Donating as you invest, that is, following an investment philosophy, can be much more effective. It’s what they do from Effective Aid Foundation. “We have saved more than 400 lives,” Pablo Melchor, its founder and president, tells us.
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Donate with an investment philosophy: “We have saved more than 400 lives”
Some ways to help can be much more impactful than others. We talked about it with Pablo Melchor, president of the Ayuda Efectiva Foundation.
“It’s very curious, but even the most rational people who in their work optimize investments to the penny, when it comes to helping they decide to be guided exclusively by the heart,” explains Melchor.
And it’s not that the heart is a problem, he clarifies, but if we want to achieve results, we clearly have to accompany it with the head. And it is something that is usually neglected in this area.
This way of making donations, following the same philosophy as investing, is based on a reflection by managers in the United States.
At the origin of much of this trend were two managers of Bridgewater, Ray Dalio’s hedge fundvery well known, and when they joined their philanthropic club, they were surprised to find that the projects were chosen by which one had a more moving story. “In their quantitative rational mind, it seemed horrible to them, it seemed intolerable to them.”
This investment philosophy seeks to optimize donations so that they are much more effective, as is usually done with investments.
“We know that we have saved more than 400 lives”
The figures of the Effective Aid Foundation. “Our calculations are very precise, because we do not do them every so often, we do them for each donation. Before making each donation, we explain to the donor what impact that donation is going to have.” Each donor receives a quarterly impact report.
When you add the impact, you are able to know that you have saved over 400 lives. “It’s hard to imagine, but you have to imagine a school with four entire courses and those children would have died if it were not for the help of effective aid donors.
How have they managed to save those lives? Attacking the areas that cause the most infant mortality and that are really very cheap to avoid. For example, malaria prevention with mosquito nets or preventive medication, with a cost of between 5 and 7 euros per treatment and per child treated.
They are very low unit costs. “AND when we protect thousands of children“Not only do we improve the health of all of them, but we also know with certainty that the most fragile of them, the one who would not have survived, is saved.”
They also focus on giving vaccination incentives. When we think about vaccination and unvaccinated children, he explains, the usual thing is to think well, this is a problem of the pharmaceutical industry and patents. But it really isn’t like that.
In the north of Nigeriafor example, which is where the largest population in extreme poverty is concentrated in the world, simply because the population is enormous, vaccines are free, but less than half of the children complete their childhood vaccination schedule, which is the most important.
Vaccines are free, but for a mother who lives in extreme poverty, a day when she takes her child to be vaccinated at a distant health center, without knowing if the vaccines will be there or not, is a day when there will be no income.
If you give an incentive to the mother, something that was discovered in India, giving a bag of lentils, and in Nigeria it is just under 2 euros per visit, that is enough to raise vaccination rates dramatically. “And it is, again, one of the most effective ways to save lives“.