Friday, 16 November 2012

The Logic Of Charitable Giving




It's the night of Children In Need, and I had the following thought. Children In Need is a noble organisation, so is Cancer Research UK, so are charities that provide people with drinking water, and so are many other charities that do excellent work.  If you're feeling charitable at any time throughout the year, by all means give charitably - but here's my advice; don't do what your natural instincts tell you is right by giving to many different charities.  The best thing you can do is give all you want to give to one charity.  In other words, if you were going to give £20 to Oxfam, £20 to Cancer Research UK and £20 to the RSPCC, you should decide which you think is the worthiest* charity and give all of the £60 to that one charity.

I've just spent a few minutes thinking about this, because it seems like a contention that is set up to have lots of objections fired at it.  But I don't think any of them can dent the logic of giving all to the charity that you think is most worthy.  Don’t be fooled with the argument which says “I don’t know which is the most worthy, so that is why I diversify”, because even with imperfect knowledge you have still made the decision to the best of your ability, so the logic still holds.  

The only caveat I would add is this; if everyone in the country came to the same conclusion - for example, that Oxfam is the worthiest charity - then all the other charities would be notably short of donations. But given the diversity of charitable giving across the nation, I don't expect that would happen.  People do currently give to the charity they think is most worthy – it’s just that for some irrational reason they withhold some of the ‘worthiest’ money by giving some to charities they consider less worthy.

I think giving all to one charity must feel counterintuitive – but an extreme case will demonstrate the logic of my argument.  After a Tsunami has hit a nation and there are mass appeals, suppose you work out that you can afford to send £500.  I doubt very much whether you’d get the sudden urge to only give the Tsunami appeal £250, because you felt compelled to split the other £250 between Break and the RSPCA.  You are giving all to the Tsunami appeal because you have an intensified notion that that is the most worthy recipient of your beneficence at the present time. 

But although the Tsunami appeal is a heightened case, you’re only doing in the extreme what you are otherwise doing in moderation – you are trying to give to the charity you think needs your money most, except that outside of extremes you take on a proclivity to diversify your giving.  I think I know why people do this; what is being suggested you do in charitable giving is the opposite of what is suggested in most other walks of life.  Over consumption of one product, over-activity in one particular hobby, too much work and not enough play, etc, is bad for us, so we choose moderation as we try to diversify our time and resources.  That, I think, is why people naturally look to diversify when giving to charity. 

But here’s the key difference between the charities and the other activities.  When you over-consume in other walks of life, it comes at a cost to your other equally important activities. If you were down the snooker hall every night and all weekends you would become a good snooker player, but your wife and kids would be devoid of your other qualities, and you’d miss out on other interests too.  If you only read Charles Dickens books you would miss out on a wealth of literature. But this never happens in charitable giving.  If you decide that providing drinking water to people without it is your top priority, you are never going to over-do the giving to the point that no one else needs drinking water.  Once you have decided that providing water to dying people is the neediest cause, then splitting £500 between the clean drinking-water charity and, say, the RSPCA is tantamount to taking £250 out of the hands of (what is to you) the most needy cause and giving it to (what is to you) a less needy cause. 

If you want to give because your concern is 100% for the recipients in need, then I think you would rationally arrive at the conclusion that the neediest charity should have all your charity money.   However, if you wanted to give because, at a subliminal level, it feels good to think to yourself *I frequently give to all those charities – pat on the back for me* (and let’s face it, we are all highly susceptible to self-praise and delusions of grandeur), then your motives may be a little less meritorious than you first hoped.  That’s not to divert from the fact that all charitable giving is noble, and hugely significant for the charities concerned.  But if you think one is more worthy than the others – that is the one to which rationality says you should give all your charity money. 

* By ‘worthiest’ I mean the charity most in need for the most important good.

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