Where American donors go wrong

Where American donors go wrong

If you’re like most of us, you’re probably already giving to charity. In 2014, 95 percent of Americans made charitable donations. 

Last year, American individual donors gave a total of $258 billion to charitable causes—more than the combined amounts donated by foundations ($53.97 billion), bequests ($28.13 billion), and corporations ($17.77 billion).

How much is $258 billion? That's enough to cover the combined annual costs of providing clean drinking water and sanitation for the entire global population—11 times over!

Collectively, Americans give a lot, but as individuals, do our donations make a difference? The typical American household donates an average of $2,974 to charity each year. That amount goes far–especially in the developing world, where medical services, supplies, gas and transportation are much cheaper than they are at home. 

So what could the average American family expect their charity dollars to purchase?

When given to effective causes, $2,974 is enough to buy:

As individuals, Americans are a generous bunch; as a nation, we're the world's leader when it comes to individual charitable giving. According to the World Giving Index, an annual report that publishes data on charitable giving across 130 countries, the United States is the only country to make the top-ten list across all charitable benchmarks.

All this is good news, right? So what's wrong with American charitable giving?

Here’s the reality: In 2013, less than 5 percent of American donation dollars went to international causes, and an even smaller fraction was allocated for effective anti-poverty relief. Unfortunately, this means that the majority of American charitable donations never reaches the people in the developing world who need help the most. 

Americans spend more time watching TV each day than the total time they spend researching effective charities in a year. In order to maximize our charitable impact, we need to couple our generosity with rigorous evaluation. 

The good news is that it’s easy to find charities that help the global poor through quality and cost-effective interventions. Charity reviewers like The Life You Can Save, GiveWell, and Giving What We Can publish lists of highly effective charities with strong track records of helping the global poor.

With American charity dollars alone–excluding government aid–we have the combined resources to put an end to global poverty right now. But not all charity dollars are the same. Where you donate your money will determine the impact of your donation.

What will your impact be? Use this Impact Calculator to determine how far your donation could go to help the world’s neediest people.

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About the author:

Rhema Hokama

Rhema Hokama is former Director of Communications for The Life You Can Save and holds a PhD from Harvard.

The views expressed in blog posts are those of the author, and not necessarily those of Peter Singer or The Life You Can Save.