A good name might be rational Altruism because in practice these people are from the rationalist movement and doing Altruism, or what they feel is Altruism. But the "rationalist" title suffers from similar problems.
They might have lost the plot somewhere along the line, but the effective altruism movement had some good ideas.
Color me unconvinced. This will work for some situations. At this point, it's well known enough that it's a target that has ceased to be a good measure (Goodhart's Law).
The usual way to look at this is to look at the percentage of donations spent on administrative costs. This makes two large assumptions: (1) administrative costs have zero benefit, and (2) non-administrative costs have 100% benefit. Both are wildly wrong.
A simple counterexample: you're going to solve hunger. So you take donations, skim 0.0000001% off the top for your time because "I'm maximizing benefit, baby!", and use the rest to purchase bananas. You dump those bananas in a pile in the middle of a homeless encampment.
There are so many problems with this, but I'll stick with the simplest: in 2 weeks, you have a pile of rotten bananas and everyone is starving again. It would have been better to store some of the bananas and give them out over time, which requires space and maybe even cooling to hold inventory, which cost money, and that's money that is not directly fixing the problem.
There are so many examples of feel-good world saving that end up destroying communities and cultures, fostering dependence, promoting corruption, propping up the institutions that causing the problem, etc.
Another analogy: you make a billion dollars and put it in a trust for your grandchild to inherit the full sum when they turn 16. Your efficiency measure is at 100%! What could possibly go wrong? Could someone improve the outcome by, you know, administering the trust for you?
Smart administration can (but does not have to) increase effectiveness. Using this magical "how much of each dollar... ends up being used to fix some problem" metric is going to encourage ineffective charities and deceptive accounting.
As someone who has occasionally given money to charities for homelessness and the like I don't really expect it to fix much. More the thought that counts.