World Happiness Report

The classic argument for giving to charity comes from the philosopher Peter Singer. He asks us to imagine we are walking past a shallow pond when we suddenly see that a child is drowning. We can jump in and save that child, but this will ruin our expensive new suit. Are we morally required to save the child at some cost to ourselves? The reaction most people have is that we must wade in. The principle that appears to explain this reaction is that, as Singer puts it, "if it is in our power to prevent something bad from happening without thereby sacrificing anything of comparable importance, we ought, morally, to do it".

This dilemma is not merely theoretical. People are suffering all around the world. Even if we can't help them directly, we could give some share of our income, perhaps 1%, to charities that can. This may not feel the same as doing it ourselves when the person is right in front of us, but the outcome may be identical. It seems that, if we have a moral duty to rescue the child, we have a moral duty to give something to charity.

You may not feel wealthy enough to give, but you're probably wealthier than you think. If you earn the median United States (US) salary ($42k), you are in the top 2% of the global income distribution. What's more, humans have existed for a few hundred thousand years and the world has never been wealthier. Believe it or not, you may be one of the richest people who have ever lived.

That's the stern, 'bad cop' argument for giving, but we can offer a 'good cop' one too: altruism is its own reward. Research shows that prosocial behaviour, and charitable giving in particular, improves self-reported wellbeing. This is no surprise if you've ever felt the warm glow of giving a gift to family or showing kindness to a stranger. Other chapters in this edition of the World Happiness Report also show the importance of prosocial behaviour. Chapter 2 highlights how having a clear sense of one's positive impact increases its reward to wellbeing. This chapter will give you clear information about how impactful your charitable donations can be. If you are not sure if giving will make you happier, why not try it and find out?

As a rule of thumb, the right amount to give is the largest amount that you can sustain. Peter Singer (the originator of the Shallow Pond thought experiment) proposes a stepped scale. It starts at 1% for those earning $40k-$80k, is 5% between $80k and $120k, and eventually rises to 50% for those earning over $50m.

As we mentioned earlier, the evidence indicates it does. However, this is presumably only up to a limit. We know of no research on the tipping point of when giving reduces our wellbeing.

WELLBY cost-effectiveness allows us to shine a bright, scientifically credible, and evidence-based light in a narrow spot: the topics where we have good self-reported wellbeing data. This is both a strength and a limitation. Our exclusion of charities from other areas, such as climate change and animal welfare, doesn't mean those topics have no value; only that the more we want to go beyond the existing evidence, the more we have to peer into the darkness and speculate. For instance, there is no clear theoretical problem with applying the WELLBY approach to climate change interventions (at base, it involves estimating the impacts on wellbeing now versus wellbeing later), but any analysis will rest heavily on assumptions about long-term effects. We hope that readers will be interested in the evidence we've assembled here, but not especially interested in our opinions, which is why we don't extend the analysis beyond the available data.

In short: no. Some people are understandably reluctant to switch because it feels like they are letting down the organisation they've been supporting and the people it benefits. But if you think an alternative charity will do more good per dollar, it helps to keep in mind the greater total benefit you'll cause by supporting that alternative.

A simple answer is that, if you want to maximise your impact, you should only give to the charity you think is most cost-effective. However, that organisation could reach 'diminishing marginal returns'. For instance, their budget gets filled and they can't usefully spend the money, so they stop being as cost-effective. At that point, you should switch to the next best option, and so on. This implies small donors shouldn't split, but perhaps large donors should as they have enough money to fill one organisation's budget and then move to the next.

However, this simple answer isn't very satisfying. One problem is that it's often very hard to compare the options. For instance, you might care about helping people today and helping future generations (or helping globally and helping locally, and so on). Lots of us have the intuition we don't really know how to compare these, but we want to do something about both. Faced with this problem, you might have a current people 'bucket' and a future generations 'bucket', then somehow split your budget between these, and then try to identify the best thing(s) in each. The authors share the intuition that this is the right approach, but it's unclear how to justify it or make the details precise, and very little seems to have been written on it in philosophy.

Another issue is that many people have a strong desire to split. Perhaps you're not motivated to give everything to a 'boring-but-effective' charity (even if you think that would make the most difference) and you want to give something to a cause that tugs on your heartstrings. In this case, it's clearly better to split your donations, rather than give nothing. Perhaps you give 80% to the boring-but-effective option and 20% to your 'heartstrings' project to stay motivated. Again, the best giving is sustainable.

Lots of people have the intuition that it's more important to increase the happiness of someone who's at 3/10 than someone who's at 8/10, even if the costs and all other factors are the same. This can be understood as a concern for equality, not merely efficiency. None of the estimates in our sample account for equality: they treat a 1-point increase as having the same value for both the 3/10 and the 8/10 person.

Further work could examine this, but we don't think accounting for equality would change the rankings. The most cost-effective charities tend to target people with low happiness anyway; what makes them so efficient is that they address serious problems. For instance, StrongMinds and Friendship Bench help depressed people in low-income countries, some of the worst-off people on the planet. In contrast, the less cost-effective options in the sample are often targeting better-off people in a wealthy country. So, adding in an equality factor would probably exaggerate the differences, making the most cost-effective options look more valuable, rather than reverse the results.