Charitable Giving

Updated: May 19

Recently, I’ve been thinking about how some diseases are surrounded by media frenzy, while others receive very little attention. How does this impact funding and health research? How are certain diseases prioritized over others? How should donors decide where to donate their charitable giving?

Let’s look at the case of the “Ice Bucket Challenge,” which went viral on social media in the summer of 2014. The Ice Bucket Challenge helped to raise funds for and awareness of amyotrophic lateral sclerosis (ALS), a neurodegenerative disease. According to The New York Times, donations made to the ALS Association in the summer of 2014 more than doubled those made in the previous year.  The 2014 ALS Ice Bucket Challenge raised $115 million, of which $77 million was used to fund research. The ALS Association and those  affected by ALS were obviously pleased with the increased attention being given to the disease. However, others argue that while the funds raised for the cause were significant, the success of the campaign highlights a deeper concern.

William MacAskill writes that the Ice Bucket Challenge was an example of “donor-focused philanthropy,” which focuses on the donor’s good deed rather than the intended beneficiaries. His concern is that this type of charitable giving is based on the success of the charity’s marketing campaign. According to MacAskill, “all people have an equal right to a happy, flourishing life,” but not all causes are equal. People who donated to the ALS Association following the Ice Bucket Challenge may have simply donated because of the media attention being given to the cause rather than thinking about the most effective and impactful use of their money.

Do donors think about the most effective way their money could be used to address the world’s problems? In short, the answer is no. Behavioural economics has shown that people can be encouraged to donate by “focusing on the social,” using techniques like using the influence of prominent individuals and making acts of charitable giving more visible to incite donations.

If people’s donations about charitable giving are so easily swayed, how can we make a conscious effort to donate to causes that will have the most impact? What are the most effective ways of donating? MacAskill suggests using the quality-adjusted life-year (QALY) metric to compare how different health programs benefit people. This does not mean that the work of the ALS Association or contributions from donors should be discounted. Rather, it indicates that we need to think more carefully about the impact that our donations can have and how the funds can be used most effectively.

(Written by Amber Purewal/Image Source)