Why You May Be Donating Wrong and My Brush With Effective Altruism

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A few years ago, I suggested nonprofits might start to see laws requiring impact benchmarks to keep their nonprofit status.  Sadly, much like the prospects of a reunion N’Sync tour, this hasn’t come to pass. At least not entirely, though watchdog groups and state agencies are starting to ask more questions about this.

The irony is, it has come to pass on the for-profit side; with the Public Benefit Corporation not only requiring benchmarks but requiring organizations report on those benchmarks.

I secretly hold out hope we’ll see nonprofits (legally) held more accountable for their impact. For now, it looks like it won’t be the legal structures but foundation dollars that may be the next wave of benchmarking enforcement.  I talk about this with the Dell Foundation’s announcement to give to solutions that are more disruptive, systemic and evidentially more impactful. But I also got a chance to dive head first into the growing trend of giving as impact enforcement  a few weeks ago at the Effective Altruism Global Conference hosted at Harvard.

 

The Who and What?

Effective Altruism (EA so I don’t have to type that out) has many concepts, and it can get complicated quickly. Fundamentally, its mission is to promote more reasoned giving. And for EA, success is a world where everyone donates only to a highest and best use. The determination of which is calculated by looking at a few different factors, like how much a solution costs, the quality of life of those impacted before and after the solution, the number impacted by the solution, etc. Follow?

Giving From the Head and the Detractors

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EA has its own way of deciding what [it believes are] the highest and best solutions are. Then it recommends cause areas using these solutions out in the world.
Its methodologies and cause areas are a touchy subject. Even I take pause with the belief that any one organization can determine the “highest” and the “best” use of anyones dollars, especially on a global scale.

There’s also the reality that quite a few of the factors it uses in its methodology for determining highest and best use are subjective.  But, by its very nature it calls for a pretty utilitarian approach. That is to say, its giving recommendations are based purely on reason and its consequences can be hard to swallow for some. Because it requires pretty tough moral decisions. Do you help one person that could have a high quality of life over 10 who might have a “mediocre” quality of life?  EA would say yes.  Essentially donation triage on plant protein based steroids.

I don’t believe you can solve the worlds problems solely with “reason.”  In fact, I’d argue our tendency to straddle to far on the “feels good” side or conversely too far on the “theory” side are primary reasons why many of our large scale problems still persist. In fact, one could say the belief that sliding into rationality based arguments on anything involving impact is in itself an indicator of disconnect. Because there’s a real connection, empathy and intuition that comes with any type of impact, especially collective impact. And I’d argue it has just as much a place as any rationality argument.

I bring all of this up because that I attended and will continue to learn more, under no means indicates I’m a convert. I have serious concerns with any organization appointing itself as THE authority on impact. There are certain precepts of the movement that seem a bit preclusive and out of touch. I’ve even heard (understandable) arguments that the very use of “altruism” in the name is a bit bourgeoisie (boogie for the young folks). I wonder if its a cultural difference but understand the sentiment. 

Show Me the Numbers

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Despite all of this, when is the last time you asked an organization you donated to for its impact numbers? If you bought a skincare product, only to find out out it was 10-20% effective, or worse not impactful at all, how would you come out feeling?
 
Yet, that’s what we do with so many charities. We continue to give to organizations who have no idea what impact they’re having, and honestly don’t care to. Don’t get me wrong, I love seeing lives changed as much as the next person. But at what point will we ask ourselves, “Could this be done more impactfully?” If there’s a founder in one or two schools that is dramatically changing the lives of 5 or 6 kids, why shouldn’t we push them to do more? And if change is truly their focus, why shouldn’t we push them on why this isn’t being done in a way that could build more capacity? Through partnership, outsourcing or even information sharing?

Call a “Thing” a “Thing”

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Another way of saying, let’s be honest for a moment. There’s a film of selfishness that covers a large swath of people in the charitable world that none of us really wants to point out. 

Far too may founders choose to do things “their way,” with little to no  stakeholder involvement. No end game. As someone who likes to play in the sandbox alone, I get how hard collaboration is. But there’s a reason why, “It takes a village” is a time old adage. Because it truly does. And anyone that refuses to look at the reality of their work (that maybe they aren’t having the desired impact or that their solution may not be the right solution) doesn’t really have impact as a focus. And we have to start calling organizations out on this. If organizations aren’t asking themselves, “What are we doing wrong?” who’s to say that what they are doing is “right?”

My Takeaway

Back to the EA conference, I walked away with more questions than I came in with. But I can absolutely get behind “higher” and “better” use. I think we should all pause before giving, and push ourselves to stop supporting organizations who stay on life support. Instead, applying some of the same market pressures you see with for-profit organizations. Where at some point, founders have to take accountability and decide whether their way of fighting the good fight is worth sustaining. Should they merge? Or dissolve and approach “it” from a different perspective?

My hopes for EA is it moves away from trying to establish itself as a standard and instead focuses on becoming a bridge. Allowing people to understand how to give to a “higher” and “better” use, as defined by their own experiences. But ultimately easing them in a more global way of thinking. As donors begin to see how connected our world is. Because I do think EA is a great framework for educating people on how to inform the very same feelings that push them to give. At the same time, creating a situation where nonprofits will have no choice but learn how to collect and report on their impact because it will become a donor expectation.

This post may seem weird on a more legal blog. But I think it absolutely ties in, from the perspective of what can we do to create more sustainable, impact and accountable organizations. I absolutely think that tracks all the way back to money. Individual donors, corporations, the government and private funders all need to do what they can to impart accountability sprinkles unto the world. And I think this starts with pushing organizations to prove how much change their effecting, and prioritizing from there.