Doing Good Better: Effective Altruism and a Radical New Way to Make a Difference

by William MacAskill

Imagine saving a single person’s life: you pass a burning building, kick the door down, rush through the smoke and flames and drag a young child to safety. If you did that, it would stay with you for the rest of your life. If you saved several people’s lives – running into a burning building one week, rescuing someone from drowning the next week, and diving in front of a bullet the week after – you’d think your life was really special. You’d be in the news. You’d be a hero. But we can do far more than that. According to the most rigorous estimates, the cost to save a life in the developing world is about $3,400 (or $100 for one QALY). $3,400 is a small enough amount that most of us in affluent countries could donate that amount every year while maintaining about the same quality of life. Rather than just saving one life, we could save a life every working year of our lives. Donating to charity is not nearly as glamorous as kicking down the door of a burning building, but the benefits are just as great.

Of these three charities, which do you think can do the most good with your $100 donation? In this chapter I’ll provide a framework that will help you determine the answer.

One popular way of evaluating a charity is to look at financial information regarding how the charity spends its money. How much does the charity spend on administration? How much is its CEO paid? What percentage of donations are put directly to the charity’s main programmes?

Second, you might be surprised by how few charities are on this list. Aren’t there dozens of worthy charities in the world? Yes there are, but that doesn’t mean you should give to them all. As we saw in Chapter 3, the best charities are often far better even than very good charities. Given that we’ve only a limited amount to spend, we should focus on the very best charities rather than merely very good charities.

Similar to Buffett and Munger - diversification makes sense if you don't know what you're doing; if you do, invest in the small number of funds that have outsized returns.

Instead of trying to work out what your calling is and then forming a rigid plan on the basis of that calling, you should think like a scientist, testing hypotheses. This has three implications. First, it means you should think of your career as a work in progress. Rather than having a fixed career plan, try to have a career ‘model’ – a set of provisional goals and hypotheses that you’re constantly revising as you acquire new evidence or opportunities.