Giving Effectively

How can you do the most good with your donation?

Your money goes further overseas

Food, services, medical supplies and other basic resources are far cheaper in most countries outside Australia. Distance can make it harder to empathise, but we believe location should not be morally relevant to who deserves our help.

In the poorest parts of the world, some of the problems preventing people from overcoming poverty can be improved with simple and cheap solutions. A child may die of malaria for lack of a $3 bed net, or of diarrhea for lack of a 5 cent packet of nutrients. That means your donation can have a much larger impact if targeted at cost-effective interventions operating in developing countries.

Not all charities are equal

Consider two charities, Charity A and Charity B, both of which aim to save lives. Say you donate $100 to Charity A, but later find out that Charity B is 100x more effective. That means you could have had the same impact by donating just $1 to Charity B. Given that both charities are saving lives, the best decision is obvious.

Now consider the following five interventions, all aimed at preventing or treating HIV and AIDS:

  1. Surgical treatment for Kaposi’s sarcoma (an AIDS defining illness)
  2. Antiretroviral therapy for infected people
  3. Prevention of HIV transmission from mother to child during pregnancy
  4. Condom distribution to prevent sexual transmission
  5. Education for high risk groups such as sex workers

Whilst the world’s strategy to combat the harm caused by HIV will necessarily include all of these interventions, the most powerful way for an individual donor to add value is at the margin. Rather than replacing a complex health system, it makes sense to add as much additional value as possible.

Accurately determining and comparing the impacts of interventions can be very difficult, however there is a large evidence base assessing the success and cost-effectiveness of many interventions aimed at reducing poverty, particular with regards to health. It turns out that some interventions are much more cost-effective than others. The chart below reveals the wide range of health benefit produced (measured in disability-adjusted life years) for each HIV intervention.

Cost effectiveness of HIV treatments.

As you can see, education for high risk groups brings about 1,400 times as many health gains as treating Kaposi’s sarcoma. This doesn’t mean that it isn’t important to also provide treatment for this disease, but by investing to prevent HIV infection, we can prevent many more people from ever acquiring the disease and needing such treatment.

Cost-effectiveness is a crucial factor to consider when figuring out how to make our resources go as far as possible. Read more about cost-effectiveness here.

Finding effective charities can be the difference between transforming lives and accomplishing nothing

Even charities working within developing countries can have dramatically varying degrees of cost-effectiveness, depending on their intervention. A charity can be well-funded and successfully implement their program, yet still fail to achieve a positive impact. Good intentions and flashy marketing don’t prove a charity is effective, and can lead to a significant amount of wasted charitable giving. Luckily, independent charity evaluators such as GiveWell are devoted to seeking out interventions that are backed by evidence. Choosing to donate to one of our partner charities assures your donation will fund programs that are actually proven to effectively improve lives.