We’re excited about the project of making giving more analytical, more intellectual, and overall more rational. At the same time, we have mixed feelings about the project of quantifying good accomplished: of converting the impacts of all gifts into “cost per life saved” or “cost per DALY” type figures that can then be directly compared to each other.

We believe that these two projects are too often confused. Many expect (or assume) GiveWell to make all its recommendations on the basis of “cost per unit of good” formulas, and it often seems that the rare people who want to be intellectual and rational about their giving are overly interested in explicit quantification.

It seems to us that attitudes toward giving are most often classified as “emotional/intuitive” or “rational/quantitative.” We think this framing is problematic on multiple fronts. We don’t think that “rational” should be opposed to “emotional,” and we also don’t think that the very real problems of “quantitative” should be used to tar all those who seek a “rational” approach.

We propose what we think is a better framing: distinguishing “passive,” “rational” and “quantified” decisionmaking. For each, we discuss both how this style of decisionmaking approaches a “normal” purchasing decision – buying a printer – and how it approaches giving.

Passive

Passive decisionmaking follows the path of least resistance, favoring options that are salient and/or easy to choose.

A passive approach to buying a printer might involve buying the first printer that comes up in a search, or the first affordable printer that one sees in a store, or the printer suggested by a friend.

A passive approach to giving might involve supporting a charity that calls on the phone, or giving to a charity that a friend is fundraising for. It might also involve reacting directly to short-term emotional incentives: for example, a charity that tells a compelling story can induce immediate guilt/cognitive dissonance prior to a donation, and/or immediate emotional reward after a donation. Supporting such a charity can often be “easier” (in a short-term sense) than not supporting it.

We believe this describes the way most people choose charities to support.

Rational

Rational decisionmaking involves an effort to make the best possible choice (according to the decisionmaker’s values) between all viable alternatives, given constraints on how much information is available and what resources are available to gather more information.

A rational approach to buying a printer might involve a process such as

Searching for “printer” on Amazon and using Amazon ranking, user reviews, and price as initial filters (e.g., making a list of printers that are within the price range and have strong user reviews).

Creating a document in which the different options can be viewed side by side in terms of a variety of metrics, such as printing speed, printing quality, desk footprint, etc.

Googling “printer,” searching for rankings and editorials, and entering noteworthy praise or criticism into the document.

Asking friends for comments on their experiences and entering those into the document as well, as warranted.

Looking at all the collected information, narrowing the field further based on particularly important criteria, perhaps creating some limited aggregated indices for comparison, and making a decision that considers – but does not commit to a formula regarding – the available information.

Talking to people about one’s decision and reasoning and seeing whether one has missed any important considerations.

Of course, the amount of effort that is put in depends on how important the decision is (as well as on how much time the decisionmaker has available). In the case of a printer, the above process might or might not be overkill.

In our view, a process broadly similar to this is appropriate for choosing a charity to give to (or a cause to invest in), especially when giving a relatively large amount. We seek to:

Consider a wide range of possible options.

Narrow the field in successive stages, using the best heuristics we can come up with.

Use both internal and outward-facing discussion to identify key questions that might be both (a) important to our bottom line and (b) tractable to further investigation.

Investigate such questions and write up what we find.

Collect all of the information into one place and thoroughly discuss it (again, both internally and externally) before making a final decision.

This approach has clear differences with the “passive” approach, but the differences are not – in my view – about “heart vs. head.” In fact, if anything, I think the rational approach is more likely to be associated with strong emotion. People often try hardest to take a “rational” approach when making their most high-stakes, emotionally important decisions; the “passive” approach is more common for decisions that are considered inconsequential.

Quantified

Quantified decisionmaking (as defined for the purposes of this post) involves committing to a universal metric for comparing all options and then formally quantifying options in terms of this metric.

A quantified approach to buying a printer might involve

Developing a metric such as “Net present-value dollars gained” for judging printers.

For each printer, estimating things such as The expected time and convenience gained by being able to print things from home, and the present value of this time and convenience in dollars – including scenarios in which the alternative would be to print from a copy shop, scenarios in which the alternative would be to ask friends to print, and scenarios in which the alternative would be to refrain from printing a document and instead read it on the computer or rely on one’s memory. The expected time lost to repairing or replacing the printer (a function of its reliability as estimated from reviews and friends’ comments), again converted to present-value dollars. The monetary value of the desk space taken up by the printer.

Creating an estimate of each relevant parameter, sometimes informed by facts and sometimes mostly based on guesswork.

Calculating the “net present-value dollars gained” for each contending printer, making adjustments that come up on sanity checks, and purchasing the printer with the highest final score.

In our view, this approach is analogous to giving based purely on expected DALYs averted per dollar spent.

To be clear, we think this approach has some definite merits when applied to giving. We have found cost-effectiveness analysis to be highly valuable for the degree to which it brings implicit assumptions to the foreground. It often spurs debates that wouldn’t have happened otherwise, and it may provide clarity into our thinking that couldn’t be obtained in any other way. Perhaps it would accomplish similar things when applied to purchasing a printer. And this method is almost certain to be the best method when all of the relevant parameters can be estimated with high precision (this is not the case either with buying a printer or with giving to a charity, but may be the case for simpler and/or more technical questions.)

The weakness of this approach, in my view, is that it takes an enormous amount of effort to do well, and even when done well generally involves so much guesswork and uncertainty that it’s questionable whether the results should influence one’s prior beliefs. Valid, high-certainty information that should shift one’s view (for example, “this printer takes up a lot of space”) can be lost in the noise of all the guesswork used to convert the information into a unified framework (for example, converting the space taken up into dollars gained).

When using a single unified equation, one mistake – or omitted parameter – can result in a completely wrong conclusion, even if much of the other analysis that was done is sound. The “rational” approach uses implicit model combination and adjustment, and is more likely to give a good answer even when not all of the inputs are reliable. It can also be more efficient in the sense of view-shifting information gained per person-hour spent.

Conclusion

GiveWell exists to promote rational giving as opposed to passive giving. It doesn’t necessarily seek to promote quantified giving.

When rational and quantified giving are too strongly associated, rational giving suffers from the association. There are many legitimate criticisms of quantified giving that do not apply to rational giving, and future posts will advance some of these.

The primary purpose of this post was to draw as clear a distinction as we could. We don’t want to see the important and exciting project of “rational giving” remain tied to the much more limited and less exciting project of “quantified giving.”