UvA researchers present “Champions League” of charities
December is the period when the Dutch most often donate for charity. But which good cause to choose? UvA professor of philanthropy and sustainable finance Paul Smeets presented a top three of the most effective charities worldwide. “One charity makes a hundred times more impact than another.”
An anti-dehydration program to prevent children from dying from diarrhea, a foundation that reduces CO₂ emissions in food production and the Danish Vegetarian Society were voted most effective charities of December last Tuesday, on De Brug at Roeterseilandcampus. This is based on the research conducted by professor Paul Smeets and the foundation Doneer Effectief (Donate effectively).
The Danish Vegetarian Association is the newcomer to the top that was first launched December last year. That association got the Danish government to invest nearly 200 million euros in plant-based proteins. The New Incentives and The Good Food Institute were also elected last year, the first with another program. Six questions for Professor of Philanthropy and Sustainable Finance Paul Smeets.
Does giving to charities make sense?
“Yes, absolutely. Last year the New Incentives vaccination program was also voted the most effective charity, after which nearly half a million euros was donated. With that, 27.5 thousand children were vaccinated.”
What percentage of each donated euro ends up at the charity?
“That can vary a lot. If you donate to Doneer Effectief, 100 percent of your money is used for the up goal, because wealthy families pay the overhead costs, the costs you incur to keep the foundation running such as rent and wages. Usually overhead costs are around 20 percent, but we can’t get a good picture of that because charities often fiddle. It becomes a problem when the overhead is 80 percent, but whether it’s 10 or 20 percent doesn’t make much difference.”
“It’s ultimately about what a charity achieves. If you are going to supply vaccinations and you invest in a very good vaccination supply chain management system, so that you get the vaccination in the right place much faster, then you have higher overhead costs but you can also save a lot of costs.”
Yet you also hear stories that charities have a lot of money sticks to the fingers.
“There are huge differences between charities. The charity we declare as most effective can make as much as a hundred times more impact than the average charity. Most donors, including myself a few years ago, don’t know that.”
“I’ve been a bit skeptical about charities for a long time: doesn’t donated money largely go to renting canal houses? So I didn’t donate much either. Until I saw that if you use science to evaluate charities independently, you can do a lot of good. So that’s what I started to focus on in my research and teaching at the UvA.”
“Scientific research on the impact of charities is something of the past few decades. In 2019, the Nobel Prize in Economics was awarded to development economists who researched the cost-effectiveness of charities. With the foundation Doneer Effectief, we have been working for a few years now to make research accessible to donors as well.”
How did you choose the top three?
“We based ourselves on previous research into the cost-effectiveness of charities. The condition was that the charities were fully transparent. We looked at the scientific evidence that a charity’s intervention is effective. And then we compared charities with the same interventions and looked at which charity worked the cheapest. Finally, we looked at whether a charity could also handle additional donations, or whether that would be at the cost of impact.”
“Independent research institutions used that scientific research to nominate three good causes in the categories of poverty & health, animal welfare & food transition and climate. A jury of three scientists per theme, including one from the UvA, evaluated the charities and saw which one needed the money most this month.”
Is there also a Dutch charity in the top?
“No, not at the moment. But a number of Dutch charities are well on their way, and I do expect a Dutch charity to compete in the Champions League in the coming years.”
A “Champions League for charities” can also ensure that a select club of charities gets all the money. Can those charities handle that?
“Each quarter we reassess the new, effective charities and moreover: we take into account that the charity has extra room for funding. But to put it in perspective, in 2022 the Dutch donated 5.3 billion euros to charities. A few million of that goes to the most effective charities. So we have millions more euros to go.”
