Tim Harford, undercover economist and presenter of More or Less, recently accepted the #icebucketchallenge on air. He enlisted the help of various experts in his decision to donate £5 to the Motor Neurone Disease Association and £100 to the Schistosomiasis Control Initiative (SCI).

This is how it goes. The viral nature of the #icebucketchallenge guarantees its success, but herein lies the danger; the viral means of a campaign determine which charities get the most funding, when instead we should consider those that have the most impact. Niel Bowerman of the Centre for Effective Altruism cites the real problem of cannibalisation. He believes that people have a fixed budget in mind for charitable giving; if they give money to one charity because of a viral campaign, they may give less to others.

It’s certainly true that growing numbers of charities are spending more on fundraising without any obvious change in results, but Professor Stephen Lee at the Centre of Charity Effectiveness dismisses this claim. He speculates that because campaigns like the #icebucketchallenge produce spontaneous donations, they will increase donations overall.

The merits and demerits of viral campaigning aside, Tim says ‘a true nerd doesn’t run with the herd’ and so he continues on his quest to find the most deserving cause.

After talking to Elie Hassenfeld of Give Well, he essentially uses quality-adjusted life-years (QALYs)—which combine the quantity and quality of life generated by healthcare interventions into one single measure—to decide that funding worming tablets provides the best bang for his buck. Worming tablets are a cheap, simple solution to numerous problems. And indeed QALYs can be a useful tool when thinking about where to allocate funds. But it doesn’t tell the whole story.

Impact is made up of several dimensions: urgency of need; effectiveness of response (efficacy of intervention combined with the ability of organisations to deliver the intervention); and in some but not all instances, the cost benefit of response. So here are NPC’s issues with Tim’s ice bucket decision.

  • By taking a purely cost approach, you risk discriminating against anything that is expensive to fix. Many human miseries are complex to solve, and cannot be reduced to the simplicity of one worming table. Are you only going to fund things that are simple and cheap to deliver?
  • The number of QALYs gained often depends on factors such as the youth of the patient. Using strict QALY criteria, many compassionate activities—end of life care, for example—would be deemed worthless. But the value of one month lived well at the end of a person’s life may be vastly greater than the value of a month during the same person’s youth. Those suffering from rare and difficult conditions are likely to be ignored due to cost too. So hidden inequalities emerge.
  • QALYs can measure health, as Tim shows, but it’s harder to measure social outcomes because they vary so widely. How does a regular donor compare health outcomes with social outcomes, such as getting a job or staying out of prison?
  • Although QALYs are a standard economic measure, not everyone agrees they are the right measure of health. How they are derived is contentious—many disabled people understandably take issue with the assumption that because of their impairments, their lives must be of lower quality and therefore less valuable.

Tim allows a personal bent towards economic reasoning reduce what is a very worthy question (how can I have the most impact?) to one component part. I’m glad he urges listeners to think about the worthiness of a cause before they donate, and we advocate cost effectiveness too, but within each given context.

If every giving decision was carried to the same ‘logical conclusion’—in this case, that all donations should go to organisations working in the poorest parts of the world, where small amounts of money go far—then certainly nothing at all would go towards finding a cure or alleviating motor neurone disease.

Footer