Poverty is on the rise again

Over the past three decades, more than 1 billion people have escaped extreme poverty. However, COVID-19 has ended this positive trend. Instead, the trend has reversed. According to the World Bank the number of people living below the extreme poverty line rose by over 70 million to more than 700 million in 2020 alone.[1]  This means that in 2020, almost one in ten people worldwide lived in extreme poverty, i.e. on less than $2.15 a day.[2]

Donating works

Donations can make an important contribution to supporting people living in extreme poverty. The effectiveness of the charity supported makes a big difference. While most people assume that there is little difference in effectiveness between charities, the best organizations are actually more than 100 times more effective than the average.[3] There are two main reasons for this:

1. Every euro achieves more in developing countries.

Most people agree that every human life has equal value. So if we want to help people, it shouldn't matter where they live - in our neighborhood or in the Global South. Prosperity is much lower there. For example, the per capita gross domestic product in Kenya is only 9% of that in Germany. In Malawi, it is less than 3 percent. If you think it through, you can "automatically" do much more to help people in a very poor country with the same amount of money than in a very rich country.

Thanks to this enormous wealth gap and the strong purchasing power of the euro, it is possible in these countries to rid a schoolchild of harmful parasites for less than €1 or to distribute a mosquito net that reliably protects against malaria for less than €4. Both are measures that often save the lives of those affected, but in any case improve them, and which are fortunately no longer necessary in industrialized countries.

2. Health is not everything, but without health everything is nothing.

An example: The Massachusetts Institute of Technology based research institute J-PAL Poverty Action Lab has compared the cost-effectiveness of various measures to increase children's participation in school.[4] To this end, 58 randomized studies from 28 countries in Africa, Asia and Latin America were examined. 

This showed that health measures that reduce the incidence of illness among pupils are among the most effective ways of increasing school attendance. $100 for free school uniforms led to 0.09 additional years of school attendance in Kenya. $100 for scholarships increased school attendance by 0.15 years. 

However, if the $100 was invested in school-based deworming programs, 11.9 additional school years were gained for the children. The same amount of money could therefore achieve an impact 80 or more than 100 times greater. After all, even scholarships or school uniforms are of no use to those who are prevented from attending school by illness.

The effectiveness is scientifically proven

So we are dealing with two very powerful levers: firstly, the purchasing power advantage of our euro in very poor countries. And secondly, the knowledge gained through scientific studies. If we combine the two, we can increase the impact of our donation more than 100-fold.

This is made possible in particular by systematic research in the field of development economics. For their work on the effectiveness of various approaches in development cooperation, the three economists Esther Duflo, Abhijit Banerjee and Michael Kremer even received the Nobel Prize for Economics in 2019.[5]

Based on their research and a large number of other research projects, renowned research institutes such as GiveWell evaluate both aid measures and individual charities for their effectiveness and cost-effectiveness. We base our recommendations on these studies.

Your personal advice

Everyone who donates wants to make a difference. We are happy to help you achieve the greatest possible impact in line with your ideas and values. Simply book an appointment for your personal advisory session.

Anne Schulze,
Founder & Managing Director

Your personal advice

Everyone who donates wants to make a difference. We are happy to help you achieve the greatest possible impact in line with your ideas and values. Simply book an appointment for your personal advisory session.

Anne Schulze,
Founder & Managing Director

FAQ section

How much should I donate?

How much you want to donate is of course ultimately your own personal decision, but perhaps you will find some inspiration in the articles "How much should I donate?" and "Why and how I donate.

Can I deduct my donation from my taxes?

Yes, you can make your donation in Germany and Switzerland tax deductible, even if the recommended organizations are based abroad. We will automatically send you a donation receipt for all your donations by e-mail at the end of February of the following year. You don't have to do anything else.

I don't want to donate online, can I also transfer the money?

You are also welcome to make a traditional bank transfer. Please use our donation form under "Payment method", select the "Bank transfer" tab, enter your details, which we need for the donation receipt, and register your donation. You will then receive an e-mail with our donation account and a reference that will enable us to allocate your donation correctly as soon as you have transferred the donation.

What are the fees? Will you forward 100% of my donation?

We process donations free of charge, i.e. we do not keep any of your donation for ourselves. However, credit card or PayPal fees are charged by the payment providers we work with. These depend on the selected payment method and are calculated as follows for Germany:

  • Bank transfer: Free of charge within the SEPA payment area
  • SEPA-direct debit: 0,35 €
  • Credit card: 1.2% + 0.25 € (for European cards)
  • PayPal: 1,5% + 0,35 €

Therefore  we recommend the "SEPA-direct debit payment" for donations of up to €10,0000. For security reasons, the only option currently available for amounts of €10,000 or more is  "Bank transfer"

Comparable fees would also be incurred for a direct donation to the respective organizations. We have already negotiated with all payment providers and obtained particularly favorable conditions for non-profit organizations.

We also finance ourselves through donations, but completely independently.

You can find out more  here.

How can I change or cancel my permanent donation?

If you want to increase or decrease the amount of your donation, simply contact us by e-mail at info@effektiv-spenden.org . We are also happy to change the organizations/ projects/funds to which you donate if you wish. Unfortunately, we cannot change payment methods of already existing donations. To do this, you will need to cancel your donation and then set it up again.

You can cancel your permanent donation at any time and without giving reasons. Simply send us an informal e-mail to info@effektiv-spenden.org or call us at +49 (0)30 / 260 355 19.

How do you cover your costs?

Effektiv Spenden is made possible by private sponsors. This support enables us to cover all administrative costs. This allows us to pass on your donation in full to our top organizations. Of course, we are also happy about your donation to us as a platform. You can find out more about our funding here.

Sources

[1] ↑ Poverty and Shared Prosperity 2022, World Bank. http://www.worldbank.org/en/publication/poverty-and-shared-prosperity. October 2022.

[2] ↑ The World Bank adjusted the global poverty lines in September 2022. The new extreme poverty line of $2.15 per person per day replaces the poverty line of $1.90. The World Bank provides further information in its Fact Sheet: An Adjustment to Global Poverty Lines.

[3] ↑ Lucius Caviola et. al. Donors vastly underestimate differences in charities' effectiveness. Judgment and Decision Making, Vol. 15, No. 4. https://journal.sjdm.org/20/200504/jdm200504.pdf. October 2021.

[4] ↑ Deworming to increase school attendance. J-PAL. https://www.povertyactionlab.org/case-study/deworming-increase-school-attendance. February 2020. See also Roll Call: Getting Children into School. J-PAL Policy Bulletin. https://www.povertyactionlab.org/sites/default/files/publication/roll-call-getting-children-into-school.pdf. August 2017.

[5] ↑ Wirtschaftsnobelpreis geht an Armutsforscher. ARD alpha. https://www.ardalpha.de/wissen/nobelpreis/nobelpreis-2019-wirtschaftsnobelpreis-wirtschaft-100.html. October 2019.