Misconceptions about giving

The size or popularity of a charity has no bearing on how good they are at their work. The largest Dutch charities are well-known due to their marketing and fundraising budget. People donate in response to catchy advertisements that capitalize on sentiment and fundraising is often carried out by external companies at a large expense to the charity. These activities do not mean a charity is effective.

Research has shown that charities with a lower percentage overhead are not necessarily more effective with their spending²⁰ . There is no correlation between the two. In order for a charity to work as effectively as possible on their goals, the organisation must be well-managed. This is no different for a charity than for a normal company. Ultimately what matters is the impact of a charity per euro donated.

Actually, an individual donation can really make a difference. By donating to an effective charity you can have a clear and measurable impact on the lives of other people, animals or our environment. For just 5 euro you can protect a child from malaria for two years, and for 1.25 euro a year you can prevent a child from going blind (and possibly dying) due to vitamin A deficiency²¹.

All of the problems that are easy and cheap to tackle have often already been solved in rich countries. Those that remain are often expensive and difficult to define and solve – think curing cancer or ALS. In poor countries, the simpler problems have often not yet been addressed. For this reason, you can have more impact per euro by donating to charities that focus on problems that are easy and cheap to address in poor countries⁴. For example, saving a life abroad is significantly cheaper. In the Netherlands, the reference value (what an extra healthy year of life gained through treatment may cost on average) is currently 80,000 euro⁵. Contrast this with the fact that with just over 3,500 euros you can save the life of someone from Mali by supplying vitamin A supplements.

90% of Dutch charities spend their money in the Netherlands. This is unfortunate because The Netherlands is a rich country. All of the problems that are easy and cheap to tackle have often already been solved in rich countries. Those that remain are often expensive and difficult to define and solve. In poor countries, the simpler problems have often not yet been addressed. For this reason, you can have more impact per euro by donating to charities that focus on problems that are easy and cheap to address in poor countries⁴. For example, saving a life abroad is significantly cheaper. In the Netherlands, the reference value (what an extra healthy year of life gained through treatment may cost on average) is currently 50,000 euro⁵. Contrast this with the fact that with just over 3,500 euros you can save the life of someone from Mali by supplying vitamin A supplements. The remaining 10% of Dutch charities do not pass the strict selection of the independent evaluators. They also may not volunteer themselves to be evaluated.

Many of the major Dutch charities do not save lives directly, but instead pay for research into complicated diseases (e.g. cancer). While this research can be very relevant to improving the survival rates of people with this disease in the future, you can’t be sure you’re saving lives with a donation to research. All the expensive drugs and treatments for metastatic cancer have been shown to result in only 1 month of life extension over the last 10 years. Furthermore, there is often no shortage of money within research on common diseases, so a donation also has less potential impact. For example, a 50 euro donation ensures that an expensive researcher is paid one extra hour⁹. This is on the back of the existing 150 million euros already donated annually to cancer research^10,11.

The ANBI status and CBF seal of approval say nothing about the impact a charity achieves. Any organization that serves a “public benefit” (ANBI in Dutch) and is well managed can be given ANBI status¹². A CBF seal of approval can be given to an organization if it is transparent and well-managed¹³. Furthermore, the organization must also only have a plan for making and measuring impact. Whether a charity actually makes an impact is not a criterion for consideration.

Disasters naturally attract a lot of media attention and therefore a lot of money is often donated to them¹⁴. However, the saying ‘prevention is better than cure’ also applies when dealing with disasters¹⁵. So you can have more impact by donating to charities that are committed to prevention. For example, preventing floods turns out to be about 60 times cheaper than solving the problems that occur during a flood¹⁶. Even more so for drought prevention in certain regions – there it is as much as 1,800 times cheaper.