The below comments are taken from my response to an article featured on www.adelaidenow.com.au. This article contained several fundamental flaws which are potentially harmful and need to be addressed, as The Advertiser has not made a move to issue a correction.
On December the 17th, Anthony Keane wrote a piece titled ‘Why you should choose charities wisely’ with quotes from Fausto Pastro and John Oliver suggesting reasons for vigilance when choosing which charities to support. Unfortunately, this article contained several major errors and misconceptions which should be cleared up.
Pastro says that “With donations, there is no right way or wrong way. Anything you do is right.” This claim is objectively wrong, and even potentially dangerous. Not all charities and programs are equally effective. In fact, some turn out to produce more harm than good. For example, the Scared Straight program has been run in USA since the 1970s and places teenage delinquents in a jail for several hours, where they are threatened and yelled at by guards and inmates. The idea is that the students will be so scared of prison they will stop committing crimes. Unfortunately, what sounds like a good idea doesn’t work, and is in fact outright harmful. Of nine studies performed on this program, two suggest that it has no impact, and seven suggest a negative impact. The teenagers would have been better off if they had not been in the program to begin with. Donating to a program like this would not be ‘right’.
In addition, some methods of improving societies are hundreds of times more effective than others, even for producing the same outcome. For example, take the following three methods of preventing or treating HIV and AIDS; surgical treatment for Kaposi’s sarcoma (an illness characteristic of AIDS), antiretroviral therapy, and education for high-risk groups. On a dollar to benefit basis, antiretroviral therapy is 50 times as effective as treating Kaposi’s sarcoma directly, while education is 1,400 times more effective. If one were to decide between supporting a program that treats Kaposi’s sarcoma and one that provides effective education, the choice should be clear. When we buy a new car, we shop around to find the best value for money. It’s surprising how little this is done with charities, and how often we trust the money is being spent well.
The article also criticises charities with high administration costs (staff salaries etc.), but in reality a high admin cost does not always mean an ineffective charity. Admin costs are an important and necessary part of running a charity, and if a charity spends an extra 10% on salary to attract a top management team which boosts effectiveness by 50%, this shouldn’t be vilified. With the example above, a charity providing education with 10% of their costs being admin would still be far more effective than one treating Kaposi’s sarcoma with admin costs of 1%.
To be fair, it’s hard to figure out which programs work. It takes randomised controlled trials and a lot of analysis. Luckily, a new breed of organisation is doing this work for us. Meta-charities such as GiveWell analyse the cost-effectiveness of charities to provide, free of charge, a list of the very best from across the world.
Unfortunately, 75% of charity programs end up having little to no impact, or even a negative impact. It’s not enough to pick the charities that seem good and have low administration costs. So when you donate, don’t just do your homework, do the right homework.