Effective altruism

As an OzBargainer, there's nothing worse than spending money unnecessarily :P But let's face it, beyond food and shelter etc, most of our spending is strictly unnecessary.

I've been getting interested lately in effective altruism [1,2]. The gist is two principles: firstly, the philosophical position that [3]:

If it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought, morally, to do it.

It certainly is in our power to prevent bad things from happening (i.e. to save lives and prevent suffering), so we should.

The second principle is that, rationally, we might as well use our power to do so in the most effective way possible. (I'm sure this is a principle that OzBargainers can agree with!)

So, I've decided to pledge 5% of my annual income to these effective charities [4]. Why 5%? See these calculators [5, 6].

I encourage you to check out the links below. I consider myself to be quite a rational person, and I've yet to find any holes in this argument. I was very impressed with the TED talk in particular [1].

What do you guys think?

[1] http://www.ted.com/talks/peter_singer_the_why_and_how_of_eff...
[2] http://www.givingonepercent.org.au/
[3] http://www.utilitarianism.net/singer/by/1972----.htm
[4] http://www.givewell.org/charities/top-charities (note: they're currently not tax-deductible, but that's ok. I've yet to find an equally reputable resource focused on charities that are tax-deductible in Australia.)
[5] http://www.thelifeyoucansave.org/ThePledge/HowMuch.aspx
[6] http://www.givingonepercent.org.au/index.php/how-much-to-giv...


  • When you are comfortable in life, it is good to give to others.
    Although I don't give 5% or 10% of my income (tithing) I do have a number of charities I donate to.

    Also, when I do some work for a charity and have received my payment, I will then show up the next day at the charity's office and donate 10% of that back to them.

  • Sounds like a good idea to me. I've always thought you can either spend money on helping others now or you end up spending twice as much on security to defend yourself from them later. When people are dying they don't quietly crawl under a house like a dog would and do it quietly, they thrash around like a drowning man, dragging down the people closest to them.

    5% is a good number, as its practically nothing. Nobody gets excited about a 5% discount on this site, but cumulatively it adds up to a lot across a whole population. If you always budget for that extra 5%, then you always have that as a form of protection, a final section that you can cut into for when you're really starving. If you're living that close to you're income that you can't justify giving away 5%, it means you're living on the edge and your existence is unsustainable.

  • Reminded me this poll someone did a few weeks go. At the end being "rich" or "poor" can be objective (comparing with selective group of people in monetary term, for example), or subjective (whether someone feels rich or poor).

    IMHO it matters more to feel rich, and be content is one way to get there. Once you feel rich & content — you have enough, while there might be something that you want but you feel you have everything you need — it can become a lot easier to be generous towards others. Give to charity for example. Give to those who are less privileged (and how privileged we are, living in Australia).

    And living is a lot more than climbing to the top of the pile.

    • "And living is a lot more than climbing to the top of the pile."

      Try suggesting that to ethereal.

      • Then I guess you shouldn't even be on OzBargain, a site about shoppers helping each other to find good deals and what to buy, etc.

        The fact that communities exist (lots of them on internet and "real life") demonstrates people are inherently social, and to some extend would work towards social good.

      • Can I hire you to be a clown for my kids' birthday party? You sound like a hoot!

    • Yup, I agree that it is easy to give once you feel you have everything you need. I'd even go one step further. Say you've got $X to spend on upgrading a printer. As an Ozbargainer, you do your research, weigh up the spending options, and choose the one that's going to result in the most benefit - the best outcome.

      The trick is to include in the list of options not just HP, Canon, Epson etc., but also the option of giving the money away to various charities. Then, as a rational Ozbargainer, if giving the money away would result in the "most benefit", you'd be mad to do anything else. You'd be neglecting to choose the best option. That's irrational. You'd be as mad as walking into Myer and buying the first printer you see. :-P

      The only assumption is that we choose our actions based on their overall consequences, not just their effect on ourselves - and in general, I think that's the way we ought to make decisions.

  • Surely the most effective altruism is giving to an entity that is both a worthy recipient AND a DGR?
    That way you maximise your return on donation - you can even give away the tax refund if you want.
    Surely there must be a charity out there that meets both criteria?

    • Great question. If tax deductibility is important to you, the evidence suggests you go with Oxfam, which is ranked 5th in the list of top charities at The Life You Can Save.

      Giving One Percent provides a long list of other Australian DGRs but does not recommend any particular DGR as particularly effective.

      Note, however, that GiveWell advises tax deductibility is not critical:

      In general, we think that differences in effectiveness between charities are sufficiently large that in cases where the best giving opportunity may not be tax-deductible, it makes sense to give a smaller post-tax donation to the best organization rather than a larger pre-tax donation to a tax-deductible organization. However, we understand that donors may have different intuitions on this question, and are hoping to eventually have tax-deductible giving opportunities in other countries with many GiveWell users.

      GiveWell's top ranked charity, the Against Malaria Foundation are hoping to be listed as a tax deductible DGR in Australia in a few months, but they have advised making a smaller donation now is more effective than waiting for DGR status before making a larger (1.3x) donation.

      • Thanks, I was looking for some "Effective Charities" in Australia (and also tax deductible).

  • +8 votes

    I read my Ozbargain newsletter every day since i joined some years back. Every day brings many excellent articles but i think this is the best post i have ever read, thank you Waldo!

  • +1 vote

    Awesome post. Thanks waldo.

  • I think the part of your post that resonates most with Ozbargain (and myself) is value. We all want to make our money work the hardest it can.

    Considering alot of charities chew up most of your donations in administration fees, a site like givewell.org [4] provides some really effective and transparent options.

    • Im always curious what % the church gives back.

      From what I see they rely on mostly volunteers…

      Where does those donations and 10% tithes go?

      court bills?

  • If you get a chance to watch a new movie called "The Purge", then you will see that we don't need to donate. haha.

    Anyways back to reality, I find that giving to charities aren't bad as long as it makes it out of the country. Giving to the homeless guy on the street, then I'd think twice. Its almost like getting scammed in broad daylight.

    If you have legs, if you have hands, why are you begging on the streets. Clean yourself up and go work at Maccas or something. Or even go work for a farm, they pay quite handsomely although its tough work. And don't care who works for them.

    • I'm willing to bet you've never worked as a social worker. If only it was this easy.

      • I'd still rather donate to charities such as Salvation Army than give to someone on the street. I figure they're able to better distribute it to needy/homeless than I am.

        • I tend to disagree.

          While I think the Salvation Army does a lot of good the fact that it is not just a charity but a church puts me off.

          Even though I co-sponsor a child I also feel the same way about World Vision - I worry that my charitable donation will not just go to charity but assists in their proselyting work (even if only indirectly by positive PR).

          I would much rather give directly - that way not only do I know where my donation is going, I know that 0% of it is lost to admin costs.

          The only downside to this is that in Australia many/most charities aren't really geared up to deal with gifts in kind, the ATO sets rules on what will qualify and I can't claim anything for my time.

          I kinda feel that to get the most bang for my buck any gift should attract a tax deduction - that way its kinda win-win.

        • I would much rather give directly…to get the most bang for my buck any gift should attract a tax deduction

          Consider these charities:

          Both are great options.

        • Definitely better to donate than to give to those on the streets. I do homeless food runs, and in addition to giving them a meal every night of the year, I know charities like the Salvo's and St Vincents try to get clothes and blankets to help them out. These charities really do need community support and they have volunteers out there every single night of the year. Its amazing..

          Giving them money doesn't usually get far….

    • These people have mental health problems, drug/alcohol addictions, just can't cope in real life, etc etc…

    • That attitude is very short-sighted. Mental illnesses are actually a real thing and I'm guessing a large proportion of people who share your view may actually (ironically) suffer from an autism spectrum disorder.

    • I beg to differ, hope you don't mind.

      If you won't help someone until u have not secured your future or you haven't pay back your mortgage, then you won't be able to help anyone in your whole life.

      Also if you/me/everyone thinks that rich people should donate first and i'll donate when i'll be rich then there won't be anyone who is donating. Because no wealth is enough to make you rich, once one become rich, he/she thinks to become richer and then richest…Just my thoughts…

    • You're already "ahead". If you've got a mortgage loan, you are within the top 1% of global income. How much further "ahead" can you get?

  • There was a documentary on Compass (ABC) a while ago that looked at why Australia has such a low rate of philanthropy, especially amongst really wealthy people. Some of the people who were featured made some really good points about why we should support charities. Yes, they are millionaires and therefore in different situations to most of us, but a lot of what they said resonated with me (who is definitely NOT a millionaire!). http://www.abc.net.au/compass/s3776381.htm

    • I would love to see increased government assistance to compensate for the lack of charitable giving. I think there's a perception that money is given via taxes in adequate amounts and that is good enough. The reality should match this perception.

      • I see your point. However, I personally appreciate the freedom to choose who to donate to (in my case, only the most effective charities). I'd rather not surrender that freedom to the government. :-)

        • I also enjoy the perception of freedom and choice but my point was to increase the level of charitable giving to OECD standards. If we're not pulling our weight, then something should be done.

          Government donations have the benefit of having some political weight as well. Such as conditional giving- "We give you X amount if you strengthen/deregulate your market/institutions."

  • One thing that turns me off charities is that a lot of money never makes it to the intended recipients, it just gets gobbled up on office rental, equipment and employee salaries. For instance, only 1.2% of the money raised by Bono's charity was spent on helping people. http://www.dailymail.co.uk/news/article-1314543/Bonos-ONE-fo...

    I don't feel inclined to fund cushy non-profit jobs for lazy white collar types.

    And then there are those people who solicit "donations" in the CBD's of cities, claiming it is for accomodation, a trip home, food, and so on. Mostly it is just spent on alcohol and drugs. In a socialist country like Australia, people have no right to coerce donations from others, and should be pilloried for such vulgar behaviour. Begging is a natural part of life in India and Buddhist counties (Monks, Nuns begging for rice), but not here.

    That said, some people say that giving to others (in time, money, caring, encouragement) makes you feel better, while focusing solely on getting ahead in life locks you into misery and neurosis. Tibetan Buddhism has a strong emphasis on giving, compassion and cherishing others more than oneself (they call it Bodhichitta). However, publishers of books on Tibetan Buddhism are just as greedy as the MAFIAA.

    • This charity may address your concerns: GiveDirectly

    • You are wrong.

      Most of the money from charities like doctors without boarders goes to charitable services and the remaining about 13% spent on raising funds. See previous comments on World Vision.

      I do not know about Bono's charity. Why you selected such a bad example I do not know.I am sure there are such charities. Most respectable charities mention mention how the money is spent on charities.

      Although giving your spare coins to a beggar or a monk is charitable donations, that is not what the initial poster is talking about.

      Your rationalization on not being a charitable person lacks proper reasoning.

    • Sir, poverity does not follow geographic boundry of countries, it exist in Australia, India, Tibet everywhere. Poor are one who can't afford food/home. They may be poor due to any of xyz condition, and its society who help them via some charitable organisation or individual.

    • Again, mental illnesses are rife in the homeless. But pouring your money into mental health institutions won't help some that are beyond our help. The best thing would be to give them some autonomy in their lives- i.e leave the homeless alone. If they want to fund a bit of escape with drugs or alcohol, thats their choice- just like a good proportion of everyday Australians, CEOs, lawyers and doctors.

  • People here may already be aware of this website, but kiva.org is an interesting one to look at. It involves micro lending to countries where credit is difficult to obtain in $25 chunks. I have made a number of loans on the website over the last year or so and have found it very transparent and rewarding, especially as when you receive repayments from previous loans, you can then lend that money to another borrower. Not for everyone, as it is micro lending, rather than donating, but I thought it was worth mentioning :) I continue to give to other charities, while making loans through Kiva.

  • I m not surprised to see that very few people are paraticipating in this discussion. This also explains that either people do not have enough awareness about altruism or they just don't want to donate.

    If you ask about any advise like bday gift or car advise or any other bargain, you'll get 100s of advise or post or comment. But when you ask them to donate, everyone will be silent. I think its high time we realise the importance of giving. They don't even want to think or discuss about it.

    I might be wrong in saying that people are not interested in giving, and in this case this thread should have more inputs, thoughts and comments..

  • I'll be honest, I only donate to welfare charities when physically approached by somebody.
    What are peoples thoughts on government welfare? Sometimes I feel like no matter how much help you individual people, it's not as effective in the long term. Many countries in Africa have corrupt governments that are unable to manage their own economy. Some countries are just made up of scattered villages. It's important to provide more government assistance so they can understand how to manage and unite their cities to actually form a system.
    Charities provide basic infrastructure/schools/food, and while although it's a great start, I feel like it's just separating these villages even further. Something needs to be done to improve the government to provide a more long term solution. Donating money is still a great start in improving poor countries though.

    • I think you raise an important question: i.e. Is it more efficient to help individuals or help governments? I suspect GiveWell has looked into this in the process of determining their top charities, though I'm not 100% sure. If you find any conclusions, please share them here.

      Anyway…to choose between helping individuals and helping governments is not the main point. The choice that I would like to draw our attention to is more like:

      1. Should I give $X to someone who desperately needs it and/or their supporting government/NGOs, versus
      2. Should I spend $X on a new phone (or new shoes, or a carton of beer, etc.)?

      I would argue, as an Ozbargainer, that curing blindness for as little as $15 is a much better bargain than…well, pretty much anything ! :-)