Why and how to give

Published on June 10th, 2018


A significant portion of the world population lives in extreme poverty; most of the world is relatively poor. International poverty (as opposed to say, poverty in the USA) doesn’t just mean foregoing fresh foods and decent schools, wearing second (or third) hand clothes, and relying on welfare for the bare essentials — it means malnutrition, high infant mortality, drastically lower life expectancy, no healthcare (emergency or otherwise), no protection from the elements and no formal education.

Individual and household commitment to ongoing charitable donations aimed at poor nations — at a very affordable level — can, and does, change lives.

Most of the world is relatively poor

About 10% of the world’s population lives on less than $1.90 USD each day. More than 70% live on less than $10 USD daily. Extreme poverty means going hungry, having no access to healthcare or education, and being powerless to protect yourself or your family from the elements, curable diseases, and easily treatable conditions.

Global poverty is characterized by a lack of bare essentials like clean drinking water, sufficient daily calories, protection from the elements, and access to the most basic health services.

The poor are far away (but not that far)

The vast majority of the world’s extremely poor live in Sub-Saharan Africa, India, East Asia and South Asia. In these regions anywhere from 20% to as much as 70% of populations by country live in extreme poverty — earning less than $1.90 each day.

Extreme poverty hits much closer to home, too. More than 3 million households in Guatemala and Honduras live with less than $1.90 USD per day, often in regions reachable from the USA with about a full day’s travel. A simple $2 per day donation, were it to go directly to those in need, could double the standard of living for any of 3 million families living just a short trip from your front door.

To be perfectly clear, zero households in the United States, Canada, Australia or Western Europe (among many other regions) experience this level of extreme poverty — none.

Many charities and NGOs are measurably effective

Many would-be charitable givers are quick to bring up the widespread inefficiency of philanthropic organizations. Between administrative costs, dubious allocation of funds, and the lack of accountability often associated with charities, potential donors fear their gifts won’t reach those in need. Luckily there are ways to dodge this potential pitfall.

Organizations like GiveWell are working hard to identify and promote high-impact NGOs who concretely measure the outcomes of their projects. This sort of rigorous evaluation in the nonprofit sector allows you, the donor, to give with confidence that your donation is having a measured, significant impact. Check out GiveWell’s top charities.

Additionally, organizations that facilitate international micro-loans like Kiva allow you to directly support individuals and families in the world’s poorest regions. Simple person-to-person loans skip the overhead and put your support in the hands that need it. Check out Kiva to change someone’s life with a personal loan.

Your wealth and social capital

Many people in affluent nations don’t understand why the extremely poor are unable to escape poverty without help. The short answer is that the infrastructure present in affluent countries is itself largely responsible for its citizens' household income.

Herbert Simon, a Nobel Prize winning American economist, argued that 90% of individual income in affluent nations is due to “social capital” — social environmental factors like transportation infrastructure, rule of law, availability of financial institutions, standardized and compulsory education, and effective tax collection among others. In nations or regions that lack these social features financial success can be dramatically more difficult or impossible.

This means that two individuals brought up in very different societies, say the United States of America and Guatemala, could invest very similar personal effort and achieve very different levels of success. The same amount of hours spent working to adequately support yourself or your family in the USA would in many cases be totally insufficient to acquire even basic foodstuffs in regions of Guatemala, much less Sub-Saharan Africa.

What should I do?

The sheer size and complexity of global issues like extreme poverty can feel paralyzing compared to our relatively modest personal power. But don’t let the big picture stop you from making real change in real lives. Courage and hope are necessary to take the first step.

There is an irreducible, even tragic, tension in moral life given that we must take care of our own and also attend to the potentially infinite claims of distant individuals. What we should say is that we can never fully discharge our ethical responsibility: the ledger is never fully balanced. But we must not on that account withdraw our attention from people at a distance from us. — Martha Nussbaum

Every individual can make a difference. First and foremost, start giving at whatever level you feel comfortable. People tend to give more and feel more satisfaction in giving when they donate to organizations with which they have a personal connection. But if you’re not sure where to get started, GiveWell’s top charities or Kiva’s loan browser are excellent ways to take the first step.

How much should you give? Any amount greater than zero is a good place to start, and for most Americans 5% of your income is an excellent goal.

Peter Singer in his book The Life You Can Save suggests that citizens of the USA with a household income below $100,000 should consider giving 1-5% of their income, based on their ability. Households with an income between about $100,000 and $150,000 should consider committing to 5%, and incomes greater than that should engage with a sliding scale that places greater demand on higher income brackets, rising eventually to as much as 33% for incomes exceeding $10 million.

This level of giving would provide more than $500 billion annually, or nearly three times the estimated cost of some of the most aggressive global poverty relief campaigns being evaluated by the UN.

World change starts with you — your decisions, your commitments, and your courage.