Week 2: Differences in Impact

“We now see the new order of integration emerging on the horizon. […] We must rise above the narrow confines of our individualistic concerns, with a broader concern for all humanity. You see, this new world is a world of geographical togetherness.” - Martin Luther King, Jr. (1956)

In Week 2 we continue to explore the core principles of Effective Altruism. We focus on giving you tools to quantify and evaluate how much good an intervention can achieve; introduce expected value reasoning; and investigate differences in expected cost-effectiveness between interventions.

Each week, we will feature an organisation working in the fields we’re reading about. This week, our featured organisation is GiveWell.

GiveWell searches for the charities that save or improve lives the most per dollar. They recommend a small number of charities that they believe do an incredible amount of good. Unlike charity evaluators that focus solely on financials, assessing administrative or fundraising costs, they conduct in-depth research aiming to determine how much good a given program accomplishes (in terms of lives saved, lives improved, etc.) per dollar spent.

Rather than try to rate as many charities as possible, they focus on the few charities that stand out most (by their criteria) in order to find and confidently recommend high-impact giving opportunities. See their top charities here.

They believe that there is exceptionally strong evidence for their top charities, and that donations can save a life for every $3,000-$5,000 donated.

Core materials

• Doing Good Better - Chapters 5 and 6 (60 mins.)

  • Chapter 5 discusses counterfactual reasoning

    • Earning to give is used as the example of counterfactual reasoning. It is important to note that 80,000 Hours (the largest EA-aligned career advice organisation) thinks earning to give might be the best career option - in terms of social impact - for some people, but not most people.

  • Chapter 6 discusses expected value reasoning

• The world is much better; The world is awful; The world can be much better - Our World in Data (5 mins.)

• Expected Value (5 mins.)

  • If you find this confusing (it is quite hard to understand initially!), check out this intuitive introduction to expected value reasoning. Note that when we use this term in this fellowship, the “value” is not some financial reward based on our actions (e.g. winning the lottery), but the amount of good our actions creates (e.g. lives saved).

• Scope Insensitivity (5 mins.)

• The Moral Imperative toward Cost-Effectiveness in Global Health - Centre for Global Development  (30 mins.)

Exercise (60 mins)

Your challenge this week will be to practice generating quantitative estimates and comparing outcomes. Through this exercise, you’ll attempt to estimate how much good you might be able to achieve by donating to effective charities. (Though of course this is only one of the options for having a positive impact!).

Part 1 - estimate your likely total future income (10 mins.)

If applicable, you can do this by estimating what an average graduate from your university will earn. If you like, you can also think about personal factors such as what you think your likely career paths will be. This estimate is just for you, and we won’t be explicitly discussing answers to this part in-session.

Feel free to do any research that you would like to make your estimate.

If you're feeling stuck, here are some tips:

• Sometimes life can throw you curveballs and mess up your plans. Try making worst case scenario, most likely scenario, and best case scenario estimates if you're feeling uncertain about what the future holds

• Break the question down eg. you might find it useful to start by estimating how many years you’ll work before retirement

• Don’t worry about this question too much and try not to spend more than 10 to 15 minutes on it. It’s okay to just go with a very rough and inaccurate guess.

You might want to plug in this value into Giving What We Can’s How Rich Am I? calculator to see how this average annual income compares to the rest of the world.

Part 2a - what could you achieve with your potential income? (20 mins.)

For the second part of the exercise we'll try and work out what you could achieve by donating some of the money you might earn in the future. Donating money is of course not the only way to do good in our lives, and for most people the actions we take in our careers probably play a more important role in our capacity to do good. We’ll discuss these actions later in the fellowship. However, we think it’s important to note how much good we may be able to do in many different kinds of careers, through donating a proportion of our income. 

GiveWell is an effective altruism-inspired organisation which attempts to identify outstanding donation opportunities in global health and development. Using their reports on their top charities and your earlier estimate of your future income, try and work out what you could achieve if you donated 10% of your lifetime income to one of these charities. 

If you’re short on time, here’s a cheat sheet with information about three top GiveWell charities. If you’d like to explore further, check out GiveWell’s cost effectiveness models.

Complete this exercise for three GiveWell charities.

Part 2b (10 mins.)

In the last section, you ended up with a few different options, (e.g. doubling the income of 1000 people earning $1/day, or a 10% chance of preventing 1000 kids from attending school). Now imagine you get to donate to one of these charities.

There's a difficult judgement to be made now: since you have to pick, which charity would you donate to to do the most good? Vote here. The Fellowship will donate £100 to whichever charity has the most votes at the end of this week.

Optional (10 mins.)

What other considerations might you have for which charities to choose, apart from evidence of cost-effectiveness?

Recommended reading

Podcast episode

• Alexander Berger on improving global health and wellbeing in clear and direct ways - 80,000 Hours podcast episode (2021) (3 hours, can be sped up)

Two metrics that are often used to quantify the cost-effectiveness of healthcare interventions are QALYs and DALYs. Read more about what these are and how they’re used below.

• A guide to Quality Adjusted Life Years (QALYs) - Scottish Medicines (6 mins.)

• Disability-Adjusted Life Years: Introduction (3 mins.)

• The cost of NHS health care: Deciding who lives and who dies (25 mins.)

• Identifying Cost Effective Charities is Solvable (Podcast - 21 mins.)

GiveWell and the Open Philanthropy Project are sister organisations in the effective altruism community. Both seek to identify outstanding giving opportunities, but they use very different criteria and processes. 

GiveWell has an emphasis on evidence-backed, cost-effective, scalable organizations, while the Open Philanthropy Project is more open to supporting high-risk, high-reward work (i.e. interventions that are unlikely to succeed, but which would be significantly beneficial if they did succeed), as well as work that could take a long time to pay off. We think that the differences in their approach illustrate interesting methodological differences to try to answer the question “How can we do the most good?”.

• Our Criteria for Top Charities - GiveWell and Process for Identifying Top Charities - GiveWell  (20 mins.)

• Hits-based Giving - Open Philanthropy (60 mins.)

Criticisms

• Evidence, cluelessness, and the long term - Evidence covers only the more immediate effects of any intervention, and it's highly likely the vast majority of the value is thereby omitted from the calculation. (Video - 30 mins.)

• Charity Cost-Effectiveness in an Uncertain World – Center on Long-Term Risk - Another way to deal with prioritisation under uncertainty is to focus on actions that seem likely to have generally positive effects across many scenarios, rather than focusing on clear, quantifiable metrics. (30 mins.)

• Why Charities Usually Don't Differ Astronomically in Expected Cost-Effectiveness - An argument about how those in the effective altruism movement might overestimate the extent to which charities differ in their expected marginal cost-effectiveness. (40 mins.)

• Why we can't take expected value estimates literally (even when they're unbiased) 

• List of ways in which cost-effectiveness estimates can be misleading - A checklist of things to keep in mind when using cost-effectiveness estimates. (25 mins.)

More to explore

• Finding the best charity requires estimating the unknowable. Here’s how GiveWell does it. (Podcast - 1 hour 45 mins.)

• One approach to comparing global problems in terms of expected impact - 80,000 Hours - An outline of a more precise and quantitative version of the importance, neglectedness, and tractability framework; and details on how to apply it to make your own comparisons of areas. (20 mins.)

• On Caring - How can we feel an appropriate emotional reaction to the sheer magnitude of the world’s problems? (20 mins.) 

• Famine, Affluence, and Morality by Peter Singer in Philosophy and Public Affairs (1972)

• Subjective Confidence Intervals - Animal Charity Evaluators - A point estimate is a single value given as the estimate of a population parameter that is of interest, for example, the mean of some quantity. An interval estimate specifies instead a range within which the parameter is estimated to lie. (10 mins.)

• Prospecting for Gold - An overview of potential methodological tools we can use to find and evaluate high-impact opportunities. (Video - 55 mins.)