Charitable Giving: Principles and Practices of Cost-Effective Philanthropy

As I get older, I think more about the wisest approach to philanthropy, to charitable giving.

I've settled on two basic criteria:

1. Maximal societal benefit for the dollars expended, including ripple effects.
2. Funding something wouldn't otherwise get funded. 

Here are initiatives meeting those criteria that I've funded or considered funding:

A prize
I have written previously about a prize I created. I prefer prize to grant because a prize motivates a number of people to work toward the goal I set. In my case, I set up a prize for the best doctoral dissertation leading to understanding the biological basis of cognitive functioning. I like that topic because while it has great potential to benefit humankind, for sociopolitical reasons, it's difficult today to obtain funding for it.

A challenge prize
Since then, I've considered a perhaps more potent related approach: offering a prize to the individual or group that first meets a specific challenge.  So, taking the above example of trying to further our understanding of the biological basis of cognitive function, I've considered Dr. Richard Haier's suggestion: offering a prize for the first individual or team that is able to predict g (a measure of reasoning ability) based on a brain scan or the person's genome. 

Alas, I don't think I can afford to make the prize big enough to motivate a team to redirect its efforts to that issue. I may yet try it with an affordable amount. If no one meets the criterion for winning it, I've lost only the time and administrative cost of publicizing the prize's availability.

Giving to a political candidate or party
I also thought about donating money to a political party or candidate. We are in an era of growing government power, so donating to a party or candidate could significantly affect the  country's direction. Again, alas, I don't have enough money to move the needle even slightly.

Funding a meritocratic rather than egalitarian cause
My current favorite idea is to fund an after-school and summer program for high-ability (although not necessarily high-achieving) kids who live in a blue-collar or lower-middle-class area. Here's how that idea meets my criteria:

America has moved heavily from merit-based allocation of resources to an egalitarian "redistributive justice" approach. Hence, in the schools, especially the public elementary schools, fiscal and human resources have been reallocated from programs for bright and gifted students to the lowest achievers. Today's priority is to close the achievement gap.

Yet I believe that, ultimately, the greatest societal good will accrue from prioritizing as they say, "the best and brightest." Kids with high cognitive ability (reasoning skills, fast learning ability) are more likely to cure cancer, govern wisely, indeed develop more effective approaches to closing the achievement gap. Just as a triage medic in the battlefield is trained to allocate the most resources not to the sickest but to those with the greatest potential to survive, I feel that allocating significant resources to high-ability students is wise--We all know brilliant failures, people who fail to live up to their considerable potential.

It's probably not optimal for me to fund programs in a high socioeconomic area: The schools have a high-enough percentage of high-ability kids that even mainstream instruction may do an acceptable job of meeting their needs. And wealthy parents have the wherewithal to supplement.

Nor do I feel it's optimal to donate my dollars to the lowest-income areas. There, the problems faced even by their high-ability kids tend to be sufficiently multidimensional and intractable that I fear my dollars wouldn't make the biggest difference. It strikes me--and I'm relying not on data but only my perhaps flawed logic--that my dollars will likely make the biggest difference by focusing on schools with a high percentage of lower-middle class people, especially those with a good percentage of new immigrants who were at least middle-class in their home country.

I'm thinking that the wisest point of entry is a lower-middle-class school district's after-school and summer program. There, egalitarian pressures may be more moderate, although I'm not sure. I plan to investigate.(Update: I've since supported the creation of Camp Think, a summer program in Napa run by one of the district's best teachers.)

Donating time

Of course, one can give charity not just with dollars but with time. I've chosen to make writing--for example, this blog--to be my charity of choice. I like writing and like to think that my posts give significant free help to people--maybe even including this post. 

You
So now we turn to you. Is there anything in this article that makes you clearer about what you might want to donate your money or time to?

Establishing a Prize: A Potent Approach to Philanthropy

Here's an advance look at my next The Life Well-Led column in the Mensa publication, The Intelligencer. 

I haven't submitted it yet, so your feedback is particularly welcome.

 The Life Well-Led

by Marty Nemko

A Bang-for-the-Buck Approach to Charitable Giving

My previous charitable donations haven't yielded sufficient benefit. For example, I funded the development of an online course for teachers of gifted kids. It was garbage.

Before wasting more money, I've done some thinking and research on how to get the most bang from my charity bucks. Perhaps the results of my exploration and the unusual charitable scheme I then concocted might help you in making wise donations.

The building blocks

1. Perhaps not surprising, as a Mensan, I value intelligence. So I'd like to invest my money in intelligent people who are working on improving intelligence. While, of course, brainpower can be used for good or ill, improving humankind's intelligence is a potent approach to enhancing civilization.

2. Funding a prize for the best research on improving intelligence would encourage many people to work toward that goal.

3. Restricting the prize to people at the end of doctoral training seems optimal:  It's late enough in the person's career for the selection committee to be able to validly assess nominees' potential but early enough to greatly affect how influential s/he is likely to be, for example, whether s/he gets a post at Harvard or at a less prestigious institution.

4. The prize should be administered by a prestigious organization. That adds prestige to the prize, which in turn means the prize's size can be smaller, which could enable me to fund more than one prize.

5. The organization must have a mechanism for broadly soliciting nominees for the prize, and be willing and able to assemble a strong committee to review the proposals. Alternatively, the committee could, instead of soliciting and reviewing proposals, pick the winner by reviewing the abstracts of presentations by doctoral students or recent graduates at major conferences. 

What have I done?

With those as guiding principles, here is what I have done: I have just established The Nemko Prize For the Study of the Biology of Cognition. I would have preferred a narrower focus: the biology of intelligence but the best organization to administer the prize, the Society for Neuroscience (SfN,) wanted the broader scope. SfN is otherwise ideal: It is the world's largest and most prestigious organization focusing on brain research, consisting of 42,000 researchers, including most of the field's luminaries. Also, SfN already administers a number of other prizes and has a proven mechanism for soliciting and reviewing nominees.  (The photo above is of a woman receiving an SfN-administered prize.)

The winner of the Nemko Prize will receive $2,500 but SfN is charging me $7,500. I'm okay with that because that includes the costs of soliciting and reviewing nominations and of travel for the winner to attend SfN's annual meeting, invaluable for a young researcher.

So, for $7,500, the world's neuroscience doctoral students will be incented to do their dissertation on the crucial biological basis of cognition and the best of those students will get a significant career boost. Relative to most other $7,500 donations, I believe that has greater potential to do good. Who knows? Maybe it will even result in more candidates for Mensa!

My plan is to endow the prize as a perpetuity but SfN is allowing me to try it out for three years.

I believe it's often wiser to donate to such a charitable venture than to give the money to family members. Too often, the family member doesn't really need the money and/or the largesse encourages them to sit on their butts--the so-called welfare mentality. I've seen many adult children of wealth,  so-called trust fund babies, be rendered unproductive because their parents gave them "welfare." Thus, charitable giving can be key not only to your life being well-led but to your family's.