Imagine that we put all the people in the world in a row, ordered from the poorest to the richest. At one extreme we would have people living in extreme poverty in a country like Somalia. And at the other we would have billionaires like Amancio Ortega. In this row, where do you think you would be? The answer will surprise you.
Do you think the rich should do more to help the poor? Most people usually answer yes. And if you think the same, let me ask you another question: Who are “the rich”?
Today I will interview an expert on the subject, Pablo Melchor, founder of the NGO Ayuda Efectiva (“Effective Aid”). And at the end of the episode, I’m going to commit publicly and for the rest of my life to improving the world.
How rich are you?
While I prepare for the interview, let me tell you a little about Pablo Melchor. He studied business administration and was an entrepreneur for two decades, during which he founded two companies, in addition to working in consulting. But at a certain point during his professional career, he asked himself a question that led him to radically change his life: “Is this the best I can contribute to the world?”
And through attempting to answer that question, Pablo discovered effective altruism, a movement I have talked about in previous episodes, and founded Ayuda Efectiva: An NGO that identifies and allocates funds to projects that save and improve the greatest number of lives for the least amount of money. Since then, his organization has helped almost 600,000 people, and saved the lives of more than 200.
So, taking advantage of the fact that Pablo Melchor was coming to Barcelona to give a talk, I proposed doing a short interview for my channel.
Pablo Rosado: I am here with Pablo Melchor. Thank you very much, Pablo, for giving me a few minutes to your namesake, Pablo the AltruPhysicist. I must say that I have seen your presentations on many occasions, and I always end up inspired, eager to take action and to try to improve the world in some way. And one of the things that you often say is that there’s something that is relatively simple,that can have a big impact, which is simply donating money. And for many people this might be a bit odd. It may sound like something too naive, perhaps not having much impact. So why do you think donating money is actually a good idea?
Pablo Melchor: There are many reasons why donating money is a good idea. First thing: Because we don’t deserve the luck we have. We were born in Spain instead of 4000 kilometers further south, in the middle of sub-Saharan Africa, and we have done nothing to deserve it. And it seems fair to share at least some of the luck.
Let’s stop here for a moment. What’s this about us being so lucky?
In Spain, the typical net salary is close to 1,500 euros per month. If your salary is close to or above that amount, how rich do you think you are?
You can find the answer on this website (which I’ve put in the description). Here you can find out what position you’re in according to your income. And it turns out that, with a typical salary of 1,500 euros, you are already in the richest 5% in the world.
In other words, out of every 100 people chosen at random around the world, 95 are poorer than you.
And if you earn more than 3,000 euros net per month, congratulations: You already belong to the richest 1% in the world (yes, very close to Amancio). But even a “mileurista” person (earning 1,000 euros) in Spain is among the richest 10%.
So, if earlier you answered that the rich should do more to help the poor, maybe check that you’re not also among “the rich”.
How much poverty is there in the world?
Pablo Melchor: Since we are so incredibly rich compared to other countries, what for us is a small amount requiring little effort, donating can achieve a lot in its destination, if we truly finance the best projects.
It may seem a bit exaggerated to say that we are “incredibly rich”. And of course it’s true that there’s also poverty in Spain. However, when we think of “the richest,” we tend to look toward those at the top of the global economy, such as Bill Gates, Jeff Bezos, or Elon Musk. But we never look down to realize that there are many more people there, much poorer than us.
And, although it may seem unbelievable, even today, there are still many people in the world who live in extreme poverty. This is true despite almost being in the second quarter of the 21st century, and despite all the incredible advances in medicine, artificial intelligence, physics… It’s unthinkable!
When we talk about extreme poverty, we talk about people who go hungry every day of the year, who don’t have access to basic services such as electricity or drinking water, and, worst of all, who don’t have any way of escaping poverty. In economic terms, living in extreme poverty means surviving on less than $2.15 a day.
Maybe you think that $2.15 in some countries goes a long way. But be careful! This number is measured in what’s called “international dollars”: it corresponds to what you could buy in the United States in 2017 with $2.15. That is, living in extreme poverty anywhere in the world is more or less equivalent to living in Spain earning less than 40 euros per month. Can you imagine the life you would have with a salary like that?
Well, this is how more than 700 million people live today. 9% of the world’s population.
Maybe you think that it’s not your fault that there are poor people. And you’re right. But you also have to accept that if you’re rich, it’s not due to your own merit. We are privileged, simply for having been born in Spain, and not in Mozambique. It doesn’t matter how much we have studied, worked, or saved: We won the lottery! So shouldn’t we share some of the prize?
How to help in the most effective way?
Pablo Melchor: The next question is: “Sure, but does this serve any purpose, this thing about donating money?” There are people who think it’s not helpful. I think people think that donating money is not enough because many times, when we donate to NGOs, we don’t know what happens next. So, we gave some money, we felt good in that moment and then it was over. But there is a better way to donate. And that better way to donate is based on impact, on financing projects that truly achieve a result, we know that the results are there and we can measure them. Once we donate in that way, we realize that donating has a much bigger impact than almost anything else we can do.
Pablo Rosado: So, it’s not only important to donate, but it’s also important to know which projects we should donate to because not all of them have the same impact?
Pablo Melchor: Yes, yes, yes, I mean, it’s essential. It’s essential because we have an amount that we can donate and it’s not infinite. When there are people who have begun to analyze in detail what the impact of different organizations is, it’s not that some are a little better than others. No. The thing is that the best ones are ten, or even a hundred times better than if we picked one at random out of all the NGOs and donated. This means that the potential of our money depends completely on the project which we decide to allocate it to. We have a certain responsibility to choose the best options to donate to.
In a previous episode of AltruPhysics I gave an example of two NGOs that have similar objectives, but which have a huge difference in impact. I compared the organization Guide Dogs Australia, which breeds, trains and assigns guide dogs to blind people, with the Fred Hollows Foundation, which treats blind people among indigenous Australian communities and developing countries.
Both organizations do great work and have a common goal: Helping people with eye diseases. But it turns out that by donating to Guide Dogs Australia, you can help one blind person for every 50,000 dollars. And, for that same cost, by donating to the Fred Hollows Foundation, you can cure blindness for not one, but 2,000 people.
This is an example of how your money can have a much greater impact if it is donated to more cost-effective charities. But, of course, how can we know which organizations those are?
Pablo Melchor: The good thing is that there are independent evaluators out there. One of my favorites is called GiveWell, which spends 40,000 hours a year identifying the best projects. You don’t have to start doing a lot of work to research them now, as we can very easily know which ones are the best projects to donate to.
What impact can your donations have?
Pablo Rosado: If someone is watching this video and feels inspired and wants to do something, what would you recommend? What can one person do right now to have an impact?
Pablo Melchor: The first thing I would do is go to Ayudafectiva.org to read. The numbers are there, the differences in impact are there. If someone is already convinced, obviously, they can donate. And you can simply talk to others, discuss it, ask your family at dinner tonight “Do you guys donate? Who do you donate to? Why?” Simply taking that small step of delving into the details, discussing it, and, for anyone who’s made their mind up, donating, changes things. And the sum of many small donations ends up having a huge impact, if we direct them well.
Let’s assume again that you live in Spain and earn a typical salary of 1500 euros per month. If you decided to donate just 5% of your salary for a year, what could you achieve?
According to these estimates from Ayuda Efectiva, with those 900 euros donated throughout the year, you could:
- Protect 113 people against malaria.
- Prevent 225 children from becoming blind or even dying from vitamin A deficiency.
And if instead of all that you prefer that the money goes directly into the hands of those who need it most, so that they themselves decide how to invest it, that’s also a good option. In that case, consider that 900 euros a year would be more than enough to lift a person out of extreme poverty.
In other words, donating 5% of your 1,500 euros would feel like a small difference for you. But for those people you would help, it could mean saving the life of a child, or getting out of the hellish trap of extreme poverty.
If more people donated to effective charities, incredible things would be achieved. In fact, if the richest 1% in the world donated 5% of their income, we could lift all of humanity out of extreme poverty. And as a bonus, we would also be able to greatly reduce the risk of catastrophic events such as pandemics, nuclear wars, and other risks derived from artificial intelligence, in addition to making great progress in mitigating climate change.
So, globally, donating to the most effective NGOs can be hugely beneficial for everyone. But even a small individual donation already has a huge impact on those people who your money is destined for.
Enough talk: The time has come to take action.
So today, in front of you all, I am going to publicly sign a declaration: I commit to improving the world for the rest of my life, by donating at least 10% of my gross income to the most effective causes.
You may think I’m crazy, but if so, let me tell you that I’m not the only one. They are already more than 9,000 people from all over the world have signed the same pledge.
And you can also join us. In the description I will leave a link to Ayuda Efectiva, to the Effective Altruism website, and to Giving What We Can, where you can learn more about all these topics. Even if you commit to donating just 1% of your income, over the years you will end up helping many people.
After all, ending extreme poverty is not a distant utopia: It will happen sooner or later. And the more people we help in an effective way, the sooner we will achieve it.
Pablo Rosado: Well, thank you very much for your time and for your work.
Pablo Melchor: You’re welcome. Thank you very much, Pablo, for also giving us the opportunity to talk about it here on AltruPhysics.
And thank you very much to you too for your attention for this very special episode. Whether I have convinced you to make effective donations, or if you have any questions, leave me a comment and share this video with your friends and family. And I hope to see you again in the next episode of AltruPhysics.