Since we haven't yet officially launched Giving What We Can, I realize that there is not much information available about the organization and our plans. I therefore thought it would be a good idea to provide a full written introduction to Giving What We Can, and what better way than a written version of the talk that I have been giving on it here at Oxford. It starts with a personal story. It is a rather long story, but I think it provides an excellent introduction.

As an undergraduate, I often argued into the night with my friends about political and ethical matters. I regularly received the retort: 'well if you believe that, why don't you just give all of your money to people starving in Africa'. This was meant to show that my position was absurd, but as time passed and I thought more about ethics, I found the suggestion increasingly sensible: why not indeed?

I started paying a bit more attention to those aid organizations which sounded particularly effective, especially one called the Fred Hollows Foundation. They focus on curing cataract blindness and claim to be able to do so for only £10. The operation is relatively straight forward and involves cutting out the clouded lens from the eye and replacing it with a new plastic one. Costs are kept low by making the lenses locally, in factories located in the developing countries themselves, and thus providing local employment as well. I was particularly struck by the low price. Becoming blind is a huge blow to anyone, and especially to those in the developing world. £10 to cure blindness — the stuff of miracles — is an exceptional deal.

Was it really true? How could I tell? Such statistics have a reputation for being slippery and it is rarely clear whether they include the total cost of delivery or just the raw materials. On their website, I found their annual report. I also found every past annual report. These documents summarize an organization's triumphs and aspirations for potential donors, and they also include fairly detailed financial figures. By looking through every single year's funding, I was soon able to put together a spreadsheet showing exactly how much money they had been given up to any point in time. It so happens that they also included a note on the exact date at which they cured their millionth person of blindness. Using the spreadsheet to properly adjust for inflation, it turned out that they cured their millionth person at just the time that they had received a total of £24 million (in today's figures). One million people cured of blindness for £24 million.

I now had a very conservative estimate for what the Fred Hollows Foundation needs to cure someone of blindness: £24 per person. This is conservative because it is the average cost over that whole period. Large amounts of the £24 million would have gone into setting up the factories and clinics needed for the service. Economies of scale have now been built up. Their cost to cure an additional person (which is the cost we are interested in) would be quite a bit lower than the average cost over the whole period. Indeed, I am inclined to agree with their stated figure of £10 to cure another person.

After seeing how little it cost to cure someone, I naturally started thinking about how many people I could cure if I really wanted to. I looked at the salary tables for academics in the UK and found that over my career (from 30 to 65, say), I should be able to earn an average salary of about £40,000 in today's terms. I was currently living on about £7,000 per annum as a student. My life was not extravagant, but was none-the-less immensely enjoyable and satisfying. I have a loving wife (then my fiancee), and my keenest enjoyments are all free, or at least within very modest means: reading a beautiful book, going for a picnic on a summer's afternoon, spending a quiet evening at home with my wife. What if I continued to live on a student's stipend? Perhaps with a few thousand more to provide some flexibility and room for saving.

If I earn an average of £40,000 and keep only £10,000 of that, I have an average of £30,000 to give away. Actually, there is a small amount of tax taken from this. Only a small amount because no tax is paid on the donations. I would actually have to keep £11,016 which gets taxed down to £10,000 and give away the remaining £29,000.

£29,000/year multiplied by 35 years equals £1,015,000 — over a million pounds.

I could thus give a million pounds away in my lifetime if I kept to a student's somewhat bohemian lifestyle. Note that this is a million pounds adjusted for inflation: the actual number of pounds donated would be much higher.

So, if we use the very conservative figure of £24 to cure someone of blindness, I could cure: £1,015,000 / £24 = 42,000 people. Think of the difference it would make in your life to be blind. It is even worse in the developing world, because there are very few careers that can be pursued by blind people and far fewer aids for them. For each of these people, being cured of blindness would make an amazing difference to their life. Now contemplate 42,000 people. Think of a line of people, two per metre, stretching for 21km. Think of the difference to so many lives. It is an impact so large as to be scarcely imaginable.

As I mentioned earlier, life on my current income is very good. If I spent the extra money on myself it would be a little better: I could go on holiday more often, get an iPhone, eat out at expensive restaurants. It would be nice, but not actually all that much better. So I have a choice between curing 42,000 people of blindness or adding a few neat extras to my life. Put like that, there is not much to think about. I decided to go with the 42,000 people. Indeed it would be worth sacrificing all these extras even just to cure one person. After all, I would give them up in a heartbeat if it was the only way to save myself from going blind: such luxuries don't nearly compare with the value of my own sight. So I'm giving up something that is less valuable to me than my own sight in order to save the sight of 42,000 people. Perhaps it is OK to value yourself more than you value others, but to choose otherwise here would be implicitly valuing myself at least 42,000 times more than others!

So I decided to give away everything above £10,000 or so (adjusting with inflation), and my wife has too. Since she is a doctor, she will be able to give even more than me. Together we can cure more than 100,000 people -- she will likely be able to do much more good by forgoing some luxuries than in all her work as a doctor! It really is quite amazing. Of course we don't need to cure blindness. Perhaps there is something even more effective we can put our money towards. What is really amazing is that this reasoning shows that we (and any middle class people) can do at least this much good. Even working class people in the developed world are very rich compared to those living in extreme poverty and can similarly use this wealth to make a tremendous difference.

After thinking all this through, it occurred to me that it was rather lucky that I'd done so. I'd spent so much time evading these facts (rather than just embracing them) and it seems quite possible that I could have done so for the rest of my life. I might never have found out just how effective charities can be, or never realized how little difference going without luxuries would make to my life. Indeed my decision would have been much more difficult if made once I'd started earning and spending large amounts of money. It is very easy to get hooked, both psychologically and practically (entering into a mortgage on an expensive house, for instance). When I thought about it, I realized that it would be great if there was an organization out there that made this stuff clear for people like my former self: people who are sincerely motivated but who have been overly shy of looking the facts squarely in the face for fear that something terrible would happen.

Giving What We Can is that organization. Its members are people who have come to recognize the facts about poverty in the developing world and have committed to giving a significant amount of their income to preventing this suffering. This commitment comes in the form of a public pledge that must be taken by everyone who wants to join:

The Pledge to Give

I recognize that I can use part of my income to do a significant amount of good in the developing world and that there is a moral obligation to do so. Since I can live well enough on a smaller income, I pledge that from today until the day I retire, I shall give at least ten percent of what I earn to whichever organizations can most effectively use it to fight poverty in the developing world. I make this pledge freely, openly, and without regret.

[This is only a draft of the wording]

Giving What We Can is thus a society of givers. We can share information about the most effective charities, about tax effective ways to give, and about any difficulties we have along the way. We can spur each other on to more giving, we can show others that this really is a choice they can make, and offer a friendly challenge to join us. Giving What We Can itself does not ask for people's money, but rather that they give their money to wherever they sincerely think it will be the most effective at eliminating suffering in the developing world, whether this be through organizations working in relief, prevention, empowerment, trade or high level advocacy.

There are various benefits in living by such a pledge to give. For one, it makes it easy to give. You don't have to agonize about whether you can justify each small luxury. Instead you can set an amount to give for the next year (of at least 10%), and then simply live within your (slightly reduced) means. It turns everyday questions of luxury from little moral dilemmas ('can I really justify this dinner out?') into simple prudential matters. It is difficult to avoid little temptations and this can put a strain on your willpower, but it is not very difficult to avoid overspending on a reduced budget because you know that it will just mean a less lavish life later in the month. Even if you do overspend, it is just yourself that pays the price.

This is what I mean when I tell people that it is not difficult to give away a large fraction of your income. You just go online and set up a direct debit. This is not difficult -- anyone can do it in a moment of moral clarity. There is a burden, that is true, but once you get used to the idea, it is not actually much of a burden. In my case at least, I feel much more purposeful in life and this gain is probably larger than any inconvenience caused. The burden is definitely higher for people who have become used to a high income and forgotten how well they got by on a pittance earlier in life. What is difficult is agonizing over whether you can justify each luxury. By making a pledge you don't have to do that anymore: you just live within your new means.

Making a lifelong pledge also helps to inspire you by showing just how much of an impact you can have. Its public nature helps you to keep to your word throughout the future, and also helps to inspire others to join us. By standing together as a group, we shall have more influence with government, and also more influence with charities, inspiring them to be more efficient in their programs so as to attract our giving.

We have set the threshold at ten percent for a number of reasons. It is a nice round figure, it has a long history, it is a significant amount of money, and yet pretty much everyone can afford to give it -- even if they have already committed to a mortgage or other trappings of modern life. It is a bold request in the eyes of most people, and yet they can see how it could be met. Of course it is only a minimum so people who want to give more can do so. We hope that some of our members will spur each other on to making even larger commitments, including giving everything above a fixed line (we have a pledge of this form too for those who think it is the best way to give).

How far can this go? My wife and I think we can give away about £2.5 million, which is $5 million. When I first talked about this with others, I quickly found several people who wanted to join us, some planning on giving a fixed fraction of their income and others planning to give everything above a fixed threshold. I see no reason why we couldn't find enough people to give a hundred times what my wife and I together will give, or $500 million. We really have the potential to make a very large difference.

As well as the focus on the pledge, Giving What We Can aims to provide the best public set of resources on giving. We will have links to all the major reports on poverty, articles on the best ways to make giving part of your life (and how to do the best you can in other aspects of your life), pages devoted to dispelling many of the myths about foreign aid, philosophical articles on the moral case for giving, and interactive tools to show just how much you can do with your own income.

The most important of these resources will be a series of pages assessing the effectiveness of different aid organizations. While most people think very little about just where they should give, there is an amazing difference in efficiency between different aid programs. Data from the World Bank and World Health Organization shows that there are many orders of magnitude difference in effectiveness among different aid interventions. For example, Hepatitis B vaccination programs save one quality adjusted life year (QALY) for each $23,000. In contrast, providing a second opportunity for a measles vaccine can save one QALY for every $4 -- which is more than 5,000 times as efficient. It is thus critically important that we know (and publicize) which aid programs are the most efficient. That way we can improve the good that comes from many donations by a factor of 10 or even 100 or 1,000.

We aim to assess aid organizations to one of three levels of certainty. The most basic level is to list what they claim to be able to achieve for a given amount of money. This is simplistic, but is the best that most people could hope to achieve on their own and will be neatly summarized in tables based on each type of intervention (health, education, governance etc), making informed decisions much easier. The second level is to analyze the public records of the organization in much the same way that I did with the Fred Hollows Foundation. This gives a very safe upper bound to the efficiency of each charity (or program within a charity). It also represents an objective assessment of the efficiency. Even if it is only accurate to within a factor of two, it will let people move directly to the most efficient tier of aid. Finally, we will consult with some charities, talking with them in depth about their programs and finances and perhaps perform some ground visits. The estimates we make based on such research will constitute our highest level of certainty.

In some ways this might be the largest impact that we will have. Everyone can use this information to give much more effectively and if enough people use it, this should have an effect on the efficiencies themselves. For if the aid organizations want to attract our collective donations, they will need demonstrably efficient programs.

By promoting giving as a way of life, providing support for people who choose to do so, and providing the best information on how and where to give for anyone who is interested, we think we will make a large impact on poverty.