Ben Hoskin

Should you only donate to one charity?

When donating, we have the option of giving all our donation to a single charity, or smaller amounts to multiple charities. We sometimes have an intuition that we should divide up our donations. If 

 are all good charities, don't they all deserve my support? But there is a strong argument that, if you're interested in doing the most good, you should donate it all to one charity with plenty of room for more funding.

Suppose you donate $100 to SCI. By doing so, you're saying that SCI is the best use of $100. Now suppose you donate another $100 to AMF instead. By doing this, you're saying that AMF is a better charity to donate to. This can only be true if your past donation to SCI was a mistake (and therefore you should have given all $200 to SCI) or the $100 you gave to SCI fulfilled all their need for funding.

But SCI has lots of room for more funding, so unless you're donating millions of dollars, you're unlikely to have changed which charity was the best. So either your second donation should have gone to SCI, or the first should have gone to AMF. Either way, all your money should be going to the same place.

There might be some good reasons to donate to multiple charities, for example if you're a millionaire and can overwhelm an organization's room for more funding, or if you get new information and change your mind on which organization is the best. But there also are some reasons that aren't up to snuff.

Bad Reason #1: We don't know exactly which is better.

True, our knowledge is never 100%, but we have to choose somehow. Your donation to AMF simply means that, 

given what you know, taking into account our 

 for different outcomes, to the best of our judgement, as far as we can tell,

 AMF is the most cost-effective charity for your first $100. And that means it's probably still the best charity (as far as our evidence shows, in our best judgement, as far as we can tell) for your second $100.

If you have two charities, one is going to be a better place for your money than the other. If you split between them, you have a 100% chance of picking the winner, but you also have an 100% chance of picking the loser. Think of it like two lottery tickets - one that wins 60% of the time and one that wins 50% of the time. While it's true that the first ticket might lose and the second one might win, it's less likely. Therefore you should put your money only into the first ticket. Likewise, you should only put your money into the charity you think has the highest chance of being best.

Bad Reason #2: Just like I diversify my stock portfolio to reduce risk, I should diversify my donation portfolio.

It is important that we try many different approaches to solving poverty, hunger, and other global problems. After all, some might fail while others work better than expected - by having a variety of charities, we reduce our risk. Because of this, you should take into account how much each charity aids the global diversification effort when judging its effectiveness, and 

give all your donation to the charity you think is currently most underfunded

. Because it's the charities we want to be diversified, rather than your individual donations, the argument still applies: give all your 10% to the best charity - which might be best because it contributes most to the diversification of the global charity portfolio.

We diversify our financial portfolios because we care about the risk to ourselves, not just to the global economic system. With charities, we instead fundamentally care about the people we're helping, and reducing the risk to them. Donating to just one charity might increase the risk that my donation is less effective but reduce the risk to the beneficiary, it insured them against a tail risk. As we are donating to help people, rather than for self-gratification, this is a worthwhile tradeoff.

Alternatively, think about the size of your efforts compared to the overall problem. With your portfolio, you buy Google or Microsoft to work on the 'not having any tech stocks in your portfolio' problem. You buy enough stock to completely solve the 'being underexposed to tech' problem - so the rest of your investment can go into other stocks. With AMF, however, your donation is unlikely to solve the 'SCI doesn't have enough funding' problem - so further donations should still go to SCI.

Bad Reason #3: This is unfair to big charities.

You might think this means we should always donate to small charities, because donations make more difference to them. But the important thing isn't the percentage increase in charity revenues, but how much good the extra funding does; if a big charity is more cost-effective than small ones, we should donate to the big one. Larger charities might have more trouble with fungibility though.

Bad Reason #4: But I want to show my support to all the charities I like.

If you really liked a certain charity, presumably that means you believe in its mission and want that mission to succeed. But if you believe in its mission, you should want to donate to a charity not because you want to be nice to the charity, but because you want the mission to be accomplished. Therefore, you should give to whatever one organization you think best accomplishes that mission.

Bad Reason #5: If everyone did this, one charity would have all the funding in the world and every other charity would have nothing.

This wouldn't happen because it's impossible to get everyone to coordinate that well. Secondly, even if everyone in the world were on board with Giving What We Can, people would still take into account room for more funding. A general strategy of "everyone donates to the charity that does the most good" would lead to different people donating to different charities; people would donate to SCI until it no longer had room for more funding, and then the next people would donate to AMF until it no longer had room for more funding, then the next people to Deworm the World, and so on.

Bad Reason #6: I care about multiple issues! I want to end disease so I give to an anti-disease charity, I want to end crime so I give to an anti-crime charity, and I want to end poverty so I give to an anti-poverty charity.

Yes, we have many different values. But at any given time, one of these will be the most pressing; one of them will be easiest to make headway on. And that's the one we should concentrate on. By focusing all our resources on one cause, we have the greatest chance of accomplishing our cause.

Decision Making under Uncertainty

Sadly, there are no certainties in life. In charity research, as in other decisions, we have to deal with the fact that we can only ever have 'probabilistic' knowledge: there is always some chance we might be wrong. Indeed, the available information on intervention cost-effectiveness leaves us with considerable uncertainty about the true figures.

A naive way of dealing with this would be to simply work out what the most likely outcome is, and focus on that. So if we think a drug will probably save a life, we count the drug as saving a life. If it probably won't, we consider it as not saving a life.

However, this is clearly a dangerous approach. My house probably won't burn down this year - but I still buy house insurance. I probably won't be hit by a car as I hit the road - but I should still check for cars. When the stakes are high enough, we definitely need to take into account low-probability events.

On the other hand we shouldn't simply fixate on the best or worst scenarios. We take reasonable precautions against being involved in a car accident - but we still cross the road. Instead, we need to take into account both the severity of the consequences of a possible outcome, and the likelihood of that consequence.

The mathematical procedure for doing this is using 

. We multiply the probability of each outcome by its magnitude, add them together, and produce an expected value.

Expected Value = (Probability of outcome 1)

(Magnitude of outcome 1) + (Probability of outcome 2)

(Magnitude of outcome 2) + ... + (Probability of outcome n)*(Magnitude of outcome n)

This approach has many advantages; those interested in the mathematics should see the Wikipedia articles on 

The Expected Value approach requires we be able to assign probabilities to each of the possible outcomes. But this can be very hard, or even seem impossible - how can we assign a probability to something that only occurs once, like the Duke of Wellington winning at Waterloo?

We deal with this by treating probabilities as 

. A probability doesn't express something objective about the world like frequencies or propensities. Instead, it expresses a mental fact about our confidence in a proposition; a probability of 1 means utter certainty, and a probability of 0 means utter disbelief.

In practice we never have the infinite amounts of evidence requires to achieve total certainty - our probabilities lie between 0 and 1. And this is exactly why we need to use expected values.

In some cases it's easy to assign a credence - if half the population is female, we can happily assign a 50% probability to a randomly chosen person being female. Some cases are more difficult - how can we put a probability on the Democrats winning the next US presidential election?

However, while this is hard, we just don't have a choice. We have to make decisions, and if we don't use probabilities - or something equivalent - we run the risk of behaving 

. Our actions will always imply credences, even if we don't consciously hold them. While gut instinct works well for familiar everyday decisions about our local environment, or decisions that don't have big consequences, humans don't generally have well-trained intuitions for the effectiveness of different approaches. Using credences on the other hand and embracing the uncertainty that they make explicit, offers us the best chance to help the most people.

Ben Hoskin

Articles

Should you only donate to one charity?

Decision Making under Uncertainty