{"id":7139,"date":"2019-08-29T13:46:59","date_gmt":"2019-08-29T13:46:59","guid":{"rendered":"\/blog\/?p=7139"},"modified":"2026-03-31T13:40:53","modified_gmt":"2026-03-31T13:40:53","slug":"how-to-optimize-your-social-impact","status":"publish","type":"post","link":"https:\/\/www.lemonade.com\/blog\/how-to-optimize-your-social-impact\/","title":{"rendered":"How To Optimize Your Social Impact"},"content":{"rendered":"\n

When you buy a phone or book a vacation, you probably read several customer reviews to make sure you get the best bang for your buck. Because in most areas of life, we know it\u2019s important to base our spending decisions on <\/span>evidence<\/span><\/i>, not guesswork.<\/span><\/p>\n\n\n\n

But when it comes to giving to charities, our reasoning tends to flip. Turns out, only 3% of people research how a charity spends their money before donating, according to a study by the Money for Good project.            <\/span><\/p>\n\n\n\n

That means most of us give our money away without even knowing if it will actually make an impact.<\/span><\/p>\n\n\n\n

It speaks to that fundamental question about charity: Why do people give to begin with? <\/span><\/p>\n\n\n\n

Why do people give? <\/strong><\/h3>\n\n\n\n

Research<\/span><\/a> shows that giving is essentially a social act.<\/span><\/p>\n\n\n\n

We choose causes to donate to based on personal experiences, or friends who are raising money for a particular organization. For example, a study by the University of San Diego shows that people give significantly more to their university if their former roommate<\/a> asks, instead of a complete stranger. <\/span><\/p>\n\n\n\n

And it\u2019s not just our friends and families who influence us. According to online donation platform JustGiving, if we see that a donor before us made a large donation, we\u2019ll most likely increase our own donation.<\/span><\/p>\n\n\n

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We\u2019re also drawn to <\/span>immediate<\/span><\/i> causes, even if only a small number of people will be impacted. Malaria kills far more people than natural disasters such as earthquakes. But since this disease is ongoing and doesn\u2019t make the news as often, malaria charities don\u2019t evoke the same emotional urgency in us.<\/span><\/p>\n\n\n\n

But, there\u2019s another reason why people give: the<\/span> \u2018<\/span>Warm Glow.\u2019<\/span><\/p>\n\n\n\n

The Warm Glow<\/strong><\/h3>\n\n\n\n

In the late 1980s, economist James Andreoni argued that internal motives for giving were much more important than had previously been acknowledged. He came up with a name for his thesis \u2014 the warm-glow theory \u2014 and it stuck. <\/span><\/p>\n\n\n\n

In the warm-glow view of philanthropy, people aren\u2019t giving money to cure cancer; they\u2019re giving money to feel the \u2018glow\u2019 that comes with being <\/span>the<\/span> kind of <\/span><\/i>person<\/span> who\u2019s helping to cure cancer. <\/span><\/p>\n\n\n\n

And in a study conducted at the University of Sussex, psychologists confirmed that Andreoni\u2019s \u2018Warm Glow\u2019 is scientifically proven. <\/span><\/p>\n\n\n\n

Their study, published in NeuroImage, analyzed existing research showing the brain scans of more than 1,000 people while they\u2019re making charitable decisions.<\/span><\/p>\n\n\n\n

For the first time, they split the analysis between what happens in the brain when people act out of genuine altruism \u2013 where there\u2019s nothing in it for them \u2013 and when they act with strategic kindness \u2013 when there is something to be gained as a consequence.<\/span><\/p>\n\n\n\n

The Sussex scientists found that reward areas of the brain are more active \u2013 i.e. use up more oxygen \u2013 when people act with strategic kindness.<\/span><\/p>\n\n\n\n

But they also found that acts of altruism, with no hope of personal benefit, activate the reward areas of the brain, too. Some areas of the brain were even <\/span>more<\/span><\/i> active during altruistic generosity, indicating there is something unique about being altruistic with no hope of gaining something in return.<\/span><\/p>\n\n\n

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Do we need to give better?<\/strong><\/h3>\n\n\n\n

The problem is, things like the ‘Warm Glow’ can distract us from giving to the charities that need it most. <\/span><\/p>\n\n\n\n

As Richard Vevers, founder of <\/span>The Ocean Agency<\/span>, told us: <\/span><\/p>\n\n\n\n

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\u201cPeople believe causes receive far more support than they actually do. <\/span>The environment is a great example – only about 1% of charitable giving in the US goes towards protecting the environment<\/a>. <\/span>The situation for ocean conservation is even worse. It attracts less than 0.2% of charitable giving, even though it is one of the world’s biggest challenges – keeping the ocean healthy<\/a> is essential to all life on Earth.\u201d<\/span><\/p>\n<\/blockquote>\n\n\n\n

We need to try and find ways to optimize our giving so it makes the most impact. <\/span><\/p>\n\n\n\n

Effective Altruism<\/strong><\/h3>\n\n\n\n

Here\u2019s where effective altruism comes in. <\/span><\/p>\n\n\n\n

Coined by University of Oxford professor William MacAskill, effective altruism looks at how we can do as much good as possible with the resources we have at our disposal. <\/span><\/p>\n\n\n\n

Altruism means wanting to help other people; but adding in the effectiveness component is a more complex idea – because it\u2019s about doing something <\/span>well<\/b>. <\/span><\/p>\n\n\n\n

MacAskill gives a simple example:<\/span><\/p>\n\n\n\n

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\u201cImagine you could save five people from drowning, or you could save one person from drowning. It\u2019s a tragic situation and you can\u2019t save both. So, you choose to save the five, rather than the one, because there are five times as many interests at stake.\u201d<\/span><\/i><\/p>\n<\/blockquote>\n\n\n\n

Similarly, if you give to one charity, you might save one life. But if you give the same amount of money to another charity, you might save hundreds of lives. <\/span><\/p>\n\n\n\n

When evaluating a charity, effective altruism suggests we should prioritize these characteristics:<\/span><\/p>\n\n\n\n