Could happiness be a new measure for nonprofit effectiveness?

What if charities were evaluated not on the basis of how much they improve people’s health or increase their incomes, but on the basis of how happy they make people? It’s an argument that moral philosopher Michael Plant has been making for years. Plant, who founded and leads the Happier Lives Institute, says people’s happiness should serve as the most important measure of a charity’s cost-effectiveness, or how much impact it generates per dollar. Founded in 2019, the institute conducts research and advises donors on how to increase well-being in low-income countries. “The idea is that we should try and have the biggest impact we can, and that we should take happiness seriously,” said Plant, a postdoctoral research fellow at the Wellbeing Research Center at Oxford University. “It just seemed like no one had really tried to put those together.” The Happier Lives Institute, or HLI, is part of the effective altruism movement, which encourages philanthropic donors to use reason and evidence to maximize the impact of their giving. The institute made waves within the effective altruism community last fall when it released its first-ever annual charity recommendation. Using its happiness-centered approach, it named StrongMinds, a nonprofit that provides group talk therapy to women living with depression in Uganda and Zambia, “the world’s best charity for creating happiness.” HLI argues that the group therapy StrongMinds provides is almost 10 times more cost-effective than just giving cash to people in extreme poverty — a standard benchmark for aid effectiveness. The Oxford-based institute, which has a small staff of seven, also holds a very different view of nonprofit effectiveness compared to many of its peers in the effective altruism community. For example, GiveWell, a nonprofit charity assessment organization that is highly influential among donors who identify as effective altruists, rates nonprofits based on how much it costs them to save a life. Most organizations that look at nonprofit effectiveness do not factor happiness into their approach. For one thing, they say, it’s hard to measure. But Plant argues there are reliable ways to quantify well-being, and proposes a unique methodology for, as he puts it, “measuring what matters.” He wants effective altruists and the broader global development community to think beyond wealth or health as their best guess for people’s quality of life. A self-described “happiness nerd,” Plant realizes his perspective is far from mainstream, but he’s working to convince more decision-makers to consider not just extending but improving lives. Measuring happiness Plant and his colleagues want to upend conventional wisdom on the best ways to help people in low-income countries. “Charitable giving is not a math problem with a single correct answer. ” --— Olivia Larsen, philanthropy advisor, GiveWell “We’ve been using GDP as the measure of social progress for nearly 80 years now,” he said, referring to gross domestic product. “And it was never supposed to be a measure of overall well being, but that’s how we’ve interpreted it.” To understand how HLI selected StrongMinds as its top charity for 2022, it’s important to unpack how it evaluates charitable interventions. Plant and his colleagues draw on tools and approaches from the growing body of social science research on happiness, like “subjective well-being” and “well-being adjusted life years,” or WELLBYs. Subjective well-being asks people to evaluate their own quality of life, typically with a question like, “All things considered, how satisfied are you with your life currently?” HLI then calculates charities’ cost-effectiveness using WELLBYs. One WELLBY is equivalent to a 1-point increase on a 0 to 10 life satisfaction scale for one person for one year. While the HLI did not come up with WELLBYs, it did pioneer their use to identify cost-effective opportunities to improve global well-being and is now pushing for wider use of the measure. Many donors, policymakers, and other decision-makers, however, dismiss this approach in favor of standard metrics combining quality and quantity of life: QALYs, or quality-adjusted life years, and DALYs, or disability-adjusted life years. Plant says he is often surprised by the pushback he gets. “If I wanted to know how your life was going, I could give you two options,” he said. “I can look in your wallet, I can look around your neighborhood, I can look at the rates of crime, I can look at your health status, and then I can tell you how your life is going.” Or, he continued, “I can ask you.” Assessing impact in terms of subjective well-being HLI spent three years and 10,000 hours of research, drawing on evidence from 80 academic studies, to come up with a new answer to the question at the center of effective altruism: “how can I do the most good?” The starting point for HLI’s analysis was an existing list of top charities recommended by GiveWell. The institute evaluated their impact based on subjective well-being. Then, HLI tried “to find something better” based on its own definition of cost effectiveness, which factors in happiness. They started with mental health, based on “back of the envelope calculations” that led Plant to suspect that treating depression with group therapy in low-income countries could be more cost-effective than providing cash transfers. HLI compiled a list of organizations working on mental health, and narrowed it down to StrongMinds. Then, the team went further, using its methodology to compare StrongMinds to three interventions that GiveWell recommends as being the world’s most cost-effective: cash transfers, deworming, and anti-malaria bednets. HLI determined that StrongMinds is ten times more cost-effective than cash transfers through organizations like GiveDirectly, a favorite of the effective altruism community, when effectiveness is measured in WELLBYs. Plant argues that when organizations like GiveWell, whose recommendations drive significant funding to certain development interventions, fail to include subjective well-being in their analyses, they neglect important priorities ranging from mental health to chronic pain. GiveWell itself did not participate in HLI’s analysis. “Ours is just one approach to giving among many,” Olivia Larsen, a philanthropy advisor at GiveWell, said in an email to Devex. “Charitable giving is not a math problem with a single correct answer, and we encourage donors inspired by many different missions to consider evidence and impact and give generously when they find causes they believe in.” She also noted how research from HLI inspired Change Our Mind, a contest to solicit external criticism of GiveWell’s cost-effectiveness analysis. Challenging assumptions The main pushback Plant hears is that feelings are too subjective to measure or that happiness doesn’t matter. For example, critics of HLI’s approach have noted that it’s hard to be happy when you are sick, hungry, or otherwise struggling to survive. Plant said he does not disagree, but added that well-being questions capture how people feel, from very good to very bad, as well as how circumstances related to health and income — such as hunger — affect that. “When I talk about improving happiness, that means removing suffering and increasing enjoyment, not just the latter!” he said in an email to Devex. “In practice, efforts to improve happiness focus on removing misery — that's what our charity recommendation does.” Since wrapping up its 2022 charity recommendation, HLI is now starting the process of analyzing more interventions that offer the most cost-effective ways to make lives happier. In the meantime, Plant is generating some debate, in hopes that his ideas won’t always be so controversial. “The thing that puts me out of business is that’s how people think about measuring impact,” he said. “If that happened, we wouldn't need to exist.”