I have just finished an excellent book called "Doing Good Better" by William MacAskill. It's about how we can apply evidence based methods to evaluate charities, and try to do the most good with the money that we donate. At one point he refers to one of his recommended charities as "The Index Fund of Giving." As soon as I saw that I thought "the Mustachians will love this!"
The whole approach is called "Effective Altruism." Basically we evaluate charities based on how much they improve people's lives, or how many lives they save, per dollar donated. The movement uses a metric called "Quality Adjusted Life Year" (QALY). They get an estimate of people's Quality Adjusted Life based on responses by people with certain diseases. For example, someone may rank life while blind as 70% as good as life while not blind. This gives a general idea on how much good we can do by treating diseases or making other improvements to people's lives. So performing a medical procedure that improves someone's life by 10% for the next ten years would be one QALY. Performing a procedure that extends the life of someone who, due to medical conditions, is only living a life 50% as good as normal for two years would also be one QALY.
Obviously this is going to be imprecise. However, MacAskill makes the case that the most effective charities are often 100+ times as effective as the typical charity. Therefore, even if our estimates are off by a factor of ten, the most effective charities can do far more good than the typical charities. Many will think that this approach is too cold and calculating. People will say that we should donate to all charities, not just the most effective ones. I agree that this would be ideal. But all of us have limited resources. Say you have $1,000 to donate this year. The charities recommended by MacAskill can treat or prevent malaria or worms in dozens of people, or significantly improve the economic well being of a family, for that amount. By contrast, a "typical" charity might provide thanksgiving dinner or a free summer camp to low income families in the US. These are worthy goals, but it should be clear that deworming a child will do more to improve their life than sending a child to a summer camp will.
I highly recommend that all charity-minded Mustachians check out the book and take a look at the website
http://www.givewell.org/. We are always trying to get the highest expected ROI on our investments, so shouldn't we do the same for our giving?
Top Charities Recommended by givewell.org
Against Malaria Foundation:
https://www.againstmalaria.com/ This charity provides insecticidal nets to prevent the spread of malaria.
Schistosomiasis Control Initiative (SCI) Provides support for deworming programs in Sub Saharan Africa. This is an extremely cost effective way to massively improve people's health, which in turn can lead to increased productivity.
Deworm the World Initiative:
http://www.evidenceaction.org/ The Deworm the World initiative is led by a group called Evidence Action, and runs school based deworming campaigns in India. Evidence Action also distributes safe water dispensers to chlorinate water in places like Kenya, Malawi, and Uganda.
GiveDirectly:
www.givedirectly.org This is the charity MacAskill called the "Index Fund" of giving. They do direct cash transfers to low income households in Kenya and Uganda. This could be thought of as a good "default" charity because people generally are best able to plan for their own needs. Based on the data they have collected so far, it appears the majority of the funds are spent on livestock, improving homes, business expenses, health, education, and food. There was no increase in alcohol or tobacco spending.