This is a crosspost from James Altucher‘s blog Altucher Confidential. Here are his previous appearances on the Freakonomics blog.
A few years ago, there was a story in the New York Post about a boy who had been locked in a closet almost from the time he was born until he was about fifteen years old. I might not have the exact details right. His parents fed him food but never let him out of the closet. So he never grew properly and he was only about 80 pounds or maybe less. The authorities took him away and put him in some sort of home for abused kids. His parents were arrested and are presumably now in jail.
In the article in the NY Post, the person running the institution he was now staying at said he “liked playing chess.” So I called up the institution and said I would pay for a guy I knew, a former US chess champion, to come over there and give him chess lessons. They told me they would get back to me. A few hours later they called and said, “thanks, but due to the specific circumstances we really can’t take the chance of any outside contact with adults.” So that was that.
Every day, the NY Post reports on countless local people that need immediate help.
I never donate a dime to a huge charity. The American Cancer Association might be a great charity. But what will my dollars do for them? Nothing. Warren Buffett and Bill Gates are spending $100 billion on eradicating cancer, AIDS, malaria. Other billions are fighting every major cause out there. The baby boomers are about to leave behind $9 trillion. Hopefully, a good chunk of that will go to charity. They can handle all of the major causes. My money will make zero difference. And I have no way of doing due diligence on the charity so I won’t know how my dollars are being spent.
What I like to do is direct donations into what I call “micro-causes.” Specifically, pick up the local paper and see who needs help RIGHT NOW, where a small amount of money can immediately make a significant difference in someone’s life. For instance, if the NY Post writes about a house burning down in Brooklyn and a now-homeless family — put them up in a hotel. Simple. Easy. Cheap. Makes their lives better while they deal with the loss of their home and all of their belongings. And probably nobody else thought of it.
Anyone can be a superhero. Here’s the rule for being your own Micro-Charity:
1) You are donating directly into the situation. So you know that every dollar is being put to work exactly the way you want it to be. None of the layers of bureaucracy that are found at many large charities.
2) The situation needs help right now. TODAY. And you can help. It’s easy to find these situations. Look in any local paper. Papers feed on pain. There’s always someone today in your area who is in pain for some reason and needs help. An example we all saw on YouTube last week was the kid getting bullied who got suspended when he fought back. Get that kid a math tutor while he’s suspended.
3) The donation MUST be anonymous. Or as anonymous as possible. For several reasons:
- Legal issues. If you put someone up in a hotel and, god forbid, there’s a one-in-a-million chance something goes wrong in the hotel, you don’t want to be legally responsible.
- Ego. This is charity. You can’t let it feed your ego at all. Nobody must know. Not the people you are helping. Not anyone else. It’s like when Superman saves someone from being run over by a bus. He’s done. Now he just flies off to the next situation.
- Risk. You’re not really a trained giver, and in some situations (very rare), you might find yourself in an inappropriate situation. Best you can just wipe your hands and move on. These situations are rare though and do not supersede the greater good being done in most cases.
Photo: Katherine JohnsonI can guarantee you this will feel a lot better than handing $100 over to whatever mega-charity is already getting billions from the billionaires. Let Bill Gates save the world. You can save a life.
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You demonstrate the perfect example of scope insensitivity bias. You’d rather spend the same money to save 1 cute kitten than a million humans and I think that’s border-line evil. More people should be donating money to things that could save us from global existential risk, thus saving the maximum amount of people per dollar. Something like aging research or solving friendly artificial intelligence.
http://lesswrong.com/lw/hw/scope_insensitivity/
I would never discourage anyone from giving in the fashion they choose, but I personally don’t see it as an either/or thing — I give to large international organizations, smaller local institutions, and make gifts to individuals with immediate needs. Each serves a purpose in its own way.
Zero difference? How did you get that number? Does it look like all the major causes are taken care of? Last I checked, they’re all still major causes because they haven’t been taken care of yet. Cancer, malaria, AIDS, lack of clean water, tuberculosis, diarrhea, malnutrition, intestinal worms, lack of education, natural disasters, … – you think that we’re already spending plenty of money on all of these problems so there’s no way that more funding could have any benefit? Seems implausible.
Try givewell, guidestar, greatnonprofits, or givingwhatwecan if you want more information on picking a good charity.
Charity organizations can reduce tremendous amount of transaction/logistic costs.
Folk, just do what ever you think you can do to help other people.
I take the exact opposite approach to giving to charity. Just as you can’t buy low and sell high on the stock market without being a contrarian investor, I don’t think you can maximize your charitable returns without being a contrarian giver. That means avoiding causes that happen to be written up in the newspaper this week, because they are the ones most likely to be flooded with donations. Relief funds for Haiti, New Orleans, and Japan are the sorts of things I avoid. I don’t feel any guilt, since those causes got my money first because I gave to the general funds for CARE and Doctors Without Borders.
Organizations like Accion International and Human Rights Watch are great investment opportunities right now, since they’re still doing good work, but haven’t been in the news lately. Accion in particular is great because it’s attacking fundamental issues of poverty, which can help to avoid or alleviate a crisis in the future.
In short, giving $100 to a mega-charity doesn’t feel as good as handing $100 to a needy person on the street, but I’m more interested in effectiveness than warm fuzzies.
Thanks for inspiring me to come out of blogging retirement. My response is here:
http://majormeans.blogspot.com/2011/03/response-to-james-altucher-superhero.html
Although I’m not opposed to large charity donations, I do think this kind of giving is underserved because of the tax deductibility of donations. Many financial advisors, for example, would encourage you to give to a 501c3 instead because of the tax benefit.
This kind of giving is, on average, more responsive to certain needs than charitable organizations can be. If people don’t do it because of the tax incentives, then I think the incentives are wrong. Also, a surprising number of people care about tax deductibility even though they don’t itemize their taxes.
Great idea. In general we always follow the celebrities and get to know only things which are either promoted by celebrity or media, it is real difficult to find places where you can help to see the impact instantly. But if these instances has wider visibility then we can surely make one life happier.