The man who gives away a third of his income

Would you give up a luxury to save a life?

Toby Ord has been giving away a third of his income for quite some time. A 33 year old academic at Oxford, he allows himself £18,000 a year, and donates the rest to charity.

"I’d always been idealistic about helping others", he says. "People would say “if you think that why don’t you give all your money to people in poor countries?" I think this was meant to make me shut up."

Instead he started giving away a large sum each year, and in the process set up a campaign - Giving What We Can - to encourage others to give away at least 10 per cent of their earnings.

Ord's subject is philosophy, and he came to the decision in a philosophical way. "I was writing on the subject of luxuries, and I came across the question of whether we should forgo a luxury if it would save a life. I realised this decision happens in our lives all the time."

"I was reading [the philosophers] Peter Singer and Thomas Pogge. The two of them think furiously about the problems of the world today. They both took their ideas very seriously and gave away a large proportion of their incomes. I decided I was going to make a commitment to give money to poor people."

To his surprise, people soon contacted him to see if they could do the same thing - and Giving What We Can was born.

"I'm not a natural leader for such an organisation", Ord says, describing himself as "more of a theoretician". But he has a very clear vision for the project.

"For me it [giving away a large percentage of income] doesn’t seem too odd. We literally have a choice to save hundreds of lives."

Yes, but giving money to charity never seems quite as straightforward as that. Can we ever be sure that what we give is really saving a life?

He agrees that would be more motivational if there was a "clear line of operation", and that the path from your wallet to saving someone's life can sometimes look "messy". "But if your money goes on, say, 200 mosquito nets in a malarial area there is no question. You will save a life."

What about the horror stories, the charity money that never makes it, the corrupt organisations that divert aid to their own ends?

"There are lots of rather garbled stories about problems with aid. These are bit stupid. The whole of the world is paying billions of dollars in aid, and people point to one or two things that go wrong. It is quite easy to find these problems which then act as excuses for not giving", he says.

"There is a perfect storm of excuses for forgetting about charities."

He admits that some charities are more effective than others, though.

"Charities can often benefit from thinking of effectiveness more. One of the targets for criticising them is the amount of money that goes into  administrative costs – but this is a bad measure of ineffectiveness - an organisation might need that level of spending on admin. I do think organisations should think about how they can help people more. There is a big academic literature on this. They should focus on outputs, and  not get hung up on brand – for example they should be prepared to  change the disease they are working on, if they could help more people that way."

French beggars. Photograph: Getty Images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR