I recently donated $10 to my child’s nature preschool to help them acquire two donkeys. It was a small gift, but I guess you could say I am an ass-et to their program.
Puns aside, I now regret this donation.
Before you start wondering what type of black heart I have for regretting a measly $10 donation that will benefit my child’s school, let me explain the opportunity cost of this transaction.
If I had donated my $10 more effectively, I could have prevented 1,000 people in third-world countries from developing an iodine deficiency for 1 year. Or I could have provided 4 Ugandans with vital health products and services.
Treat Charitable Decisions Like Investment Decisions
The landscape of worthy causes is vast and difficult to navigate.
Not only is it challenging to determine where our money will be used most effectively, it’s also near impossible to quantify the true reach of a donation.
Will an investment in research yield a cure? Will my gift to a non-profit be eaten by operating expenses?
But by treating altruism more like an investment decision, which faces similar uncertainty, rather than an impulse buy, like my donkey donation, it’s likely I can have a more meaningful impact on the world with the same amount of giving.
Resources for Maximizing Your Impact
After making the commitment to improve my altruism, I had to reset how I selected places to give. I found William MacAskill’s book Doing Good Better useful in remolding my philosophy of philanthropy. It’s an incredibly smart book that helped me set new priorities and better goals for giving.
I also found several websites that helped me evaluate and choose more worthy causes. A favorite of mine is GiveWell.org because it is easy to navigate and their evaluation criteria looks beyond financials and accomplishments, which don’t tell the full story of an organization’s impact.
Like everything that’s worthwhile, I’ve found effective giving just takes a little more thought, analysis, and work than I previously gave it. And in my case, an extra $10 donation to prevent iodine deficiency in third-world countries.
Adam Lucas holds a Finance degree and an MBA from the University of Kentucky. His work has appeared in many major outlets including AARP.org and GoBankingRates.com.