The holidays are the giving season for charitable organizations, and if you are like us, your mailbox is overflowing with requests. We split up our charitable giving among causes that are close to us and ones that do good in the world at large.
One of the challenges we have is weighing the relative impact our dollars can have on causes that are distant and complex. There is no shortage of places that need help in the world, so where to focus?
A few years ago, the Danish government funded an effort to attempt to prioritize the goals within the United Nations 22 ‘core issue’ areas. They had a group of over 80 subject matter experts and economists – among them Nobel Laureates – under the name ‘Copenhagen Consensus’ to prioritize where $$$ can make the biggest difference in the world. They have done cost/benefit analyses of dozens of different targets on the UN’s development agenda:
LINK – https://www.copenhagenconsensus.com/sites/default/files/post2015brochure_m.pdf
Some of their findings are very interesting. Free trade across borders costs very little for countries to mutually adopt, but have enormous returns to raise people from poverty. Access to family planning, improving healthcare, expanding immunizations, and addressing malnutrition also pay huge returns. The impact of mnstrengthening energy efficiency, slowing climate change, and providing universal broadband coverage are relatively low.
The authors of the analysis are honest in acknowledging issues to which there aren’t good solutions. That doesn’t mean these aren’t worthwhile issues to solve, but that new ideas or science is needed before they should be prioritized above issues that have good, affordable solutions readily available. In their issue papers, they definitely ‘show their work’ in examining problems, costs, and effectiveness.
The last few years, we’ve used the Copenhagen Consensus rankings to help direct some of our holiday charitable giving to organizations that best address some of the world’s biggest issues. If you are facing the same questions, please give their website a look.
Have A Great Week!
MrFireStation 
Hard to donate any amount to any cause without at least a passing thought of exactly how it will be used, charity efficiency, etc. This helps. Thanks.
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Yeah – We’ve been using a Charity Navigator 4-star organization that targets malnourishment, immunizations, and education. Great to have all of this information available to us.
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Good post on giving back. Making sure the money is making a difference and being able to maximize the benefits is a worth while exercise.
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I hadn’t heard of the Post-2015 Consensus before your article, so the web site was an interesting read. One thing that I think is important to note, however, is that this is a primarily economic view of costs and benefits, i.e. how much ROI is achieved get for each dollar spent. What’s never clear to me (and I couldn’t find info on their site) is how they measure the social benefit of each dollar returned — after all, we’re not trying to maximize financial return with our charitable giving, we’re trying to maximize impact, whether that’s to people’s lives, the environment, etc. A dollar that goes into the pocket of a wealthy corporation (where perhaps some number of cents “trickle down” to workers and the poor) is very different than a dollar that directly provides immunizations, healthcare, business opportunity, etc. to those who need it.
For example, it’s clear that free trade is, by orders of magnitude, their #1 priority in terms of ROI — perhaps not a surprising conclusion coming from a consortium made up of economists. But who benefits most from free trade — the working class or investors (or a corrupt political class, as exists in many developing countries)? Certainly you can’t argue that every dollar returned by investments in free trade benefits those we traditionally intend to help via charitable giving.
Don’t get me wrong, I’m not arguing against free trade or questioning their ROI calculations — I certainly don’t have the credentials to do so. But, as a mathematician, I DO understand that if you want to maximize an outcome, you have to clearly define how that outcome is measured, and I’m not sure a dollar-based ROI calculation is the right measure. (Again — I’m not offering a solution, simply a bit of a critique.)
When we look for charitable causes, we look for ones where there is direct impact to those who need it and, where possible, provide sustainable solutions to the underlying problems (most preferably by helping the beneficiaries help themselves, e.g. education, micro-lending, agriculture, …).
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Good thoughts. My understanding is that the approach the problem on a economic ROI because that is consistent way to measure value across goals. In what I’ve read, they use frameworks similar to insurance models to ‘value’ the saving of human lives/health and improvements in economic productivity/safety. I’m not sure how you could effectively use time, health, or happiness or another alternative as an objective measure of value?
With respect to free trade, I would say I think it is clear the working class by far benefits the most from free trade. Over a billion people have been lifted from abject poverty over the last decade, largely by free market reforms in Communist China, as they opened their economy up. At no time in human history have we seen such prosperity created so quickly. Of course not every $ benefits only struggling families, but the alternative is a closed economy that benefits the (relatively) few friends of government.
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