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How to make an impact with your charity donations

For many Australians, choosing to donate to charity can be a daunting task.

There are so many organisations and it can be difficult to know which charities are supporting the causes that matter most to you.

All too often we’re left pondering the big question: Where is my money going and how will it be used?

It’s worth noting that not all charities are created equal, and some can be hundreds or even thousands of times more effective than others.

For almost 25 years, we’ve seen the number of people in extreme poverty steadily decline, but the global pandemic has contributed to a significant setback and the World Bank’s most recent report, Poverty and Shared Prosperity, paints a grim picture.

This year is expected to be among the worst for worldwide poverty reduction efforts as high inflation and weak growth create more hardship, making it more crucial than ever to donate. 

Adding to that, the number of people giving in Australia has declined in recent years. A Centre for Social Impact (CSI) report found growth in charitable giving is falling far behind the increase in Australian wealth.

If you want to make sure your donations are having the biggest impact, what should you consider?

Many of us base our giving decisions on the heart, but truly making an impact also requires the head. A little bit of research and due diligence is critical to finding the most cost-effective organisations.

While high overheads reveal little about a charity’s effectiveness, factors such as a proven track record, transparency, sustainability, rigorous monitoring and evaluation, skill, and experience in leveraging funding and strategic partnerships are essential for identifying effective charities.

If the charity you choose to support isn’t cost-effective, evidence-based and well run, you’re short-changing yourself.

Fortunately, organisations like The Life You Can Save Australia, founded by renowned philosopher Peter Singer, help donors identify effective charities, making it easier to find high impact giving opportunities.

For instance, if $300 was directed towards one of The Life You Can Save’s top charities, one could:

In his book of the same name, The Life You Can Save, which you can download here for free, author Peter Singer suggests taking a ‘giving pledge’, which means giving a minimum of one per cent of your income annually – a recommendation that is designed to have a barely noticeable impact on your standard of living and a lifesaving impact on those in extreme poverty. 

Mr Singer says taking the pledge also helps you hold yourself accountable for following through on your good intentions. And, when you tell your community, it influences others to join you in taking action to improve the lives of those living in extreme poverty.

“We can, each of us, do our part in ending extreme poverty. But we won’t reach our goal unless many more contribute to the effort,” he writes.

While historically, not-for-profits receive the majority of their donations during a couple of months of the year – the holidays – The Life You Can Save says recurring monthly donations are the best way to make a considerable impact.

Poverty exists in all countries, and the lives of poor people are difficult no matter where they live. The neediest live in low-income countries, at a scale and level of poverty that is hard to imagine. They have no social safety nets, no access to services that are readily available to the poor in affluent countries, which makes the case for focusing on giving internationally strong.

The Life You Can Save has an Impact Calculator to help you explore what good different charities can accomplish with a given amount.

So, what are you waiting for? Receive your free copy of The Life You Can Save today (there’s even an audio book narrated by celebrities Stephen Fry and Kristen Bell) and make your donation count.

Rickard Vikstrom is executive director of The Life You Can Save. His journey with The Life You Can Save started in 2009 when, while working as fundraising manager at UNICEF Australia, he was introduced to Peter Singer’s then newly released book of the same name, The Life You Can Save. Nine years later, he officially joined The Life You Can Save as a volunteer, quickly transitioning into a full-time staff position, initially leading the organisation’s work on fundraising and partnerships before being appointed executive director in 2021.

Are there charities you donate to regularly? Are you sure they are efficient and effective? Why not share your thoughts in the comments section below?

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