Before you decide on a new smartphone or book a trip (#aftercoronadreams), you probably read through numerous reviews to make the best decision for you and your wallet.
In most areas of our lives, we have long since internalized that facts beat assumptions. Especially when we make decisions about what we should best spend our money on.
But does the same actually apply to donations to charities? In the sheer flood of NGOs - in 2019 there were over 23,000 foundations (the main form of founding charitable organizations) in Germany alone - it's easy to get lost. So, how do we make the right decision for us about which organization our donation should go to? We have the answer.
Spoiler: It's all about effectiveness.
And it is precisely with this line of thought that we delve deeper into the subject of charity – right down to the core question: Why do people decide to donate to charity in the first place and what does donating do to us?
Why we donate
Studies show that donating is essentially a social act.
We choose donation causes based on our personal experiences, or based on friends who are raising money for a particular organization/have already donated to a particular cause. For example, a study from the University of San Diego shows that people donate significantly more to their university if their former roommate asks them to than if a complete stranger does so. And it's not just our friends and family who influence us. According to the online donation platform JustGiving, we are highly likely to increase our own donation if we see that another donor has given more before us.
We are also drawn to projects that require immediate help, even if it only affects a small number of people. Malaria kills far more people than natural disasters such as earthquakes. But because the disease persists but does not make the news as often, malaria relief organizations do not trigger the same emotional urgency as natural disasters.
We can therefore say that when choosing our donation purposes, we are in most cases guided by our social environment and by things that concern us, inspire us or affect us personally.
But there is another reason why people donate: the so-called 'warm glow effect'.
The Warm Glow Theory
In the late 1980s, economist James Andreoni argued that internal motivations for our giving behavior are much more important than previously recognized. He came up with a name for his thesis - the 'Warm Glow Theory' - which has stuck to this day.
According to the Warm Glow perspective of philanthropy, people don't donate money to cure cancer. Instead, they donate to feel the 'inner warmth' that comes with being the kind of person who helps cure cancer.
In a study, psychologists at the University of Sussex were able to scientifically prove Andreoni's 'Warm Glow'. Their research results are based on the analysis of existing studies that showed the brain scans of several thousand people during donation decisions.
For the first time, the research team distinguished during the analysis between what was happening in the brains of people who acted out of pure altruism, i.e. when there was absolutely nothing in it for them - and those who acted out of 'strategic goodness', when there was an opportunity to get something out of it for themselves.
In short, they distinguished between two groups: one that acted without expecting anything in return and the other that took a primarily opportunistic approach to giving.
The scientists from Sussex found that the brain's reward center was more activated (i.e., consumed more oxygen) when people acted out of 'strategic kindness' than out of pure altruism.
However, they also found that altruistic acts without the hope of personal benefit also activated the brain's reward center. Some brain regions were even more activated during altruistic acts than during actions motivated by 'strategic goodness'. The results show that there is definitely something special about situations in which our only motivation is to help others and thereby feel good.
Should we donate “better”?
Short recap : What motivates us to donate is not only social actions and personal experiences, but also the scientifically proven 'warm glow'. That is, the good feeling that comes with perceiving ourselves as good people. The 'warm glow' is fundamentally different from classic altruism, where we help others without expecting anything in return.
So how does this affect our giving behavior? In this way: Factors like the 'warm glow' can distract us from giving to the charities that need it most.
For example, relatively little is donated to environmental and nature conservation, although the Germans consider this issue to be a top priority. According to Statista, only around 3.5 percent of total donations go to environmental projects each year.
According to One Earth – One Ocean, one of our German Giveback partners, water pollution is progressing so rapidly that the world’s oceans will be completely littered in just a few years.
Accordingly, donations to marine conservation should be much higher – because the fact is that the state of our oceans affects all life on earth.
In general, we need to try to find ways to optimize our giving behavior to have the greatest impact. And that ultimately brings us to effective altruism.
Effective altruism
The term 'effective altruism', coined by William MacAskill, a professor at the University of Oxford, deals with the question of how we can do as much good as possible with the limited resources available to us. Effective altruism is understood both as a philosophy and as a social movement.
Altruism means having a desire to help people. When you add the component of effectiveness, the idea takes on a much more complex form - it's about doing something well.
MacAskill gives a simple example:
"Imagine you could either save five people from drowning or save just one person. It's a tragic choice and you can't save both. So instead of saving one life, you choose to save five lives because there are five times as many interests at stake."
In the same way, if you donate money to one charity, you may be able to save one life. However, if you give the same amount to another organization, it may mean you can save hundreds of lives.
When we decide whether or not to support a charity, we should focus on the following characteristics based on the principles of effective altruism:
- Size – how many lives are affected?
- Degree of neglect – how many resources have already been spent on this purpose?
- Solvability – would additional resources solve the problem once and for all?
Let us once again take our partner One Earth – One Ocean, which is committed to cleaning the waters of (plastic) waste.
The pollution of the oceans affects us all. Due to this - according to the UN Environmental Programme, there are currently around 150 million tonnes of plastic in our waters - not only are numerous marine animals dying, but microplastics are also getting into the water. This is then absorbed by humans via the food chain. The effect that plastic has on us has not yet been fully researched.
With “traditional” methods of collecting garbage from the oceans, we have not yet managed to contain the plastic problem (degree of neglect).
One Earth – One Ocean has therefore developed and tested a concept for collecting and recycling plastic waste from the waters with the maritime waste collection service. Special waste collection ships collect the plastic waste, which is then returned to the material cycle (solvability).
It’s the kind of innovative thinking that effective altruists aim for.
Another practicalpal.net Giveback partner whose mission and actions are consistent with effective altruism is Viva con Agua.
The vision of Viva con Agua is "Water for all - all for water!" - they are committed to ensuring that all people worldwide have access to clean drinking water, hygiene facilities and basic sanitation. The scale of the problem is enormous - according to Viva con Agua, 2.2 billion people worldwide do not have guaranteed access to clean drinking water.
Choose a good cause
Through the practicalpal.net Giveback, social commitment is at the core of our business model.
We want to make it as easy as possible for you to do good. That means we need to make sure that all the organizations our customers can choose to give back to are transparent and, above all, effective.
Many of our customers suggest charities they care about, and we research all of our NGOs before adding them to our Giveback program. Once a year, we calculate the annual Giveback to find out exactly what impact your unclaimed contributions have.
English websites such as GiveWell can help you find the most effective organizations, i.e. those with the greatest impact. For German-speaking countries, there is the aid organization wirksam-spenden.org, which translates parts of GiveWell's recommendations and offers donation advice based on the criteria of effective altruism.
And what was that again about the donation seals?
The fact that there are not (yet) enough websites like Give Well for the German-speaking world makes it more difficult to make a fact-based decision when choosing an NGO that you would like to support. For this reason, many of us rely on donation seals. These can indeed provide some indication of the reliability of the respective organization. However, they should not be used as the sole basis for decision-making.
The best-known German seal, the DZI donation seal, covers many important criteria that an NGO should fulfill. For example, only organizations that can guarantee targeted and economical use of donations are listed. However, the impact achieved by the respective charity is not checked by the DZI itself. In addition, smaller NGOs can rarely afford the (expensive) seal and are therefore excluded from the evaluation.
Another example is the Phineo Impact Seal, which evaluates the impact potential of a charitable organization. Unfortunately, the seal is mainly limited to German organizations/projects within Germany.
Effective altruism, however, assumes that one euro can have a much greater impact in poor countries than one euro in a "rich" country like Germany. Effective altruists therefore recommend donating more to developing countries than to charitable countries, even if they carry the Phineo seal.
For these reasons, as already indicated above, the seals should not serve as the only criteria for selecting donations.
Heart over head
In a world where so many people need help, it is becoming increasingly difficult to decide how and to whom we should donate our resources of time and money.
Our hearts drive us far more than our heads. It may not always be the best thing for us, but it is what most of us live by. However, by choosing a cause with a proven track record and proven solutions, you can make a huge difference.