Why you shouldn't donate to large charities

One of the most common questions we receive at Effektiv Spenden is why we do not recommend large, well-known aid organizations such as Doctors Without Borders, SOS Children’s Villages, Bread for the World, or Oxfam.

Our criticism is not based on the belief that these organizations are untrustworthy or that we take issue with the amount of their administrative costs. In fact, we believe that very large charities, like almost all charitable initiatives, employ highly motivated and sincere people who are trying to make the world a better place.

The main reason why we do not recommend them is that we are not aware of any external evaluations that compare these organizations on a scientific level. Therefore, we simply do not know if they are among the most effective NGOs in the world and if a donation to them will be particularly effective.

It is true that some organizations, such as terre des hommes or the UNO-Flüchtlingshilfe, carry the DZI Spendensiegel, while others, like the Deutsche Rote Kreuz, Welthungerhilfe, or action medeor, have been recognized on a project level with the PHINEO Wirkt-Siegel. However, as we have shown here, the significance of these charity seals is extremely limited. For one, the analyses are comparatively superficial, and moreover, as already mentioned, there is no comparison of the charities with each other. They merely certify the adherence to minimal standards. Hence, the description of the Deutsches Zentralinstitut für soziale Fragen (DZI) as a “donation TÜV” often used in the press is accurate from our perspective, but not very flattering. After all, the TÜV only certifies a car’s roadworthiness without saying anything about which car offers the best value for money. You will not find a test winner or any indication of which of the inspected organizations your donation is best placed with at either DZI or Phineo.

Now, of course, you could ask yourself why Effektiv Spenden or the evaluation institutes we work with don’t simply take action themselves. Why don’t we check how seriously and, above all, effectively the major renowned charity organizations are tackling the world’s problems?

The answer to this question is based on the fact that it is very time-consuming to evaluate and compare charities in a really serious way. Since there are now millions of them worldwide, you have to make a very conscious decision beforehand as to who should be shortlisted for a comprehensive analysis. The really big ones regularly fall through the cracks. Not because we think they generally do a bad job, but simply because they are, to put it bluntly, general stores. With annual budgets in the tens or hundreds of millions of dollars, they implement a wide range of measures, many of which have not been proven to be effective, or even known to be ineffective relative to their cost.

For example, UNICEF has 17 focus areas and 27 areas of operation.

And organizations like Greenpeace are also highly diverse in their engagements. For example, they campaign against factory farming and for tigers. Against military spending and for peace in Ukraine. Against nuclear power and for energy conservation.

It is hard to imagine that each of the measures presented achieves the same amount of good per euro, and that the organizations, on average across all their projects, belong to the world’s best. Our partner organization GiveWell similarly argues this point in their blog post Mega-charities.

Especially earmarked donations are not a solution. On the one hand, it would be very time-consuming to evaluate all programs in detail, but above all, as we have shown here, your donation effectively does not influence how much money flows into which programs.

In conclusion, we deliberately do not recommend any of the very large and broadly active organizations, but instead focus on specialized initiatives that concentrate on particularly effective measures and have been highly rated internationally by renowned research institutes. With these organizations, your donation can make a tangible impact, whether in the fight against extreme poverty, for more climate action, animal welfare, democracy, or to reduce existential risks.

About the author

Sebastian Schwiecker

Founder & Managing Director

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I am the founder and managing director of Effektiv Spenden. If you have any questions or feedback about this article, you can send me an email or reach me at 0176/23570281. You’re also welcome to book a free donation consultation with me.