Philanthropy & Funding

The Promise of Effective Altruism

The effective altruism movement has the potential to create an aspirational anchor, which may change giving practices over time.

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The contemporary effective altruism movement seeks to transform philanthropy in two ways: 1) by directing philanthropy to the most important objectives, and 2) by ensuring that philanthropic dollars are spent as effectively as possible. Among the proponents are the UK’s Centre for Effective Altruism; the US charity rating organization, GiveWell; and Eric Friedman, in a recent book, Reinventing Philanthropy: A Framework for More Effective Giving. But both aims of effective altruism face significant barriers.

The father of effective altruism is the utilitarian philosopher Peter Singer, who argues that people should give away everything that they don’t spend on necessities to help the world’s neediest. He acknowledges in his book The Life You Can Save: Acting Now to End World Poverty that this would call for drastic changes in Americans’ lifestyles, writing: “Over many years of talking and writing about this subject, I have found that for some people striving for a high moral standard pushes them in the right direction. … [But] asking people to give more than almost anyone else gives risks turning them off. … To avoid that danger, we should advocate a level of giving that will lead to a positive response.”

While few people are likely to radically restructure their entire budgets, many of us have an explicit or tacit budget for charity. A less demanding and possibly more realistic version of effective altruism would be to devote one’s charitable budget to providing for the basic needs of the world’s poorest.

Even in this limited domain, a donor might have a philosophical argument with Singer about the value of, say, the arts or education—even when weighed against basic needs. But Singer’s argument might nonetheless lead the donor to reconsider her overall charitable portfolio and perhaps recognize that some giving, even though blessed by an IRS tax deduction, is not philanthropic in spirit. For example, as Rob Reich pointed out in his recent New York Times article “Not Very Giving,” it is hard to justify a contribution to one’s own children’s elementary or secondary schools as charitable. And donors might take a skeptical look at giving that is motivated largely by vanity or reciprocity, with little regard to how it actually improves society.

As a modest step, donors might reserve a small portion of their charitable budgets for such projects but devote the lion’s share to organizations that have the potential for real social impact. If the effective altruism movement moves even a few high-net-worth donors in this direction, it could have a positive effect on their peers’ giving for the benefit of the world’s poor.

What about the second strain of effective altruism—effectiveness? Its proponents apply a benefit-cost analysis to charitable giving so that every philanthropic dollar will likely make the greatest possible difference in improving the lives of the poor. This is how GiveWell’s website assesses charities. And it is the approach of the Robin Hood Foundation, which fights poverty in New York.

Effectiveness would seem a sound criterion for a philanthropist seeking to achieve outcomes in any area. Yet it faces significant barriers as well. For one thing, the in-depth analysis that GiveWell and Robin Hood do is costly. Many donors are unwilling to pay for such administrative costs when they can give funds directly to beneficiaries, even though the research may pay for itself many times over by directing philanthropic dollars to high-performing organizations. More fundamentally and sadly, the vast majority of donors aren’t interested in doing any research before making a charitable contribution. Many seem satisfied with the warm glow that comes from giving; indeed, too much analysis may even reduce the charitable impulse. At the same time, efforts to motivate and teach donors (including the large majority of the 90,000 foundations in the United States) to consider the effectiveness of their philanthropy, whatever their goals may be, have not met with resounding success.

All things considered, my unsolicited advice to proponents of effective altruism is to stay the course. While not many donors may embrace even a limited version of Peter Singer’s prescription, the movement has the potential to create an aspirational anchor, which may change giving practices over time. And if GiveWell can broaden the scope of its recommendations and if other charity evaluators like Charity Navigator 3.0 continue to move in the direction of reporting on results, they will bring evidence of impact to the doors of donors who are unwilling to step outside and search for it for themselves.

Video: Paul Brest talks about why it is important for donors to fund general operating costs and overhead.

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  • In his recommendation to “stay the course”, the author doesn’t recognize that donating a significant portion of one’s time and money to altruism is central to the idea of effective altruism.  While effectiveness is important, it’s not a unique prescription.  On the other hand, no one else is proposing such a radical approach to altruism.  Once people have devoted their lives to altruism, a logical next step is to ask how they can improve their efforts.  The original effective altruists like Peter Singer were visionaries, and I hope we can stay that course.

  • Rachael Barrett's avatar

    BY Rachael Barrett

    ON October 29, 2013 07:16 AM

    There are some distinct differences between the Robin Hood approach and Givewell’s, I think; if we agree that both engage in a try at effective altruism, that even in that there are nuances; which in the long run matter.

    Robin Hood is primarily concerned with improving the life and well being of one person (at a time) and the means to do that is traditional charity work. So they will fund, say, eviction prevention work, but their funding model is not concerned with changing the underlying conditions that contribute to why someone is on the verge of being evicted. Nor do they engage in long-term analysis of what happens to folks whose eviction has been prevented. They like to see process outcomes, not real impact. In this regard, it does not promote innovation in the sector; hence folks will continue to be at risk of eviction while the underlying pieces which contribute to this are unchanged.

    Givewell, I believe, wants to challenge nonprofits to think. Early on, they were investing in workforce development programs. Because they did their research, they knew that the issue was not so much getting people into jobs, but helping them stay in jobs and move up the ladder/lattices. They asked the question, what are you (nonprofit) doing to help and how do you know it is helping? It is the second part of the question that should humble any nonprofit worker. How can I be certain that it is my intervention that is helping? Asking that question and then doing the leg work to answer it (long term follow up with clients and control groups or some formal type of evaluation) costs money and time. But, are we really doing any good if we keep doing the same thing and getting only marginally okay results? Givewell privileges those nonprofits with the self awareness to recognize that they need to do things differently if the change we all talk about is going to happen.

    And, I guess that is the difference I find valuable. Keep the nonprofits on their toes so that they can be clear about the claims they make on behalf of their programming. The Robin Hood counting method does little to keep nonprofits on their toes in a very deep way. Whereas Givewell puts the nonprofits on notice to raise the bar. In the long run, Givewell is creating an ecosystem of nonprofits doing good; Robin Hood is funding an ecosystem of just doing okay. Where do you want your money to go?

  • Rachael Barrett makes some great points. The only counterpoint I’d make (and it’s something that GiveWell is exploring via its offshoot GiveWell Labs) is that for some problems, interventions may appear to help little in the short term but if sustained over time they can lead to change.

    GiveWell’s approach to date has been very effective at identifying charities whose interventions are effective today. Some would argue that this centers the focus on addressing immediate symptoms rather than the underlying “disease.” But some problems may require decades of sustained intervention before they produce measurable and clearly attributable results. Does that mean they’re not worth supporting?

    If all charity evaluators were to focus on near-term effectiveness, it could cause more charities to shift their focus away from attacking long-term issues. GiveWell is aware of this and is exploring ways to evaluate effectiveness of charities that work on longer-term or harder-to-evaluate issues. A good example is adaptation to climate change: charities working to build the resilience of developing countries to climate change may not know if their interventions were truly effective until many decades from now. But if those interventions prove successful, they could save millions of lives. It’s a hard balancing act, I think.

  • BY Daniel F. Bassill

    ON October 29, 2013 02:54 PM

    With the Internet we have the ability to aggregate and visualize massive amounts of data about any social, health or environmental issue facing the world. With MOOCs (Massive Open Online Courses), on-line communities, web sites like SSIR, etc. we also have the ability to bring people together who care about the same causes.

    Many people are beginning to visualize data. That means geographic maps can begin to be used to show where the same problem is located in different parts of the world.  It also means that leaders and community organizers can use network analysis and GIS maps to help them understand who they are connecting with, who is helping, and where the help is landing.

    With this aggregated information we have the potential to educate and engage the donor, volunteer and beneficiary as well as the program leaders. When Dan Pallotta talks about “advertising” I envision this as money spent to educate “those who can help” and to create weekly events, like Halloween Sales, that motivate donors and volunteers to look look at a graphic, and pick what cause they want to support, then look at a map and pick what place they want to help. Once they pick a cause and a zip code they then should be able to look at icons on the map showing what organizations, if any, operate in those places.  At that point the organization’s web site should become the proposal and the grant request, showing what they are doing, why, how long, how well, what they need, etc. and an educated donor should be able to use this to decide how, and how much, they want to help.

    Once maps are used it will quickly become apparent that in many places where help is needed there are few choices of who to support. Some may be great programs and some may need a lot of help to become great.  If the place you choose to help only has programs that need to be helped, your only choice is to a) help them; or b) start a new program that can do the work better.

    If we’ve done a good job of educating donors to understand that complex problems take a long time to solve, and that growing from good to great is only the beginning of the process, staying great should be the goal. That means consistent donations of time, talent, dollars will be needed from many people for many years and to many places.

    If we ever reach the point where educated volunteers and donors are proactively reaching out to support organizations doing work they want to see done, we may lower the operating costs of philanthropy because we’ve lowered the costs of finding operating resources and perhaps found a way to keep key leaders involved longer.

    A starting point will be that some philanthropists provide dollars for more data collection and visualization, more story telling, more facilitation, and the creation of attention getting events (other than disasters) which motivate donors to give. 

  • Paul Brest's avatar

    BY Paul Brest

    ON October 30, 2013 11:33 AM

    I don’t see the distinction between Givewell and Robin Hood that Rachel Barrett makes. On the positive side, both do rigorous cost-benefit analyses. You can see Givewell’s methodology online. For Robin Hood, see Michael Weinstein’s and Ralph Bradburd’s recent book, The Robin Hood Rules for Smart Giving. While this approach is extremely valuable, both organizations have the limitation that they address only programs that deliver services to the poor rather than strategies to change systems or policies that could affect the underlying conditions of poverty. To do this requires moving beyond cost-benefit analysis to estimating the expected return of complex strategies where outcomes must be discounted by the (often high) likelihood of failure. Without buying into an over-simplistic distinction between addressing symptoms and root causes, it would be wonderful if both organizations focused more on systemic strategies.

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