Getting the most bang for your charitable buck

I just received a mailer from Effective Altruism, via which I do a monthly donation to charity. The mailer asked me to rate from 1 to 10, with 1 being least likely and 10 being most, how likely I would be to recommend Effective Altruism to a friend. I gave it a 10.

And since we’re all friends here on edonn.com… I recommend Effective Altruism if you’re looking to make your charitable dollar do as much as it can.


Effective Altruism is an organisation that’s, in their own words: about answering one simple question: how can we use our resources to help others the most?

I first learned about them through a book called Doing Good Better (loved it; it absolutely changed the way I thought about giving – especially the part talking about the careers we ought to pick for maximum societal impact: should we pick the higher-paying career where we have little opportunity to positively impact society, e.g. an investment banker; or the lower-paying career where we can make a positive, direct impact on society, e.g. a social worker? The book argues that it is the former that we can do more good, if we direct the funds we earn to charitable causes).

Its basic premise is this: all charitable interventions should be scientifically tested to determine how effective they are, and money should only flow to those that are more effective.

The more good an intervention does for a given amount of money, the more effective it is deemed to be.


How much “good” an intervention does is determined by the amount of QALYs and WALYs. This is a very interesting concept that I’d not heard of before coming across Effective Altruism.

A QALY stands for “quality-adjusted life year”, defined as (from Wikipedia):

[A QALY] is a generic measure of disease burden, including both the quality and the quantity of life lived. It is used in economic evaluation to assess the value for money of medical interventions. One QALY equates to one year in perfect health.

A WALY, on the other hand, stands for “well-being adjusted life year” (from the US Institutes of Health website):

[A WALY] is a measure that combines life extension and health improvement in a single score, reflecting preferences around different types of health gain.

In essence, the amount of good relates to how much life and life improvement it brings. The benefit of of using QALYs and WALYs is that they are fungible, and are therefore able to act as very versatile measures of charitable intervention.  A little like good old money.

For example, if you want to take up a new job, it’s extremely convenient to start thinking about the benefits in terms of money, even when some of the benefits are non-monetary. If you get more vacation time, how much more is an extra day of vacation worth to you? If the working hours are less, and you are planning to spend this extra time with your kids, how much more is this worth to you? And so on.

It helps us make apples-to-apples comparisons between two very disparate things, like deworming vs. microfinance.


Effective Altruism thus looks at the quality of all interventions, and aims to focus funds toward interventions that are the most effective. And though it may not be perfect, I find that it gives me peace of mind.

It allowed me to finally get past paralysis by analysis, making me comfortable with giving more money than before.

I still do give to random strangers on the street because it feels good; but for regular and systematic giving, the kind that I think will do far more good, this will be my avenue of choice.


And to those who ask: Is this “too scientific”? Shouldn’t giving be from the heart?

My answer is: No to the first question; and yes to the second.

The science and experimentation behind Effective Altruism helps to ensure accountability – charities that are deemed ineffective tend to be ineffective for very good reasons, and every dollar given to an ineffective charity is one less dollar given to a more effective one. Why should less effective charities, even those with the best of intentions, take money away from those that can do more good?

To be honest, I did have some concerns about how newer interventions or charities would be handled by them – many charities and interventions start out less effective than the most effective ones and need to be given a chance to grow and show their worth, and may eventually become as effective than the most effective ones or even more so. However, Effective Altruism does take care of some of that by having a dedicated allocation of their fund that looks at just these “promising charities”, which introduces a little bit of randomness into their portfolio of current strong performers.

On giving from the heart, to be honest I never really found a “logical” reason for giving, nor have I looked for one. Giving to me has always just been something we should do to be thankful we have what we have, that we are who we are.

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