Doing Good Better Summary

Do our good intentions always lead to the best outcomes? "Doing Good Better" challenges us to rethink charity and maximize real impact.

1. Prioritize Impact with a Simple Formula

Our charitable efforts should focus on where they can create the most benefit. To do this, we need to calculate how many people a cause helps and by how much it helps them.

Many charities capture attention without necessarily being effective. For example, during the Rwandan genocide, Dr. James Orbinski with the Red Cross had to make tough decisions. He organized his patients into three categories based on urgency. This system, although painful, saved the most lives by using his limited resources efficiently.

Highly impactful decisions can also be made using the concept of "expected value." By weighing an outcome's value against its probability, we ensure resources stretch as far as possible. For instance, a donation with a 50% chance of saving 3,000 lives may be better than one with a 100% chance of housing 10 families.

Ignoring expected value can lead to tragedies. At the Fukushima Power Plant, planners dismissed the low probability of disaster, overlooking the massive potential impact. This error contributed to a catastrophe with 1,600 lives lost.

Examples

• Dr. James Orbinski prioritizing patients to save the most lives in crisis zones.
• Calculating the expected value of donations to assess impact.
• Misjudgments at Fukushima that could have been prevented through proper risk assessment.

2. Avoid Overfunded Causes

Supporting overfunded charities limits the impact of your donation. The law of diminishing returns shows that additional resources have less effect when a cause is already well-funded.

For example, disaster relief often gathers tremendous donations. After Japan's 2011 earthquake, aid organizations received $330,000 per victim, but much of that money went unused or was less effective in averting further harm.

Conversely, poverty-related causes often struggle for funding. Efforts to combat malaria, which claim thousands of lives annually, receive far less support. A hundred-dollar donation to prevent malaria can save lives, whereas the same amount directed toward an overfunded disaster relief fund adds little value.

Choosing wisely means redirecting resources to neglected areas where funds can make a transformative change.

Examples

• Overfunding in Japan's earthquake relief with $330,000 allocated per death.
• Contrast with poverty-related causes receiving only $15,000 per life lost.
• Supporting malaria prevention creates far-reaching benefits with every donated dollar.

3. Focus on Counterfactual Impact

The true worth of your charitable actions depends on asking, “What would happen otherwise?” This lens ensures we assess what difference our actions create in comparison to alternatives.

An example involves volunteering in Africa to build schools. While this feels meaningful, many volunteers lack construction skills. A local builder, funded by your donation, could do the same job while strengthening the local economy.

Another perspective emerges in emergency aid. If you push aside a trained paramedic to perform first aid, your intervention may do more harm than good. The real measure of impact considers whether alternatives could have achieved more effective outcomes.

This principle reminds us that choosing a charity or action requires considering its unique significance over other options.

Examples

• Volunteers without construction skills overshadowing locals in developing areas.
• Acting instead of trained professionals reducing impact in emergencies.
• Local builders creating schools efficiently while stimulating economies.

4. Career Choice: Earning to Give

Working directly with an NGO may seem noble, but earning a high salary in another field and donating can often create greater impact.

For example, as a doctor, choosing a specialization in oncology could lead to higher earnings and allow you to support many charities financially. If someone else takes the NGO position, but wouldn’t donate, the world benefits more from your earnings as an oncologist.

Choosing a career based on fit, rather than passion, also promotes sustainable giving. A lucrative, stable job ensures you can support the causes you care about over the long term.

Well-directed financial contributions from high-income earners can often have the largest positive results, even if they are not working on the ground.

Examples

• A doctor choosing oncology and supporting effective charities over NGO work.
• High-income professionals donating substantial amounts to impactful charities.
• “Personal fit” over passion ensuring steady, lifelong contributions.

5. Resist Judging Charities by Overhead Costs

Many people believe charities with low administrative costs are better, but this metric doesn't reflect their true value.

Take Development Media International, which spends 44% on overhead. Critics might overlook its $1.5 million media campaign that effectively teaches hygiene in developing nations, saving countless lives by preventing diarrheal diseases.

By contrast, a charity with minimal overhead but poor impact – such as delivering non-essential goods – could squander resources. It's not the percentage spent on salaries or operations that matters, but how the charity drives real change.

Focus on measurable outcomes instead of simplistic metrics when evaluating charities.

Examples

• Development Media International saving lives through health campaigns despite high overhead.
• A charity managing luxury deliveries, wasting resources on unnecessary goods.
• Misguided focus on overhead ratings by platforms like Charity Navigator.

6. Sweatshops: A Complex Alternative

Sweatshops might seem intrinsically wrong, but for some, they offer better opportunities than their alternatives.

In countries like Bolivia, many workers leave low-paying, arduous farm jobs for comparatively higher wages in sweatshops abroad. Factory work, however tiring, often pays more than backbreaking agricultural labor.

Fairtrade products sound ethical but rarely benefit the most impoverished countries. High participation standards often exclude nations like Ethiopia, concentrating benefits in wealthier areas such as Costa Rica or Mexico.

Charity begins with understanding real-world choices and unintended consequences.

Examples

• Bolivians earning $2,000 annually in Brazilian sweatshops, compared to $600 farming.
• Poorer nations excluded from Fairtrade participation.
• Most of Fairtrade’s premium costs never reaching producers directly.

7. Evaluate Actual Programs, Not Perceptions

What an organization does is more important than how it looks on paper. Avoid being swayed by promotional efforts and instead analyze the charity's real impact.

For example, a flashy social media campaign might disguise inefficiencies or irrelevant efforts. In contrast, a lesser-known initiative addressing clean water or malaria prevention could save countless lives.

Seek evidence-backed causes, avoiding decisions based purely on emotional stories or high budgets.

Examples

• Gravity Water providing clean water access alongside measurable benefits.
• Charities funneling money toward public relations rather than impactful services.
• Donating based on track records versus emotional appeals or viral campaigns.

8. Act Rationally with Donations

Give with purpose by considering the scope and depth of your contribution. Instead of sporadic decisions, develop a donation system that reflects long-term goals.

Monthly donations simplify this process. For instance, giving 10% of a consistent income strategically to effective organizations helps ensure maximum benefit.

Critical thinking and consistency make your contributions powerful, creating real progress rather than short-lived goodwill.

Examples

• Monthly plans ensuring consistent support to trusted charities.
• Encouraging sustainable giving over one-time emotional reactions.
• Choosing causes based on rational outcomes and measurable results.

9. Small Acts Can Have Broad Effects

Even seemingly small acts, like deliberate purchases or supporting specific industries, can shape lives and future opportunities positively.

Consider daily decisions: buying sustainable products, funding education scholarships, or backing microfinance loans empowers individuals worldwide. These small steps transform broad systems when scaled.

Daily choices hold the potential to ripple through global challenges, showing that consistent effort matters.

Examples

• Microloans helping small businesses lift families from poverty.
• Sustainable products leading to broader environmental impacts.
• Supporting educational access creating lifelong opportunities.

Takeaways

1. Calculate the impact of your donations through expected value and prioritize underfunded causes for better results.
2. Focus on measurable outcomes and counterfactuals when evaluating charitable actions or career paths.
3. Set up a habit of regular giving, such as donating a percentage of your income monthly to thoughtfully chosen charities.