Donating $100m is like donating anything else

So, $100m is a sizeable donation. And one charity is in line to scoop the lot. The choosing-a-major
John D and Catherine T MacArthur Foundation, a $6.5bn foundation based in Chicago, is looking for “a single proposal that promises real and measurable progress in solving a critical problem of our time” to which it will donate $100m.
More than 2,000 organisations applied to the aptly named 100 & Change campaign. Eight have been shortlisted. Foundations normally make their decisions behind closed doors (and are much criticised for it) but MacArthur is running the selection process in full public view. The single winner will be announced in December.

The shortlist is diverse. It includes work on eliminating river blindness — a parasite-borne disease that affects 16m worldwide — from Nigeria; digitising inaccessible books; educating refugee children in the Middle East; and developing vitamin-enriched crops for Africa.
But how can one choose between such divergent causes? We all face this question. It just looks different because most of us do not have so much to donate.
Certainly, $100m is a lot compared with most gifts. McArthur decided on $100m because “by funding at a level far above what is typical in philanthropy, we can address problems and support solutions that are radically different in scale, scope, and complexity”.
The average grant by large US foundations approximately $146,000. In the UK, the average personal donation is £14 according to the latest figures.
Yet in other ways, $100m isn’t that much. It is almost a fifth of the cost of the forthcoming refurbishment of Buckingham Palace, and not even half of the record €222m transfer fee Paris Saint-Germain just paid for the footballer Neymar.
And it is tiny compared with issues many charities address. One shortlisted project is the Sesame Workshop, which would use the grant to bring education to some of the 8m child refugees in Syria, Iraq, Jordan and Lebanon. Clearly, it will take rather more than $12 each to educate them.
So let’s look forward to a world in which gifts of $100m are routine, giving non-profits the scale of donations they need to solve effectively the problems they address.
Returning now to your own kitchen table, you might discuss what cause (or causes) you support — such as education, health, water, human rights or scientific research.
Historically, there has been more help on selecting organisations within a cause than choosing between the issues.
In health, competing options can be compared based on the amount and quality of life they add. The number of additional “quality-adjusted life years” is calculated for each option: an additional year of perfect life counts as one additional QALY; an additional year of mediocre-quality life might count as 0.5 QALYs, for example. It is also possible to work in a risk factor, for example, if the effect of an treatment is not yet known.
QALYs might help MacArthur determine which path to take within the health sector: restoring sight versus making vitamin-enriched crops, for example. But it won’t help with, say, choosing between delivering education versus bolstering human rights. Nobody has developed robust tools for comparing interventions between sectors. This makes choosing between social causes quite unlike commercial investing.
However, this gap has prompted a new discipline of research around prioritising causes. It has emerged from some donors’ interest in doing as much good as possible, which makes them understandably keen to pick the right battle, as well as figure out how best to win it.
The Global Priorities Project, which is part of this discipline and based at the Future of Humanity Institute at Oxford university, recommends using three criteria for choosing a cause:
– Importance: the number of people (or animals) affected by the problem, and how deeply they are affected
– Neglect: the extent to which the cause in question is ignored or underfunded by other donors and governments
– Tractability: the ability to make progress in finding a solution.
I might add a fourth criterion, which is your own interest. Donors generally engage longer with causes in which they are personally interested. Sometimes donors act as though meeting this single criterion is sufficient, which it patently is not — though it probably is necessary.
Any of us can use these criteria to direct our own giving, whether we are giving $100m, our time, or even just deciding to which charity shop we should donate our excess books, clothes and shoes.
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