Most charities are not cost-effective - here's how to find the ones which are
It's hard to know where to donate when you're giving to charity, however this chart may be helpful.
I was inspired to put this chart together after I read that the same sum of money could fund either (a) the training of one guide dog for a blind person in the developed world, or (b) around 1,000-2,000 operations to cure blindness. It's an uncomfortable fact - should we take that to its logical conclusion and stop funding (e.g.) the Guide Dogs for the Blind Association in the UK? But I *like* guide dogs, and more importantly blind people I have known have really valued their guide dogs - surely we wouldn't want everyone to stop funding such fine work?
But if you are going to make choices about who to donate to, then some will be chosen, and some will not. There will be winners and losers - that's the way that deciding works. And on balance, I would prefer more money to go to charities that do more good than those that do less good.
This stat got me thinking, how many more examples are there like this? So I went through the annual reports and accounts of lots of (mostly UK-based) charities, and created this chart.
Each point on this chart represents one charity. The horizontal axis is the cost, and the vertical axis is an assessment of the impactfulness of the charity (or at least my best estimate at its impact). A point in the bottom right corner (where the yellow dots are) is expensive and doesn't impact beneficiaries' lives as much as those higher up. A point in the top left corner (the blue corner) is cheap and highly impactful.
Some observations:
- As you can see, the dots are fairly even spread across the chart. In an ideal world, you would expect that they would be concentrated towards a straight line (see hypothetical chart below). This may happen if (for example) people setting up charities first researched whether there were other interventions that could help people better than the charity they are setting up.
- Notice the scale on the horizontal axis (for any of the charts). The range of costs was so wide that I had to use a log scale; some interventions cost less than £1, several cost tens of pounds / hundreds of pounds / thousands of pounds, and some cost tens of thousands of pounds
So what's the bottom line?
If you've been supporting a charity in the bottom right corner - one of the yellow charities in the chart, or even one of the red ones in the middle band - your money has achieved only a little bit of good. If you've supported a charity in the top left - a blue one - then well done, you've had a huge bang for your buck.
Should this change the way that you give to charity?
Which would you rather have: a 2-week all-inclusive holiday in Barbados or a fairly decent-tasting, nutritious meal? All other things being equal, I would choose the holiday. If it then transpired that one cost £1,000 and the other cost £5, you would probably consider this quite important information - information that you should know before you make the decision to buy. (Admittedly part of the reason you would want to know this might be because of budget considerations, but also because of value for money.) And if you found out that the holiday was £5 and the meal was £1,000, you would probably find it quite easy to decide between them.
What the chart tells us is that the equivalent of this sort of comparison does exist among the charitable giving options. So when considering donating to charity that does direct work with beneficiaries, please do ask them how much their work costs per beneficiary. (obviously this doesn't work so well with charities that don't work directly with beneficiaries, such as research or campaigning charities)
This can be a useful alternative to asking the amount spent on overheads. It's question that seems reasonable at first glance, but on closer analysis this whole topic is an unhelpful distraction, as you can see here, (or indeed click on any of these dots ..........) And similarly for the chief exec's salary, which is typically immaterial. It is not the full story on how to choose a charity to donate to, of course, but it is often a good start.
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More on how this chart was produced
- I gave each intervention a score from 1 to 5, where 1 indicates a minimally impactful intervention, and 5 is highly, life-alteringly impactful. Much as this was intended to be as objective as possible, inevitably some subjectivity creeps into this sort of assessment.
- This is only expected to be a crude assessment, based on a qualitative description of the intervention. Necessarily it's based to a material extent on my impressions having read about the charity's work, and not on rigorous science.
- When assessing impactfulness, I also take into account any dilution effect, i.e. if an intervention can (perhaps cheaply) reach lots of people, but only a small proportion of the beneficiaries reached will actually benefit, this is taken into account
- Note that this is only meant to provide an opinion crude enough to enable a A/B/C grading - more detailed analysis would be needed to say anything more precise
- I stayed clear of charities that focus on activities like research and campaigning, which don't lend themselves so well to this sort of analysis
- The A/B/C grading is again notional - there is no canonical point at which we can say that this is the "right" place to draw the line between an A grade charity and a B grade charity, the intention is instead to help illustrate the concepts
Full list of charities included in this chart. They are mostly UK-based charities, with some from outside of the UK.
| Project healthy children |
| RSPCA |
| Against Malaria Foundation |
| Sightsavers/Royal Commonwealth Society for the Blind |
| Fred Hollows Foundation |
| Samaritans |
| Care |
| WaterAid |
| Solar Aid |
| Concern Worldwide |
| World Vision |
| Teach A Man to fish |
| Save the Children |
| Educaid |
| British Shalom-Salaam Trust |
| Womankind |
| Oxfam |
| Pump Aid |
| Storybook Dads |
| PDSA (People's Dispensary for Sick Animals) |
| Basic Needs |
| Straight talking |
| Womankind |
| Medicinema |
| Salvation Army |
| War child UK |
| NSPCC - childline |
| Midwest food bank |
| Forty Hall Community Vineyard |
| Strong Minds |
| Child bereavement UK |
| Dogs Trust |
| Women for women international UK |
| Mind |
| Plan |
| Mind |
| Give Directly |
| Sport 4 life UK |
| NSPCC (National Society for the Prevention of Cruelty to Children) |
| The Horse Course |
| Donkey Sanctuary |
| Smile train |
| Fistula Foundation |
| DUY-DER |
| Barnardos |
| Great Ormond Street Hospital Childrens Charity |
| Royal National Institute of Blind People (RNIB) |
| The National Trust for places of historic interest or natural beauty |
| Centrepoint |
| Grief encounter |
| Battersea dogs and cats home |
| Marie Curie Cancer care |
| Spark inside |
| Royal British Legion |
| Royal National Lifeboat Institution (RNLI) |
| Make a wish UK |
| Switchback |
| Red Cross |
| Help for Heroes |
| Guide dogs for the blind association |
| Halo Trust |
| MAG |
| Crisis |
| Schistosomiasis Control Initiative |
| Royal Opera House Covent Garden |
| Alzheimer's Society |
| English National Opera |
| St Mungo's |
| Cruse |
| Send a Cow |
| Bees for Development |