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Money Brain: Why we resist treating charities like investments

Should you treat your charitable decisions like your financial decisions?

To philosopher Peter Singer and those endorsing the “effective altruism” movement, the answer is yes. They argue that people could do more good if they approached their charitable decisions like they do their investments: donate to organizations that provide the greatest expected value.

For example, in the United States, it costs over $40,000 to train a single seeing-eye dog for the blind. However, it is estimated that you can save a child’s life by donating to the charity Against Malaria for under $4,000. If people aimed to maximize the return on their donation like they aim to maximize the return on their investments, then donating to Against Malaria provides a far better deal and will end up doing more good.

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