And how you can use the same techniques to save a stranger's life for under $600
It's a strange world we live in.
When I first heard of Optimal Philanthropy, it was in a news article about Bill Gates's plan for retirement. He'd decided to donate tens of billions of dollars to charity, but had decided that no existing charity was worth donating to.
Gates felt they weren't run properly.
You see, at the time most people thought that "efficient charities" were those that had little or no overhead. Everyone wanted as much money to go to the front lines as possible, with little or none for administration.
Gates didn't care about any of that.
No, what Gates wanted was measurable results... and if more administration would get better results, he was all for it.
In business, it all comes down to return on investment. How much money did you use (to rent buildings, buy supplies, hire employees), and how much money did you earn in return.
Gates felt that something similar was needed for charity.
If the charity saved lives, Gates reasoned, then it should be judged by how much money it used to save that life. If a charity could save twice as many lives on the same budget by using more administrators, they by all means they should do that.
As you may have heard, Bill Gates was appalled that he couldn't find a charity he could measure.
Here he was, trying to selflessly give away over ten billion dollars to any charity that could prove it would have the highest impact.... and finding a bunch of nonsense answers about how that's not the way charity works... or how little overhead there was.
And as you may have also heard, Mr. Gates turned that frustration into a revolution in the world of charity -- and inspired others to follow him. His foundation -- the Bill and Melinda Gates Foundation -- is now the biggest in the world, and makes a difference everyday in the areas of world education, malaria, and sustainable energy.
But Enough About All That! This Isn't About Bill Gates, This Is About You
Although the billionaires of the world have gotten their heads screwed on right about charity (and saving hundreds of millions more lives as a result), us non-billionaires didn't seem to get the memo.
And that means, if you are the sort of person who donates, you're not doing nearly the amount of good you could.
Here are 3 simple steps you can use right away that will at least double the impact your donations have.
Pause a second to think about what that would mean.
Why do you donate?
How would it feel to know that those donations now to twice as much good in this world? To know that at least twice as many people were helped?
Ready to hear the steps? Great!
Step 1: Make your reason for donating CONCRETE!
This step requires being very honest with yourself. It means not donating to the Haiti relief fund just because it was tragic (or because Bill Clinton said you should), but instead thinking about what that donation to Haiti would accomplish.
Something along the lines of: save lives and put good people back into homes. Whatever you hope your donation will accomplish.
What we're doing is moving from causes and goals (global warming, world peace, freedom from dictators), to concrete outcomes (reducing or negating carbon emissions, preventing wars, saving solders lives, educating people about the benefits of democracy).
Once you've got a concrete outcome you'd like to see in the world, it's time to find out the best way to accomplish that goal.
Step 2: Use 3rd party charity evaluations that focus on outcomes, and donate where it will do the most good.
Go to givewell.com and see if your current charity is listed, and what kinds of results they can get per donated dollar.
Also, don't forget to look at similar outcomes your donation money can accomplish. It's not uncommon to find out that, for example, the cost of giving a blind child a seeing eye dog is three times more than the cost of preventing childhood blindness in the first place.
Yes it might seem tragic to think of a little blind girl without a dog to guide her, but it's even worse to think that we'd give that girl a seeing eye dog at the expense of three other children going blind.
If nothing else, visit givewell.com, it will change the way you think about donating for the rest of your life.
Step 3: Donate what you can, but don't donate time unless you earn less than $10 an hour.
The strange truth of the matter is that, unless you're donating your time as a professional (Doctor's Without Borders, Pro-Bono Legal Aid), it's often more cost effective to simply work an extra hour and donate the money.
If you make $25/hr, your cause can probably can get 150 minutes of work for every hour of income you donate.
Okay! If you do those three steps you will get more good from your donation money than 90% of all the donors out there.
If you felt that this letter helped you, please consider forwarding it to your friends and family, or at least talking about these important issues with them.
Together, we can make a difference.