Effective Altruism: The money is there, but where it’s spent just needs to be optimized.
The core principle of Effective Altruism is to make the most good out of given resources. This means ensuring the money that’s given to charity is being used to its best potential and that the most value can be achieved from every dollar. For example, to promote school enrollment, it is much more effective to spend funds on educating parents regarding the importance of education than it is to pay for clean uniforms or providing food incentives to children. When I was introduced to this idea at the start of the Arete Fellowship, it reminded me of a something I’d read in my Bangladesh Studies textbook back in high school.
The chapter in the textbook had been about GDP growth in Bangladesh over the past few decades and had said said something like this: most expatriates who live and work abroad send their incomes to their families in Bangladesh, and this accounts for a large source of Bangladesh’s foreign currencies. However, this money is rarely used to its full potential. The families would almost always spend it all on food, rent, and other living costs. If these families used a part of that money to invest in small businesses, there would be a return on that overseas currency that would help boost the Bangladeshi economy.
This optimization is analogous to EA’s aim to maximize impact from donations to charities. Just as slightly more mindful use of money from abroad could boost the Bangladeshi economy, mindful use of charity funds could not only help a lot of people, but also make donors feel happy that their donations are making the highest possible impact.
I also came to realize there are many other cases in which application of EA principles could potentially revolutionize things. Another area, again in the context of my home country Bangladesh, is the practice of zakat. This is the obligation for Muslims who have a certain amount of wealth to donate 2.5% of their annual income to those in need. Bangladesh is a Muslim majority country and most people, including my own family, donate this money to poorer relatives in the village, especially the sick or elderly who cannot provide for themselves.
While this helps the millions of recipients every year, I wondered if these funds, like those from the expatriates to their families, could not be used more efficiently. Instead of directly giving the money to these people to spend, why not try other things, like help recipients set up small businesses or invest in elderly care homes? The different approaches should be researched, and the most impactful ones should be implemented. That way, the donations would do the most good. The recipients would gain even more from the money they receive. And Bangladesh is just one of many Muslim majority countries in the world. Just adjusting the practice of zakat to be more in line with the principles of Effective Altruism would mean billions of dollars better used for those who give and those who receive.