How to give more effectively
The world has many social problems which philanthropists are trying to solve, but philanthropy is not addressing those problems in an efficient manner, according to Eric Friedman in his book Reinventing Philanthropy: A Framework for More Effective Giving. The problem is that donors tend to give to causes that appeal to them, instead of directing their giving towards the organisations which address the biggest problems in the most effective ways.
As the author acknowledges, it is impolite for him to question other people’s acts of kindness, but the fact remains that a large proportion of resources in the charity industry is dedicated to making donors feel good about themselves, in order to elicit more donations to sustain the industry, with correspondingly less being applied to addressing the actual social problems for which the donations are intended.
Moreover, because donors are biased towards causes that affect them personally, charities which serve the interests of rich people attract more funds than charities which serve the poor. The author’s wants to change philanthropy by encouraging donors to adopt new strategies, including:
- Comparing the options for your donation to determine which would have the greatest impact
- Focusing your philanthropy where you think it matters most
- Focus on the marginal impact of your donation
- Put your money in the hands of people you believe in
- Prioritise developmental aid over disaster relief
- Avoid programs aimed at maximizing the donor’s experience
- Do not try to micromanage the organisations to which you make donations
Although the book makes a number of very helpful suggestions, the author seems to have an unquestioning faith that the world’s problems can be solved by giving money to charities, with the only issue being selecting the right charity. Hence the author advocates making donations and not getting personally involved unless you have specific skills. In my view, many of the biggest problems are caused by systemic issues over which charities and donors have no control, requiring long-term cultural change, and personal engagement by supporters is often far more important than money.