer isn't always easy to pick. For example, if someone is injured at a poorly-designed intersection, you can either help the injured person or help redesign the intersection. You might even want to do both. But if you are forced to pick one because your time/money/etc is limited, which would you pick? That's the basic dichotomy.

3. Work with large philanthropy organisations to help identify and shortlist the candidates meeting your criteria, as well as to help refine the criteria themselves. These organisations may be public trustee companies that make a business out of investing other people's money (gifts) in perpetuity to earn enough income to keep on supporting the kinds of charities the gifts were intended for. You might run into the problem that the only charities they can support are those that are tax-exempt. However, they may be able to help identify potential beneficiaries even if they can't help with administering the gifts.

4. Determine the best structure to use as a vehicle for giving. This could be simply giving out of your own pocket, setting up an entity (company, trust, etc), or participating in an existing entity such as a public trust/foundation. It isn't 'one size fits all'; there are many things to consider, such as the size of the initial gift, whether and how often you'll be adding to the gift principal, whether you're gifting the principal outright or investing the principal to gift the income it generates, etc.

5. Do it.

Answer 4

You should try to find an organisation you can trust. Find information how expensive they are (which percentage of a donation is really given to the target), how they assure that donations get to the right target and don't get "lost" on the way, how they select their targets, etc.
Of course you can refer to benchmarks/comparisons like https://www.test.de/Spenden-So-verteilen-Spendenbuendnisse-eingesammeltes-Geld-5398698-5398714/ or https://www.dzi.de/spenderberatung/ but this only makes sense if you can trust that source.

Answer 5

Maybe what you need is not only to get numbers about how many people your money helps but being somehow involved in making a HUGE difference in someone's life.

I'll share my personal experience with you.

I live in Argentina. I´ve been a donor many years to Greenpeace and other multinational organizations. I made my monthly fee and live my life without any further compromise.

Until I meet the help foundation Yeah! and his aid project "Chaco Existe": http://www.chacoexiste.org/

I became not only a donor but a symbolic godmother of two young boys. Twice a year, I prepare boxes with clothes, toys, books, sweets and groceries for them and their families.

The foundation makes the arrangement to deliver my boxes to them. I get pictures and periodic information about their heald and school attendance. There are hundreds of godfathers and godmothers. So there are hundreds of child who now knows that not only they exist, but someone cares.

The whole community is growing because this aid program is not just about sending food. It's also about helping the community to work on its own welfare.

I'm not saving a hundred from starving, I'm just saving two. They have names, they smile shily on the pictures. I can feel that my humble collaboration makes a difference for them. And that's all it matters.

Answer 6

Phillipp provided a detailed answer. I agree with his take on this. I believe that it is not possible to determine what charity that will save the most human lives per dollar donated because the charitable effectiveness vis a vis mortality or quality of life is totally subjective. But you can evaluate the efficiency of the charity.

I use Guidestar and Charity Navigator to look at the financials of the charities that I donate to. In short summary, Guidestar ranks 1.6 million nonprofits registered in the U.S. based on:

• IRS Tax Status
• Revenue
• Length of Operations
• Location
• Public Support
• Fundraising Expenses
• Administrative Expenses

You can read in greater detail at:

Guidestar

Charity Navigator

EDIT: Oops. After posting this I noticed your tag of Germany. Look for similar organizations there that rank charities.

Answer 7

Get a Donor Advised Fund

The first thing you need is a Donor Advised Fund. This will allow you to do several things:

• Allow you to make complex donations, even to charities that can't accept them because they don't have the workload or skill to process the gift. For instance, in the US there is tax advantage to donating appreciated assets rather than selling them and donating the proceeds. Sorting out gifts like this is what the DAF does. We were once donated an apartment building; I really wish that person had donated it to his DAF with instructions.
• Decouple the timing of your charitable deduction from tax timing. Tat way you are not rushed to donate to charity when your research is not yet complete.
• Donate pseudonymously, where that is appropriate.
• Protect you from getting swindled by charities that are not genuine, because DAF staff impartially researches legality of the the instructed gift and recipient without any emotional entanglement.

Research / talk to the charity

Really, at this point, the question becomes wildly subjective. It really boils down to doing research on the charity via reputable third parties; US services like GuideStar are valuable if the charity solicits in the US. And also, you should be talking to the charity itself; talking to you is literally the job of the Executive Director and his staff.

Answer 8

I think the subjectivity of charity oriented to a particular goal (say, saving lives) is hugely overrated. There's a substantial, thorough body of academic research around many interventions in global health development, and there's a lot of serious scientific work that's been done to determine what the consequences of funding particular interventions will be. While all science is subject to uncertainties and potential for revision, if you're willing to listen to your doctor when they say a particular medical procedure has been shown to reduce mortality from a condition you have, then you should be willing to listen to a development economist who says:

"From these trials, we concluded that ITNs reduce the child mortality from all causes, corresponding to a saving of 5.6 lives each year for every 1000 children protected with ITNs (high-certainty evidence)." Cochrane Collaboration systematic review

Knowing that, and knowing about organizations that distribute ITNs, what their budget is, and how many nets they distribute, you can figure out a best guess of how much it costs to save a life in this way. There's nothing subjective about it, it's all based on evidence, observations, and predictions.

Some existing work:

• GiveWell does a lot of analyzing this kind of research, and produces reports on their assessment of the evidence base for global health interventions. On the best interventions, it finds charities working on those programs and does in-depth analyses of their work, and how much further it would go with additional funding. Their aim is to make recommendations suitable for individual donors like yourself.
• The Open Philanthropy Project does more speculative and wide-ranging analyses with the aim of making giving recommendations to Good Ventures, a large philanthropic fund. They don't focus on recommendations for individual donors but they do publish a lot of their research and analysis in detail, which can give you insights into how full-time researchers might think about choosing between funding opportunities.

When you study evidence like this, one of the key lessons you learn is that which problem you are working on can be a much greater determinant in how much you achieve than how well you do it, how low your overheads are, or anything like that. Costs per life saved can span from mere thousands of US dollars to hundreds of thousands depending on how you try to do it, whereas it's really very unlikely that administrative costs and executive salaries will make a 100x difference in effectiveness (it would require comparing an organization wasting 99% of its budget with one wasting 0%!)

So, pick your focus area with particular attention to the evidence and reasoning around what effects it has, and find organizations working on it ideally with a strong track record and transparency in their operations.

It's worth remarking that in global health, there's a huge academic evidence base, lots of randomized controlled trials and systematic reviews, and generally you can hope for high-quality evidence. But there may be other areas that are just as important, where evidence is difficult or impossible to gather, e.g. around large-scale political reform, basic scientific research, or work to avoid rare but catastrophic events like pandemics or nuclear war. My advice there is to still consider the best arguments and evidence and academic work available, to work more from heuristics, historical analogies, and conceptual arguments -- but keep in mind always that there is still a fact of the matter about what the consequences of your actions will be, and what that is can vary dramatically depending on what you choose, so the importance of the problem you choose to work on still demands careful thought and analysis, because it will be the biggest factor on how much better off the world is with your contributions.

Additional considerations:

• It's not enough to find an important problem, if you don't have a strong reason to believe there is a tractable, feasible solution to it.
• It's not enough for an important problem to have a tractable solution, if the solution is not bottlenecked on funding. In that case your donation might not make more of the solution happen! (I've heard stories about organizations that partner with local doctors in the developing world to provide corrective surgeries, but run out of doctors before they run out of money, so they start paying doctors in other parts of the world to come and perform the surgeries, which is still valuable but much more expensive).
• Conversely, an intervention is more promising if there's some reason other people might have missed it. So for example, not everyone feels strongly about animal welfare, so if you do, you are likely to find better opportunities there; even among the money spent on animal welfare, a minority of it is spent on farmed animals, despite there being vastly more of them than pets or sanctuary animals, so if you care about those two groups equally, one represents more potential opportunities to help.

Answer 9

The concept of efficiency is very hard to measure in non-profits, as sometimes it's just too costly to measure impact. Sometimes you can't measure accurately the effect operations have on the field, for example because you can't predict what would happen without your action, or because it would be too costly to measure the impact.

The key considerations for donors should be:

• Consider that committed giving (monthly donations) might be more important for a non-profit, than 1-time contributions, as they allow better planning, and reduce costs by allowing longer term investments (e.g. buy a car instead of renting)
• Define not only what field you want to address, but also consider how that can have potentially impact spillovers.
  • For example, a nature conservation program might address not only environment protection, but also reduce poverty in a certain region
• Choose a registered charity, and give preference to charities that report their activities transparently

I have worked in a large International Non-profit organisation (INGO) in a German speaking country for 5 years. A few measures that we worked on to ensure or increase impact where:

• Ensuring accountability of the funds received: it's important to ensure that funds given are adequately used, which allows donors to trust that the funds will, in fact, be used for the initial promise. The INGO accountability charter, for example, is an initiative where several organisations report and measure each other to ensure accountability of their activities.
• Investing on research: we worked in childcare and not only supported children who no longer had parental care, but also researched what caused the loss of parents so we actively prevented the need for charity, thus increasing long term impact