A few years back, famed Princeton philosopher Peter Singer had a student who, like many new graduates, wanted to change the world for the better.
The student, Matt Wage, decided that the best way for him to do that wouldn’t be to join the Peace Corps or take a low-paying job at a non-profit. Instead, he decided to take a job on Wall Street and donate as much of his income as possible to charities he believed in.
“[He] figured that he could make a bigger difference by doing that than he could if he actually went to work for one of those organizations,” Singer says.
Wage is about four years out from graduation now. Each year, he has donated six-figure sums to charities — or about half of his income.
“When you look at what it costs to save a life with this kind of work, he’s already saved many, many lives through what he’s been doing,” adds Singer, the author of the book, The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically.
He sees this approach to philanthropy as a new, better way to give – known as "effective altruism."
“For so long, people have given on the basis of what gives them a warm glow,” says Singer. But often, the good feeling comes with inefficiencies.
Singer cites studies that show that 70 percent of the people who donate to charity do no research into the charity.
“They don’t ask themselves the question, ‘How effective is that charity? How much is it costing to help that child? What is the charity actually achieving?’ There’s been a real dearth of that,” Singer says.
Moreover, there’s a huge market for charities, “Now when you consider that this is a 300 billion dollar industry in the United States, to transform that and make it all effective would really be making a huge difference in the world.”
Perhaps then, donating to charities can be boiled down to a cost-benefit analysis.
Singer explains it this way: “If you’re someone who is earning a lot per hour and by spending let’s say four hours a week at a soup kitchen ladling out soup, you’re actually reducing your earnings and therefore reducing by some hundreds of dollars the amount that you could give each week, then probably that’s not a great idea.”
Much like being an informed consumer, effective altruism relies upon making informed donations to effective charities.