Effective Altruism (It’s Complicated)

For some time now, we have been interested in a movement in the nonprofit industry known as “effective altruism.” We wrote about the topic here on NonProfit PRO in a blog way back in 2015. Effective altruism began as a research field which uses evidence-based data to maximize the effect of charitable giving to achieve the best outcomes possible.

In recent years, effective altruism has given rise to a number of organizations, like Givewell.org, that provide information to supporters and potential donors about nonprofits’ effectiveness. The focus of effective altruism has typically been on directly improving the lives of individuals. One of the fundamental assumptions of effective altruism is that donors should value all human lives equally. This assumption has led some researchers to conclude that making donations to help people in the developing world is valued greater than making donations to help people in the developed world.

In our 2015 blog we wrote, “Effective altruism is a laudable concept. But it runs counter to how we experience philanthropy as being meaningful—emotionally.”

A study published last month in The Journal Psychological Science titled, “Impediments to Effective Altruism: The Role of Subjective Preferences in Charitable Giving,” sheds light on just how important an emotional connection is to the decision to support nonprofit missions. The research supports the idea that people view their decisions about which charities to support as being subjective or personal, rather than as something they do to have the most impact.

In the language of the researchers, this desire to connect on an emotional level “inhibits the impact of effectiveness information on welfare maximization.” In other words, people are not persuaded to make charitable donation decisions solely based on information about the effectiveness of their donations.

This seems to be particularly true when people are deciding on the type of charitable organization to support, for example, those dealing with health care advocacy and research, refugee issues, animal rights, supporting people experiencing homelessness, etc. The connection that people feel to a particular cause is more important in their decision to donate than whether or not there are more effective options available, ones that might have more of an overall impact.

These findings are consistent with the “warm glow” theory of giving, which says that people find prosocial behavior to be personally rewarding, regardless of the magnitude of the benefits created by their donations. And why, for example, I give away $5 and $10 bills out of my car window to people asking for donations on street medians, as we recently wrote about here.

One interesting question that comes to mind is, do people differ in the way they approach charitable giving and other financial decisions? Maybe there is nothing special about how people select which charities to support. Maybe people approach other spending decisions in generally the same way, without as much regard for the ultimate benefits that we would imagine that they would.

That turns out not to be the case. The research clearly showed that people in the study used objective information while making personal financial decisions to a much greater extent than when they were making charitable decisions.

However, it turns out that effective altruism does influence people, and strongly so in some situations. Overall, the number of people who selected a “welfare-maximizing” option in the study was greater than chance. And when choosing between causes, people were more influenced by their personal preferences, but once they had chosen a cause, welfare maximizing considerations became very important. For example, if it was revealed that past donations were ineffective, they became discouraged, which might lead to the decision not to continue supporting the charity in the future.

In the final analysis, we can think of people as “distorted altruists.” They do care about welfare maximization—doing the greatest good—but it is often difficult to make comparisons. How do you compare animal suffering to human suffering? Clean water and opioid abuse? Veterans’ health and reducing hunger? It’s complicated. And without a way to make comparisons, people rely on their feelings to guide their decisions.

Love conquers data. Again.

Katrina VanHuss and Otis Fulton have written a new book, Dollar Dash, on the psychology of peer-to-peer fundraising. Click here to download the first chapter, courtesy of NonProfit PRO!