Our current top-rated charity is VillageReach. In 2010, we directed over $1.1 million to it, which met its short-term funding needs (i.e., its needs for the next year or so).

VillageReach still has longer-term needs, and in the absence of other giving opportunities that we consider comparable, we’ve continued to feature it as #1 on our website. However, we’ve also been focusing most of our effort this year on identifying and investigating other potential top-rated charities, with the hope that we can refocus attention on an organization with shorter-term needs this December. (In general, the vast bulk of our impact on donations comes in December.) We believe that we will be able to do so. We don’t believe we’ll be able to recommend a giving opportunity as good as giving to VillageReach was last year, but given VillageReach’s lack of short-term (1-year) room for more funding, we do expect to have a different top recommendation by this December.

We haven’t been updating our rankings continuously; we prefer to do very deep investigations of top contenders, and aim for an all-at-once refresh in time for December. This is largely because we’ve continued to raise the bar for what it takes to become a top charity. For example, since we’ve found field visits to be useful, we now have a strong preference to avoid naming a charity “top-rated” before we’ve seen its work on the ground (for this reason, staff is currently split up between Malawi and India, visiting contender charities; we will post notes and pictures after we return and get the content approved by charities we’ve visited). More generally, we are looking to examine a charity from many different angles and have a high level of confidence before we start directing significant funds to it.

Bottom line - by December, we will have a new “top-rated” charity. This is not a “demotion” of VillageReach; rather, it reflects our success in directing enough funding to it to close its short-term gap.

When someone asks me what makes GiveWell different from other third-party charity evaluators, I often answer by listing all the things we’ve done in order to investigate our current top-rated charity, VillageReach.

• We’ve done extensive background research on international aid and argued for key takeaways such as the overall promise of international aid for donors, the particular promise of health aid, and, within health aid, the particular promise of immunization-focused programs (such as VillageReach’s).
• We’ve written up a comprehensive discussion of VillageReach’s different projects, the funders behind them, the funds allocated to them and what we know about their impact.
• We’ve examined VillageReach’s evidence for the effectiveness of its pilot project, listed and examined possible objections to this evidence, discussed these objections with staff and investigated staff’s responses.
• We’ve created multiple estimates of how much VillageReach’s activities cost per life saved.
• We’ve closely tracked VillageReach’s room for more funding and its expansion plan, and continually updated our analysis on these points as its plans and revenues have changed.
• We’ve spent several days with VillageReach staff in Mozambique (the site of its major project) and posted notes, reflections, pictures, and audio recordings of conversations.
• We’ve also visited VillageReach’s U.S. headquarters in Seattle, and we will soon be visiting the other site where VillageReach has a significant field presence, in Malawi.
• We’ve spoken to other funders of VillageReach, and to funders who have considered but ultimately declined funding VillageReach.
• Starting this year (following our moving over $1 million to VillageReach in 2010, most of it in late 2010), we’ve been posting quarterly updates on the progress of VillageReach’s work in Mozambique and the extent to which more donations are needed/warranted. We intend to continue these updates even if we stop recommending donations to VillageReach (which we expect to do shortly given the fact that it does not currently have a short-term funding need), since we want to learn how our recommendation turns out.

All in all, we’ve spent hundreds of hours examining VillageReach - yet we still feel very far from being “settled” on the question of how promising its activities are. Like any outstanding opportunity to do good, VillageReach’s work involves large and complex challenges. We’ll never have 100% of the relevant information or 100% certainty on its merits, but because we’ve recommended VillageReach so highly and moved over $1 million to it, it’s important to us that we do the best we can.

It isn’t realistic to do this kind of in-depth investigation for thousands (or even hundreds) of charities. We have to save our resources for the most promising charities if we want to have a reasonable level of confidence in our top recommendations. That means we take shortcuts on less promising charities, and we don’t put in the work it would take to distinguish between “worst,” “bad,” “mediocre” and “decent” groups - we’re laser-focused on the ones that we consider “best.”

Other independent charity evaluators tend to measure themselves by how many charities they rate. They exist largely for donors who already know where they want to give, and want a basic legitimacy check before they finalize the donation. To accommodate this goal, these other evaluators need to be far less thorough and more simplified than we are. That means - in our view - that they have no realistic chance of ever meaningfully rating impact, i.e., the degree to which a charity is succeeding at its mission.

GiveWell isn’t for everyone. Donors looking to check the charity they already want to give to are better off with other resources. But for donors who don’t already have a charity in mind and are looking to maximize their impact, we don’t know of any other group that provides a comparable product.

We’re starting a new initiative, GiveWell Labs, an arm of our research process that will be open to any giving opportunity, no matter what form and what sector.

This post lays out, very broadly, what qualities we are looking for in giving opportunities. Future posts will elaborate on each of these criteria, and we will also discuss how we think these criteria apply to specific areas of philanthropy. Readers will hopefully be left with a strong sense of our beliefs and biases and what we’re looking for.

The main things we’re looking for in a giving opportunity are:

1. Upside: we’d prefer to fund projects that have the potential to go extremely well. Projects aiming to demonstrate a model that can be scaled up, generate new scientific knowledge that can be used by many others, or put a program in place that eventually becomes self-sustaining independent of philanthropic support all have “upside.” Simply aiming to deliver insecticide-treated nets using established delivery methods does not have much “upside” (though it may score well on many of these other criteria).
2. High likelihood of success: we’d prefer to fund projects that are very likely to do a respectable amount of good per dollar. The “evidence base” of a project - i.e., the set of past well-understood events that can be used to put its likelihood of success in context - is key here. Obviously this criterion will often be in tension with the “upside” criterion; the ideal for us is a project that has both, i.e., a project that’s both very likely to do some good and has some possibility of doing enormous amounts of good (we think that giving to VillageReach in 2010 fit into this category).
3. Accountability. We’re OK with funding a project that might fail, but it’s very important to us that we be able to recognize, document, publicly discuss, and learn from such a failure if it happens. We thus have a strong preference to fund projects with specific and meaningful deliverables that will give us a strong sense of whether things are going as hoped (as well as permission to publish updates on these deliverables).

   We are relatively new to giving and plan to be doing a lot more of it in the future, so making sure that early projects are learning opportunities is crucial.

4. People we’re confident in. We prefer to fund projects where we are impressed by and confident in the people involved. However, our take on how to evaluate people seems to be different from that of some other funders; we’ll elaborate in a future post.
5. Room for more funding. We prefer to fund projects that would not happen without our funding. This means that we aren’t actually looking for the “best ways to spend philanthropic funds”; we’re looking for the “best ways to spend philanthropic funds that aren’t already on the agendas of other funders.”

We don’t have an explicit formula for weighing the above criteria above against each other. Broadly speaking, we’d prefer to fund an opportunity that is strong on all of the following: (a) at least one of #1 and #2; (b) at least one of #3 and #4; (c) #5. (Note that we do not feel the approach of estimating ‘expected good accomplished’ for each project, and simply ranking by this metric, is a good way to maximize actual expected good accomplished; for more, see the body and comments of a recent post on expected-value calculations.)

One more consideration is leverage: we prefer projects where our funding mobilizes more funding from other givers as well, thus multiplying the impact of our funds in some sense. However, we think this is far less important than the criteria listed above. We’d rather fund a great project all on our own, and leave other funders to spend on their own projects, than get a 5:1 or 100:1 funding match from others on a project that is weak on the above criteria.

If you think we’re missing any important impact-related criteria, please let us know.

In addition to evaluations of other charities, GiveWell publishes substantial evaluation on itself, from the quality of its research to its impact on donations. This year, we have added quarterly updates regarding two key metrics: (a) donations to top charities directly through our website (b) web traffic.

Money moved

By “money moved” we mean donations to our top charities that we can confidently identify as being made on the strength of our recommendation. This update focuses only on “money moved” that comes through GiveWell’s website; we’ll report on all donations due to GiveWell’s research at the end of the year (when the majority of large gifts occur).

While money moved through the website is only a fraction of overall money moved (and is also far greater in December than in other months), we believe this is a meaningful metric for tracking our progress/growth (as opposed to overall influence).

The charts below show dollars donated and the number of donations by month. Overall, growth in 2011 has been strong.

We report annually money moved to each of our recommended charities, but we don’t plan on including this information in quarterly reports because (a) there are some donations that have been made but we can’t yet to attribute to an organization; (b) overall we don’t feel these figures are very meaningful or good predictors of what the year-end allocation will be.

Web traffic

The table below shows quarterly web traffic to GiveWell’s website.

The charts below show our web traffic over time, including the latest quarter.