Effective Altruism: Making Their Money Count


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“How do I do the most good with my donation?” is a question many donors ask these days, as the social movement of effective altruism carries its momentum into the 2020s. Effective altruism is commonly described as a philosophy that uses evidence and reasoning to determine the most effective ways to benefit others. And the vitality of organizations, such as “The Life You Can Save” and “GiveWell,” which were founded on those principles, is evidence that some donors are paying attention. So, the question for charitable organizations is, “Do you, and will you continue to, attract effective altruists?”

Espousing “strategic giving”

To appeal to effective altruists, you first must understand what drives them. Effective altruism — also known as “strategic giving” — doesn’t focus on how effective a nonprofit is with its funds. Rather, it looks at how effective donors can be with their money and time. Instead of being guided by what makes them feel good, altruists use evidence-based data and reasoning to determine how to help others the most.

  • Effective altruists generally consider a cause to be high impact to the extent that it’s:
  • Large in scale (it affects many people by a great amount),
  • Highly neglected (few people are working on it), and
  • Highly solvable (additional resources will make a substantial dent in the problem).

For example, a highly solvable cause may be to support the UNICEF-USA-backed K.I.N.D.: Kids in Need of Desks. A $110 donation literally lifts four school children in Malawi off the floor for their learning experiences.

Because they strive to get the most bang for their bucks, some effective altruists focus on nonprofits that help people in the developing world rather than those that work with U.S. residents. So, instead of donating to a U.S. school, an altruist interested in education might donate to an organization that provides nutrition to children in poor countries — because improving their diets also will improve their ability to learn.

Skeptics point fingers

Effective altruism isn’t without its skeptics. Some argue, for example, that planting doubt in the minds of would-be donors over whether they’re making the right choices could deter them from giving at all. Pressuring them to do additional research also might dissuade them.

Others question whether the focus on measurable outcomes results in a bias against social movements and arts organizations, whose results are harder to measure. Organizations in those arenas usually work to eliminate broader problems, such as income inequality or oppression, where progress isn’t easily quantified. The critics assert that effective altruism’s approach does little to tackle the societal issues behind many of these problems.

Critics also point out that an evidence-based approach ignores the role that emotional connection plays in charitable donations. When it comes to choosing which organizations to support, givers’ hearts frequently matter more than their heads. Look no further than the donations that pour in after a natural disaster for evidence that such motivation works.

Effectiveness and subjectivity co-exist

A 2018 study published in Psychological Science, “Impediments to Effective Altruism: The Role of Subjective Preferences in Charitable Giving,” looked at the influence on donor choices of providing nonprofit effectiveness information. The researchers found that, even when such information is presented in a way that makes it easy for donors to compare organizations’ effectiveness, donors often choose less effective options that represent their personal preferences. In other words, they donate to the causes that they prefer over those that do the most good.

That’s not to say that effectiveness information doesn’t matter at all. According to the researchers, while donors’ subjective preferences dominate their selection of causes, they’ll turn to objective information when choosing among charities that support their chosen causes.

Lesson learned

The lesson here may be that nonprofits should develop materials that show impact in addition to an emotional pull. Overlooking the effective altruism movement would likely be a mistake.

To learn more about how our firm can serve your nonprofit organization, please contact Dave Wolfenden at (302) 254-8240.

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