Measured approach to philanthropy
This meticulous way of giving has already encouraged a push towards evidence and measurement throughout the philanthropic sector. Caitriona Fay, national manager of philanthropy at financial services group Perpetual, says philanthropists have become more discerning, with her company placing a strong emphasis on tracking an organisation’s effectiveness and efficiencies.
“We have our own approach, and it is much like the approach we take as an investment house when looking at financial opportunities,” says Fay.
“We look at the quality of an organisation with respect to leadership and strategy perspective, and we assess if they’re an outcomes-driven organisation.”
Effective altruism has its critics. Many question the clinical, dispassionate, algorithmic manner in which the movement operates. Others believe that encouraging charity to Third World nations with dysfunctional governments prevents systemic change.
“This is a criticism that is definitely true of some types of charitable intervention and that would be a reason to look elsewhere,” says Farquhar, noting also that effective altruists are enthusiastic about working with governments or in policy areas to bring about change.
He adds: “I can’t think of a bigger systemic change than getting everybody to give a tenth of their incomes to the most effective causes. It’s a huge change at a societal level.”
Some think the movement is fixated on short-term solutions and that easily quantifiable causes have an advantage come assessment time.
Dr Wendy Scaife, director of Queensland University of Technology’s Australian Centre for Philanthropy and Nonprofit Studies, argues for
a more “measured approach to measurement”.
“Just as an example,” she says, “say you’re in the city accommodating country cancer patients while they’re undergoing treatment. You’ve built
a facility and you have counselors on hand looking after the families. People are surviving longer or have a better quality of life. How exactly can you measure that? How do you measure degrees of suffering? People may come up with measures, but is that where we want people in charities focusing their time and energy?”
Scaife says that many not-for-profit organisations, especially smaller ones, are under-resourced and would find it difficult to build a measurement capability into their models.
“Perhaps we’re part of the problem,” she observes. “If we want every dollar we give to go to the child on the ground, we’re not thinking about what delivery agents are required to make sure the money does get to that child and supports them effectively. It’s problematic to that extent.”
To an extent, Farquhar is sympathetic to the not-for-profit sector’s frustrations.
“Measurement by the charities can be difficult and is seen by some organisations as a distraction from doing the actual work,” he says.
“We appreciate that everybody who starts a charity cares very deeply about successfully solving the social problem they’ve identified, but being able to measure does help you spot the best opportunities.”
Fay is a little more pointed: “We don’t want to pit causation areas against each other. That’s the real challenge effective altruism has; pitting a sick child in a developing country against a sick child in a developed country helps no-one.”
Keeping the emotion
Effective altruists, or Farquhar at least, believe the “official party line” shouldn’t stop anyone giving to charities that have
a personal or emotional connection.
“It’s definitely not the wrong thing to do,” he says.
“I personally give to a couple of charities for emotional reasons that I don’t think are particularly effective. I view it as a different activity than making the biggest difference I can.”
Fay argues that no philanthropist wants to be ineffective: everyone hopes to make an impact or a difference in their specified areas.
“There’s nothing wrong with anyone feeling good about wanting to do good,” she says.
“In a period of great and growing wealth, we don’t want systems and barriers to giving. If you take away the warm-hearted component of philanthropy, who’d want to get involved in it?”
Scaife, however, believes that the popularity of effective altruism allows for more reflective activity in the sector.
“We shouldn’t have to follow slavishly what they’re suggesting, but instead take the good out of it,” she says.
“Measurement is a tool for improvement and it’s important for charities to respect that. It gets charities and funders thinking more deeply.”
Earning to give
The concept of “earning to give” has gained traction in the effective altruism community, largely since the 80,000 Hours website first appeared just over four years ago.
The premise of the organisation is maximising your income during your career (all 80,000 hours of it) and donating a share to charity.
Princeton University graduate Matt Wage was a philosophy student of Peter Singer’s. After graduating in 2012, he was offered post-graduate study with the University of Oxford.
Instead, he took a high-paying job at a Wall Street trading firm. He reasoned that working in finance would enable him to contribute more to charity (effectively, of course) than if he had chosen to work in the aid industry. In 2013, he donated more than US$100,000 of his salary.
“I worked as a management consultant, during which time I gave considerably more than I do now,” he says, adding that “about 1300 people have pledged to give at least a tenth of their income for the rest of their life through the website Giving What We Can”.
Effective altruism in practice
Effective altruism applies evidence and reason to measure the most effective ways to improve the world. To read more about the movement’s methods and recommendations, these websites provide many of the answers: