De Econometrist neemt een statistische kijk op de wereld.
Imagine you are walking past a muddy pool on your way to work and you see a child drowning in the pool. You realize that if you want to save the child, you would not only ruin your outfit, but you will also be late for work.. Probably without doubt, you would conclude that the life of a child far outweighs that consequences, and you would save the child. We all feel the obligation to save someone’s life if it only costs us the purchase of a new outfit and an hour of our time. If you are able to save or change lives for relatively low costs, would it matter that the persons you help might be on the other side of the world? Does the obligation to help change by means of distance or nationality? Intuitively, one would say that it does not. But in this sense, why are we still buying each other expensive yet relatively useless Christmas presents, instead of giving (a part of) our Christmas expenses to charities who could save numerous lives with it?
The thought experiment of the drowning child is one that philosopher Peter Singer already described to his students in 1997. According to him, his students unanimously agree on their obligation to save another person’s life. However, at the moment they cannot provide help directly, when the drowning (or ill, hungry, whatsoever) child is not in their sight, they come up with a practical and very relatable question: how can you be sure that your donation is spent well and ends up with the right people? And another difficult thing to consider in this aspect: if you are willing to donate to a charity, which one should you choose? How can your money make the most impact where it is needed?
The question how you can put your donation to the most good, is examined by many. One organisation that is formed based on this question is Effective Altruism, that focuses on how reason and evidence can be used to do the most good. Their vision is to find causes that are likely to have the most impact, and therefore would be the most valuable to invest money in. For this, they set up a framework that mostly focuses on whether a cause is:
– Great in scale, as high impact can be achieved if a cause heavily affects many people’s life;
– Highly neglected, as the impact you can have is probably higher if there are not many people working on, or aware of, the problem yet;
– Highly solvable, which means that additional (financial) resources will really provide the ability to address the cause.
Keeping these values in mind changes our view on different charities. For example, take the education of a guide dog for a blind person. According to Singer, this can cost around 40.000 USD. For the same amount of money, over 1.000 people with trachoma in developing countries can be cured from blindness. For an effective altruist, it is clear that your money can better be invested in projects on the cure of trachoma than on the training of guide dogs, if you want to achieve the highest impact with your investment.
To get a better view on how much impact different charities have, one can visit the site of GiveWell, an independent charity evaluator. They estimate the impact of different charities, and give recommendations on where you can invest your money to cause the most impact. GiveWell estimates impact based on the three core-values stated above, and is highly focussed on whether there is sufficient evidence for the impact of a project. In the end, they try to calculate the expected impact that each charity has.
However, the estimation of impact is difficult, and there is some discussion on which ideas will or will not have a significant impact. The Open Philanthropy Project, which was once part of the GiveWell organisation, elaborates on this and on the counter-intuitive ideas that come with investing money in charities with the highest expected impact. The problem with investing in the project with the highest expected impact, is that one might be investing in a project that has high probability of not having any impact at all. For example, a charity that can guarantee to save a hundred lives with a donation of €100,- has a lower expected impact than a charity that has, with €100,- budget, 90% chance of not having any impact, and 10% chance of saving 1500 lives. Mathematically, it is reasonable to invest your money in the second project, but it is quite hard to convince people to voluntarily invest their money in a charity that has high probability of ‘failing’. The Open Philanthropy project aims to recognize and finance the projects that could have major impact, but they are well-aware of the difficulties this brings.
The Open Philanthropic Project also makes an analogy between donating to the most impactful charity and investing in the most promising start-up. As Paul Graham describes in his essay Black Swan Farming on investing in startups: “…effectively all the returns are concentrated in a few big winners.” To illustrate this, we can take a look at the organisation Y Combinator, of which Graham is a founder, that funds early stage startups. According to Graham, the total value of all companies funded by Y Combinator was around 10 billion in 2012, while 75% of this amount was accounted for by only two companies, Dropbox and Airbnb. This shows that investing in a wide variety of start-ups pays back if there is a big winner among them. The same holds true for investing in charity projects: consider a situation where you invest in several projects and almost all of them have zero impact. However, if there is one big winner in the batch that achieves an impact of saving 10.000 lives, the whole batch has more impact than if you had invested in 10 projects that have a certain but small impact of saving 100 lives.
But how do you recognize a good idea, or a charity cause that is likely to be a big hit and have huge impact? According to Graham, the best ideas initially seem to be bad ideas. As an example he takes Facebook: a platform for a small target audience (students) with little money (as they are students) to do something not very interesting or valuable (expand their social lives on the internet). Although this may not sound as the best idea when pitching a startup, this was the one that could have caused major profits if you invested in it at the right time.
The Open Philanthropy Project calls investments with the intention of having one big winner in the batch “hits-based” giving. The question they then ask, is how to find these good bad ideas. There is no exact guide on how to find them, but at least one can argue whether the normal framework of evaluating is correct. According to the Open Philanthropy Project, a project is more likely to be a possible big winner, if it operates in a field that has not been operated in a lot. Otherwise, someone else probably already had the great idea that would have had such major impact. But if a field is not widely researched yet, it is hard to provide sufficient evidence for your good (or seemingly bad) idea. Therefore, the request for a strong evidence base would be contradictory to the core value of neglectedness, as the Open Philanthropy Projects states.
Furthermore, in “hits-based” giving, it is important to be willing to face controversial positions. Take for example the oral contraceptive pill: although it was quite clear that it would be a good idea in the sense of global health, a lot of people were against the contraceptive pill for, for example, religious reasons. Keeping this in mind, it is not only difficult to recognize an impactful idea, but also to convince others of the rightness of it, and to stimulate them to effectively invest money in it.
Up until now, we have mostly spoken about the impact of charities by means of the number of lives that they may be able to save. This number is relatively easy to calculate if we are facing problems of world health, but we face a lot more problems talking about the impact of charities that try to influence politics in certain areas. Take for instance Amnesty International: this is a non-governmental organisation that is focused on the enforcement of the universal human rights. Amnesty International mostly works on research projects and tries to raise awareness on the lack of enforcement of certain human rights in certain areas. It is very plausible that this raise of awareness can be the cause of protests that might influence a change in policies. However, it is not possible to directly point out and quantify a causality between the actions of Amnesty International and improvements in life quality for a certain number of people. Because of this, it is hard to calculate a direct expected impact of a donation to Amnesty International, although it is clear that they do achieve very important goals in their raise of awareness.
Another interesting example would be a charity that invests in research on cancer and cancer cures. To effectively have the most impact, it seems as if such an organisation should invest all their money in the education on the negative health effects of smoking. In this way, they could prevent many people from having lung cancer for relatively low costs per person, whereas research is way more expensive and might be effective for less people. However, it seems odd and counterintuitive to donate to a cancer fund if the organisation only uses this money to prevent people from starting to smoke, instead of doing proper research on the possible cures for cancer.
There are many charities to donate your money to, and as we have seen, it is hard to exactly tell how effective your donation is. Although a calculated expected impact does not reveal everything, reason and research can give a lot of answers. During Christmas time, it can do no harm to take a look at the presents you might have bought for your loved ones, and see whether you can give a present to someone you do not know as well, such as an insecticide-treated net to prevent malaria, or a deworm medicine. And if you are doubting which charity you should give your money to, taking a look at the top charities on the site of GiveWell can provide some great causes to better the lives of others. And in the end, bettering these lives is something which we intuitively agree to be obligated to, according to Peter Singer and his students.
Dit artikel is geschreven door Marleen Schumacher