Of the money moved to our top charities through our website in 2010, 25% was on December 31st alone. We know that lots of people will be looking to make last-minute donations.

If you only have five minutes but you want to take advantage of the thousands of hours of work we put into finding the best giving opportunities, consider giving to our top charities. They have strong track records, accomplish a lot of good per dollar spent, and have good concrete plans for how to use additional donations.

A couple of things to keep in mind:

• After you give, spread the word. This is the perfect time to remind people (via Facebook sharing, tweeting, etc.) to give before the year ends. And people making last-minute gifts are likely to be receptive to suggestions.
• If you have any questions, we’re here to help. We should be available by phone for most of the day, and responding to email when we’re not. (See our contact page). Our research FAQ may also be a good resource.

We haven’t written much about mega-charities: extremely large international charities (budgets of $250+ million per year) carrying out a very wide range of activities, and commonly recognized as household names. We’re thinking of groups like UNICEF, Oxfam, Mercy Corps, Catholic Relief Services, Save the Children, World Vision, and CARE.

The main reason we haven’t written much about these groups is that we still know very little about them. They tend to publish a great deal of web content aimed at fundraising, but very little of interest for impact-oriented donors. On the occasions when we’ve engaged with these groups, we’ve come away with the feeling that they engage in a wide variety of activities, and we can’t get a concrete sense of (a) the specifics of the activities; (b) the organization-wide track record; (c) likely uses of additional funding. (We wrote in 2007 about our inability to put together bird’s-eye views of their activities).

Below are general impressions from our limited information on, and interactions with, these groups. Note that in preparing this post, we examined the websites of the 7 organizations named in the first paragraph, looking for whatever information we could find on specific projects (as opposed to broad characterizations of activities), results (technical writeups, not narratives), and financial information (any budget breakdown by project or program type, or revenue source - we tabulated our findings in this spreadsheet).

Read the rest of this entry »

Elie recently highlighted his doubts about our top charities, and a commenter responded:

Of course one ultimately never knows how much good a charity or any given donation will do. Bednets might end up saving the life of child who grows up to be the next Nelson Mandela – or the next Saddam Hussein. Everything we do is a gamble, but I’d like to make the best ones I can. These two charities look like good gambles.

I agree completely, but I’m still glad Elie emphasized these risks. Because in one specific way, supporting our top charities is riskier than supporting any other charity: if something goes wrong with one of our top charities, it will come out promptly and publicly.

Read the rest of this entry »

Cari Tuna is a member of GiveWell’s board of directors and president of Good Ventures, a foundation in the San Francisco Bay Area which she created with her partner Dustin Moskovitz earlier this year. Previously, Cari was a reporter for the Wall Street Journal.

Today, I’m writing to share that Good Ventures is donating $500,000 to the Against Malaria Foundation and $250,000 to the Schistosomiasis Control Initiative–GiveWell’s #1 and #2 charity recommendations this giving season, respectively. Over the coming months, Good Ventures also plans to donate to the six nonprofits that GiveWell recently named “standout organizations”: GiveDirectly, Innovations for Poverty Action, KIPP Houston, Nyaya Health, Pratham and the Small Enterprise Foundation.

I first learned about GiveWell about a year ago while preparing to transition from reporting to working in philanthropy full time. I read about the organization in Peter Singer’s The Life You Can Save and, around the same time, met co-founder Holden Karnofsky through a mutual friend. Right away, I was struck by the rigor of GiveWell’s research, its commitment to transparency and the volume of thoughtful commentary about the nonprofit sector it already had produced in just three years.

In April 2011, I joined GiveWell’s board. Since then, I’ve been increasingly impressed by the co-founders’ dedication to their work, humility about what they know and what they don’t, and ability to adapt the GiveWell model as they learn.

As a new foundation, Good Ventures’ top priorities are 1) to learn how to do as much good as possible with the resources at our disposal and 2) to become a great resource for other people who care about improving our world. We plan to make a number of carefully selected grants over the coming years in order to learn about promising solutions to the world’s most formidable problems. Over time, we hope our work contributes to significant, sustained reductions in poverty and improvements in quality of life for disadvantaged people around the world.

To that end, we see huge potential in encouraging greater effectiveness and transparency across the social sector, in particular by helping to foster a culture in which individual donors demand evidence of impact from the nonprofits they support.

One simple idea–that all donors should be at least as thoughtful about our philanthropic investments as we are about our financial investments–has transformed the way I think about giving. If you’re reading GiveWell’s blog, this probably isn’t news to you. But it might be news to your friends, parents, siblings, children or coworkers. So this giving season, please spread the word, and let’s transform the culture around giving, one heart and mind at a time.

Note: While Good Ventures does not accept unsolicited requests for funding, we do consider all of GiveWell’s recommended charities–and not just its #1 recommendation–for substantial grants.

There’s no question that “giving a goat” has caught on, as a way of getting people to support charity - rather than consumer goods - for the holidays.

I certainly don’t need an iPad or a new TV, and I encourage friends and family to make donations in my name rather than sending me gifts. However, I’d rather not get a “goat” because:

• I’d have unanswered questions about the effects this gift might have. Will the person who receives the goat be well-suited to receive it? Will they mistreat the goat? Will the goat produce enough to justify their investment in it? Will the local community perceive unfairness in who is chosen to receive the goat?

  We’ve found livestock-gift programs to be among the more poorly documented developing-world aid programs out there. We have little sense of whether and when these concerns apply.

• The model of giving out goats fundamentally doesn’t make much sense to me. We wrote in 2009 that giving out livestock seems to have the same challenges as giving out cash, plus additional challenges. This isn’t to say that it’s never a good idea. But supporting a model with such fundamental questions would make me uneasy unless I saw those questions being addressed in an intelligent, context-specific way. (Note that there is a charity giving out cash.)
• It’s not really a goat anyway. See our 2009 discussion of donor illusions: chances are, the fine print says you’re really just giving a donation to the charity, not any specific goat. Matching your dollars with a specific goat doesn’t (in our view) really make sense logistically, so we’re glad that it isn’t actually happening.
• I think there are much better ways to help people with donations. This is the most important point for me. Maybe “giving a goat” really does help people - but I don’t believe it helps them as much as possible given our other options. GiveWell’s top charities carry out proven, cost-effective interventions; they have strong track records; they have better transparency and accountability than any livestock-focused programs I know of. They can generate incredible value for your money, such as saving a life for $2000 or keeping someone worm-free throughout childhood for $5. Those are our best evidence-based estimates (the details are all online), not marketing pitches.
• Giving a goat means supporting the best story for donors, not the best solution for the people I want to help. If you agree that there are better ways to help people than “give a goat,” you should be worried about the message you send when you opt for the latter. To me, the whole point of “giving to charity for the holidays” is to take the focus off of our own wants and put it on helping people who have much more fundamental needs. This goal is cheapened if we support any charities other than the best we can find.

We like the idea of giving to charity in someone’s name as a gift for the holidays. We’ve recently made this possible for our top charities. We just think these gifts should be made to the best charities possible.

My favorite cause used to be U.S. equality of opportunity. But over the years since we started GiveWell, I’ve become more and more convinced that the best giving opportunities for individual donors lie in the area of global health and nutrition.

Fundamentally, this area stands out because it involves a lot of interventions that have measurable, demonstrable, quantifiable benefits, yet also haven’t been funded to reach everyone who can benefit from them. (See our list.) It’s the only aid area I know of fitting this description. This has made charities working in this area a good fit for our criteria.

One might retort that this just shows our criteria to have the problem of focusing on what can be measured, rather than on what’s best, but I would disagree. I think that there are good reasons to believe that the cause of global health and nutrition really does contain the best - and not just the most easily understood - giving opportunities.

• Global health and nutrition interventions have the most impressive track record in international aid, with the possible exception of funding scientific research. I believe (though we are still investigating this) that the same holds for aid in general. To some extent this may be an artifact of how measurable the goals are, but it’s still a point in this cause’s favor.
• Global health and nutrition interventions are incredibly cheap on a per-person basis. We don’t have “cost per life saved” type figures for any programs outside of health, largely because the effects of these programs aren’t well-known enough. But consider that
  • An insecticide-treated net costs under $6, and a deworming treatment costs around 50c - these figures include all shipping costs, administration costs, etc. By contrast, GiveDirectly’s cash transfers cost $500 per household per year; the promising Ultra Poor Graduation program appears to have similar costs (PDF, pg 3); educating a child, even in the poorest countries, costs $50+ (sometimes much more) per year (PDF pg 39); even in microfinance, $12-17 per year is spent in grants alone for each current person who is served by microfinance. Programs that don’t target the poorest of the poor - such as U.S. programs - cost far more. These are far from apples-to-apples comparisons, but my intuition is that the health interventions compare favorably on “quality-of-life impact for the money.”
  • Speaking more informally, on our site visits it has struck me how lean health interventions often are. Because the evidence is so strong, people generally know exactly what has to be delivered, and how, in order to benefit people. This means they can design programs to deliver these crucial items and services with maximal efficiency. Other programs are much more intensive - again, for not clearly more life benefit. This observation makes the above point make more sense to me: health interventions are cheap because they are small and precisely defined but involve major known benefits.
• Health and nutrition programs are particularly good at having clear goals and accountability, leading to learning over time. Because benefits can be quantified and predicted, targets can be set, and adjustments can be made when they’re not met. We’ve been placing more emphasis on the criterion of accountability, i.e., the likelihood that giving will lead to learning. Health and nutrition interventions stand out in terms of the likelihood that giving will lead to learning.
• Room for more funding is relatively easy to gauge in the area of health and nutrition. We believe that one of the thorniest issues that a donor has to contend with is that of room for more funding. In an area like funding scientific research (which otherwise has much to recommend it as a charitable cause), it’s particularly hard to answer the question, “How does the value of the next study on the priority list - the one that no one else has funded and that my funding will make possible - compare to the value of the average study overall?” This isn’t nearly as much of an issue when delivering global health and nutrition interventions; the expected benefits of running an additional project tend to be easier to quantify.
• Health and nutrition are fundamental to quality of life. In my view, the value of additional education - or additional income - depends a lot on the context, but health and nutrition are fundamental and universal needs. In addition, with economic empowerment or education interventions, I tend to worry about the difficulty of distinguishing “zero-sum benefits” (helping some people at the expense of others) from “positive-sum benefits” - a well-intentioned business training or education program could end up simply transferring power/wealth from some people in a community to others, and this could be very difficult to distinguish from actually improving these people’s productivity. I feel this is much less of a concern when it comes to health and nutrition.

What problems are best suited to having money thrown at them?

I’m not arguing that health and nutrition are the most important issues in the world. There are many changes in the world that I’d like to see and that I believe are worth fighting for. There are many fantastic uses of money outside the sector of global health and nutrition; many involve taking risks on building institutions and producing public goods. But when thinking about how individual donors can do good, my mind jumps to the easiest ways to have impact without having special insight - the problems that are most likely to be solved by “throwing money at them.” When this is the goal, being able to measure, demonstrate and quantify one’s impact is enormously helpful.

According to our analysis, ~$5 can buy a bednet or 10 years of deworming - either of which will have a substantial, quantifiable, definite impact on quality of life. That can empower a person who is better positioned than you are to address many of their other problems. I believe that for a donor interested in making the world better just by writing a check, this sort of value-for-money may not be available in any other cause.

We feel very good about recommending that donors give to our top charities, and they’re where all GiveWell staff are – happily and confidently – giving our personal donations this year.

That said, we’re skeptical by nature, and internally, we keep thinking about and discussing the ways in which our top charities might not work out: i.e., the scenarios/circumstances in which giving to these charities doesn’t accomplish what we expect or our views change substantially in the next year about what donations to these charities accomplish.

If I were going to write the equivalent of a “dissenting opinion” for our top charities, it would be based on the issues below.

AMF: insecticide-treated net distributions

Our #1-ranked organization is the Against Malaria Foundation (AMF). Our recommendation relies on the fact that there have been numerous randomized controlled trials (RCTs, i.e., high-quality studies) tying net distributions to reductions in childhood mortality, but there’s a question of external validity for these RCTs. Is it reasonable to assume that net distributions of the type AMF carries out will have the same sort of effects they’ve had in the studies? There are a couple of reasons to question whether they will.

In our analysis of the RCTs, we found one trial where researchers conducted random spot checks to people’s houses at 5 in the morning to make sure that nets were being used. In another case, researchers, themselves, installed the nets in participants’ homes. In general, we had the impression that researchers were working hard to make sure that nets were used as intended. While AMF’s distributions (and large-scale distributions in general) involve some measures for community education and monitoring of usage, we don’t think they’re comparable to what was done in the RCTs.

For nets to be effective, people need to use them appropriately and consistently. It’s not hard to imagine someone receiving a net one day, but over time not consistently using it well.

The best available data seems to indicate that on a large scale, people use their nets relatively consistently - in line with the usage rates seen in the RCTs (which did not, themselves, reach 100% usage). But the best available data isn’t as robust as we’d like it to be, particularly when it comes to the distinction between “reported usage” and “actual usage” (our best attempts to adjust for this indicate that it is not a major issue, but we aren’t working off much information).

Another way in which large-scale net distributions could fail to live up to the small-scale studies has to do with malaria transmission dynamics. It’s possible that mosquito populations and transmission dynamics have changed in the several years since the last small-scale study was done; it’s possible that the studies were done in areas that were unusually well-suited to seeing big drops in malaria come from nets; it’s even possible that widespread use of nets could lead to increasing resistance in mosquito populations over time. We haven’t seen any strong reasons to believe that any of these things are the case; in particular, we don’t believe that data on transmission dynamics is strong enough for the small-scale studies to have picked out particularly favorable settings. But it’s a definite point of uncertainty.

One point of reassurance here: as we observed previously, the malaria control community spends a huge amount of money on distributing nets. So if one of these concerns ends up being a huge problem, finding out about it (as we hope AMF will) could be hugely beneficial in and of itself, by helping the malaria community better execute distributions and/or better allocate resources.

SCI: deworming

Our evidence review of deworming concludes that there isn’t a particularly strong case that deworming has a significant impact on individuals’ life outcomes. The evidence boils down to (a) two well-respected but far-from-ironclad research papers on the long-term effects of deworming and (b) a large degree of evidence that deworming has a consistent (but limited) impact on haemoglobin levels (which are measured to determine anemia). Our positive view of deworming stems from the fact that although there is limited evidence of quality-of-life significance, the intervention is so cheap that it is likely to be a relatively good buy and may be a great buy.

Our view of deworming is highly susceptible to change based on evidence. A single pre-registered, large-sample RCT that did not find significant impacts on development for dewormed children would significantly adjust our view about the likely impacts of deworming. Combing through the data of one of the existing papers on deworming – which we plan to do in 2012 – could easily adjust our view of the intervention. In addition, despite the fact that SCI’s evidence of impact is as strong as we’ve ever seen in a charity, we still have our doubts about it.

Given this situation, it’s not hard to picture a world in which our view shifts substantially by the end of next year.

Both organizations

Both AMF and SCI partner with governments and NGOs to implement their prorgrams. This means that neither is in complete control of their activities and they could run into problems caused by, among other things, (a) lack of funding for the components of their programs that they don’t directly fund (more on this in Holden’s recent post about charitable leverage) or (b) governments changing their minds about working with each. Note that SCI has already had one program (in Zambia) where results have been quite disappointing and data remains thin.

Difficulty in dealing with partners is a significant risk in aid, and one we’ve learned about this past year from some of the challenges VillageReach is facing in its scaleup in Mozambique.

Putting the dissents in context

The above concerns are very real, but they’re much smaller than the concerns we have for any other charity in existence.

Some seem to believe that concerns ought to be hidden from donors, to encourage them to give. This may make sense for many donors. When dealing with our own audience, we feel much better asking you to give with eyes wide open: recognize that there are no guarantees, but that the things your money can accomplish - in terms of improving others’ lives - are incredible. We think that’s more than enough reason to give without regret.

People sometimes ask us whether they should give now, or save their money and give (including the interest/returns they accrue on their money) later. We don’t think there’s a clear answer. Here are the major issues as I see them, when thinking about my own giving. Bottom line - my favored strategy at the moment is to give regularly (a set percentage of my income each year).

Will tomorrow’s giving opportunities be better than today’s?

GiveWell’s progress may lead to better giving opportunities in the near future. I believe GiveWell’s research is the best available for identifying great giving opportunities; but GiveWell is still a very young organization, and we still have a lot to learn. It’s very possible that we’ll find much better giving opportunites in the future.

On the flip side, our growth and learning depends on growing our money moved. Giving to our top charities today helps this happen.

None of the best giving opportunities I see today are guaranteed to be good opportunities next year. In some cases (particularly VillageReach in 2010), giving now may be crucial to an organization’s development. Even when this isn’t the case, there’s always the possibility that the organization will improve its fundraising - or make a contact with a large funder - in the future, affecting its room for more funding.

Economic growth, increased giving, and smarter giving may mean that giving opportunities are worse in the far future. We’ve written before about the idea that the more good is being done by others, the fewer opportunities you have to do a lot of good with your own giving. We hope to see a day where no one is so poor/underserved that you can save their life by giving few thousand dollars.

Do I “earn interest” by saving now and giving later?
If I save, I earn interest/returns on my money; but if I give, the good I accomplish may “earn interest” too. Ideally, donations give people more power over their lives, which in turn leaves them better positioned to help others (in their community or elsewhere). We take seriously the idea that most problems may be better addressed by local communities than by outside aid; we focus our outside aid on the problems we feel it is best-suited to address.

In general, I would guess that the conceptual “interest rate on empowering people” is higher than the interest rate you earn when you save. This is because the same basic mechanism underlies both (having more resources today can allow a person to generate more resources for the future), but savers get paid directly for providing resources, while donors don’t (thus, there is likely more “unmet need” for donations than for savings). Given today’s interest rates, it seems particularly likely that the “interest rate on empowering people” is higher than the interest rate you earn when you save.

Other issues

Giving now means “putting my money where my mouth is.” I believe that having my own money at stake helps me think harder, more concretely, and more realistically about where I should be giving and what results I’m expecting from my giving. This in turn helps me learn over time.

I think the same applies, to a lesser extent, to donors who are relying on GiveWell’s research rather than doing their own - giving now may help you think through what questions to check GiveWell’s answers to, and consider how you feel about relying on GiveWell’s research vs. going in another direction.

If I postponed substantial giving for a long time, I’d worry that I was giving myself an excuse not to give at all.

Giving regularly and predictably is more helpful to the group(s) I’m supporting. In general, people tend to give the same donations each year,* and I believe that charities often plan around this fact. (We certainly do, both when considering our operating expenses and when considering our money moved.) Therefore, if you give irregularly (particularly if your donations go down over time), you are sending an inaccurate message to a charity and may be negatively affecting its ability to plan, unless you take specific efforts to communicate your plans (and even when you do so, this may create extra hassle for the charity).

Bottom line. In general, my preferred approach is to give relatively regularly; I think there are substantial disadvantages (discussed above) to deviating from this approach in either direction (giving a lot now and only a little later, or giving a little now with the intent of giving a lot later).

At some point I may spot a giving opportunity that seems like a true outlier, and focus my giving on that opportunity rather than giving regularly over time. To give one example of this - when we started GiveWell, we believed that our startup funds were critical, and thus we encouraged donors to give a large amount immediately even if it meant abstaining from giving for the next year or two. Several did exactly this, and I think in hindsight it was the right decision (their 2007 gifts were in fact critical for our getting off the ground, in a way that they wouldn’t have been a year later). So I do think there can be good reason to “over-give” now and hold back later, or to save now and give more later. But right now I don’t see any compelling argument for deviating from “give a set percentage of my income each year.”

*Our experience suggests this; the Money for Good study suggests it as well (see page 16).

This time of year, just about every news agency publishes an article titled something like “6 tips to give wisely this holiday season.” (Examples here, here, and here.) The advice they give makes sense to a degree – make sure the charity isn’t a scam, check that the CEO’s salary doesn’t account for 90% of the charity’s budget, etc. - but it’s really targeted at someone who’s aiming to not waste his/her money. For donors interested in accomplishing the most good possible with their money, here are 6 tips to help you take your giving to the next level.

1. Be proactive. If you find yourself considering a gift to a charity that called you on the phone, you’ve already lost most of the battle to do as much good as possible. Your dollars will go furthest if you set time aside, think about all your options, and go find the best charity for your values. If you wait for charities to come to you, you’re just rewarding the ones that are most aggressive - not the ones that do the most good.

2. Be open minded about the cause you’re going to support. The amount you can accomplish with your donation varies widely from cause to cause to cause. We’ve written about this before in the context of giving to charities that work overseas instead of those that work domestically.

But, even if you’re not ready to shift your giving that much, you can improve your impact just by broadening your scope. Are you interested in supporting education in the US? Consider organizations that work outside your community as opposed to just considering local ones. Are you interested in supporting your local community? Consider multiple different categories of organization - job training programs, schools, food banks, etc. The more you’re open to different options, the more likely you’ll be to find and support outstanding – not just “acceptable” – organizations.

3. Ask organizations to make a case that their programs work. For example, if you pick a school, ask them why they think they’re improving academic performance for their students; ask them why they think they’re doing a better job than a similar school you could support; ask them for any data they have that supports their case. For more ideas about what to ask, refer to our do-it-yourself charity evaluation questions.

4. Ask organizations how they’d use additional funding. It’s one thing for an organization to have accomplished great things in the past. But, if you’re giving today, you really need to focus on what they’ll do in the future and how your donation (and other future donations) will make a difference.

Some organizations may have a pressing need for funds such that additional money this year will allow them to expand services. Others may already have enough in the bank such that your donation will only grow an already-safe level of reserves. Alternatively, the organization may be so small that money isn’t the bottleneck to expansion, and it can’t effectively expand even with more money.

We call this the concept of room for more funding, and it’s key to GiveWell’s assessment of our top charities.

5. When you give, give cash - no strings attached. You’re just a part-time donor, but the charity you’re supporting does this full-time and staff there probably know a lot more about how to do their job than you do. If you’ve found a charity that you feel is excellent - not just acceptable - then it makes sense to trust the charity to make good decisions about how to spend your money.

6. Check back a year later and see whether the organization met its commitments. When asking about the organizations about their room for more funding or evidence of impact, you (hopefully) heard about plans they had for the coming year. Check back to see how their activities - and results - match up.

These tips may making giving sound like a full time job. We think it is. You can leverage the work we’ve done, and save your own time, with a gift to one of our top charities. But if you’re interested in causes we haven’t been able to cover, the above tips will help you make the most of your generosity.

The Schistosomiasis Control Initiative (SCI) told us earlier this year that it had received a donation of praziquantel (the more expensive of the drugs it uses for deworming) from World Vision. Since it already has the drugs, donations can pay just for delivery costs. Thus, SCI observed, your gift is “leveraged” - $1 in donations buys more than $1 in health programming, since the drugs are essentially “free.”

The Against Malaria Foundation (AMF) in some ways achieves leverage through the opposite strategy. It doesn’t pay for the costs of distributing nets or even shipping nets - it only pays for the nets themselves. Partners are charged with raising funding elsewhere for shipping and distribution (though they are required to do these things; nets aren’t granted without a distribution plan in place). By adhering to this policy, AMF puts other funders - including some government agencies - in a similar situation to SCI’s donors: the nets are essentially “free,” so $1 from these agencies buys far more than $1 in health programming. Because of this dynamic, these other funders (AMF argues, correctly from what we can see) are happy to provide this funding - so the original donor’s gift is “leveraged” too (by buying just a net, the donor gets “free” shipping/distribution costs).

How far could this logic be extended? What if a charity first raised money for travel expenses, then went to another donor and raised money for field staff arguing that “travel expenses are essentially free,” then went to another donor and raised money for supplies arguing that “field staff and travel expenses are essentially free,” etc.? What if a charity went to 50 million separate donors, asking each to give $1 contingent on each of the other 49,999,999 giving as well, arguing that this created 50,000,000:1 leverage for each of the $1 donors?

We think that much of our discussion of donation matching applies here. If you take claims of “leverage” literally, you’re allowing other funders - the ones who gave pills, or nets, or covered distribution costs - to influence your giving merely through the structure of their gift. That in turn creates incentives for them to take gifts they would have made anyway, and structure them in a way that gets you to give more to the program of their choice. In fact, these other donors may even be taking advantage of you to pay for costs they would have been happy to cover themselves. Perhaps World Vision would pay for distribution, but knows that by giving “only pills” it can get others to pay for distribution. Perhaps AMF would pay for distribution if it had to, and doesn’t only because it believes it can get others to.

Understanding the true nature of leverage - who is the “leverager” and who is the “leveragee” - is difficult. When someone else is giving contingent on your giving, and this fact in turn influences your giving … sometimes this means that you’re getting them to give more (or differently) than they would have otherwise (in which case you’re the “leverager”) and sometimes it means the reverse (in which case you’re the “leveragee”). We don’t know of any easy/reliable way to tell which situation you’re looking at, and when.

With this in mind, our general principles for considering leverage are:

• You can’t take “leverage factors” at face value, for largely the same reasons that you can’t take donation matches at face value.
• It’s probably a good thing when the charity you support is engaging in some sort of “leveraging.” This means it’s putting thought into getting your funds to influence others’ funds. If you believe that you’re supporting the most impactful charity possible, this means that others’ funds may be moving from less impactful activities to more impactful activities. (Though the situation isn’t this simple: we believe that governments and other large funders often have a much better array of options for impactful giving than the individual donors we serve.)
• The exact relationship between the claimed “leverage” and your actual impact is very non-straightforward. It may seem that you have more “leverage” when your $1 causes someone else to spend $9, as opposed to when it gets someone else to spend 10c. However, in the former situation, there’s a much higher probability that you are in fact the “leveragee” - that the other funder would cover the other 10% themselves if it weren’t for you, and you’re just saving them money. In general, it seems to us that the higher your claimed “leverage,” the greater the probability that someone else is in fact leveraging you.

  If anything, we would guess that your true impact is higher when the “leverage” is well under 100% (i.e., the other funder is giving less than $1 for each $1 you give), implying that the other party is likely providing funding because of the “leverage” they attain rather than because they would want to fund the project on their own. Once you have another major funder covering a major chunk of the costs, it becomes more important to ask whether they would be willing to cover all of them if the “leverage” from you and similar donors weren’t available.

When we do cost-effectiveness estimates (e.g., “cost per life saved”) we consider all expenses from all sources, not just funding provided by GiveWell donors. For SCI, we count both drug and delivery costs, even when drugs are donated. (Generally, we try to count all donated goods and services at market value, i.e., the price the donor could have sold them for instead of donating them.) For AMF, we count net costs and distribution costs, even though AMF pays only for the former. In the case of VillageReach, we even count government costs of delivering vaccines, even though VillageReach works exclusively to improve the efficiency of the delivery system.

We consider this approach the simplest approach to dealing with the issues discussed here, and given our limited understanding of how “leverage” works, we believe that this approach minimizes the error in our estimates that might come from misreading the “leverage” situation. As our understanding of “leverage” improves, we may approach our cost-effectiveness estimates differently.

We know that donors love donation matching.* We know that if we could offer donation matching on gifts to our top charities this giving season, our money moved would rise. And we know that we could offer donation matching if we thought it was the right thing to do: there are donors planning six-figure gifts to our top charities this year who would almost certainly be willing to structure their gifts as “matches” if we asked. (It might not be possible to “match” all of our money moved, but we could almost certainly provide “matching” for a short period, which would motivate people to give during that period and would also provide us with some data on the impact of matching on our audience.)

But we’ve decided not to do this because we would feel dishonest. We’d be advertising that you can “double your gift,” but the truth would be that we just restructured a gift from a six-figure donor that was going to happen anyway. We’ve discussed whether we might be able to provide “true” donation matching - finding a donor who would give to our top charities only on condition that others did - but not surprisingly, everyone we could think of who would be open to making a large gift to our top charities would be open to this whether or not we could match them up with smaller donors. Ultimately, the only match we can offer is illusory matching.

I don’t deny that non-illusory matching may exist in some other circumstances. A couple possibilities:

• Coordination matching. A charity needs to raise a specific amount for a specific purpose. A large funder (the “matcher”) is happy to contribute part of the amount needed as long as the specific purpose is achieved; therefore, the matcher makes the gift conditional on other gifts.
• Influence matching. The matcher wishes both to support a particular charity and to encourage others to give to that charity. Therefore, the matcher makes a legitimate commitment to give only if others do, in an attempt to influence their giving.

In both of these cases, it may seem at first glance that a one-to-one match really does “double” your donation, but I don’t think it’s quite that simple.

Regarding coordination matching - I would guess it’s relatively common for a funder to say privately, for example, “I’ll give $100,000 if you can raise the remaining needed $900,000.” But there are a couple of problems when it comes to advertising this situation as a “match.” First, saying “every $9 you give will be matched with $1 from a major donor” wouldn’t be very psychologically compelling - matches rarely go below the 1:1 threshold. Second, even if the funder were providing enough for a 1:1 match, it still wouldn’t be quite true that each $1 was matched with another $1: the match would occur only in the case that the total amount needed was raised. So while “coordination matching” is a possibility, we would guess that it rarely explains the “each $1 you give will be matched by $1″ campaigns commonly used in fundraising.

Influence matching is something I think impact-maximizing donors ought to be concerned about. In the short run, influence matching makes it true that your $1 donation results in $2 donated to the charity in question. But it also means that you’ve let the matching funder influence your giving - perhaps pulling you away from the most impactful charity (in your judgment) to a less impactful one - just by the way they structured their gift. By giving, you are rewarding this behavior by the matching funder, and you may be encouraging them to take future unconditional gifts and turn them into conditional gifts, because of the ability to sway other donors.

Perhaps, rather than giving your $1 to the charity the matching funder is pushing, you should fight back by structuring your own influence matching - making a conditional commitment to the highest-impact charity you can find, in order to pull other dollars in toward it.

For the average donation match, it’s unclear to what extent the match represents illusory matching vs. coordination matching vs. influence matching. My guess is that coordination matching is by far the least common (since it requires such a specific set of circumstances to hold) and that illusory matching is the norm (since this is generally the easiest to offer, and since donors don’t tend to distinguish between the different types when they decide where and how much to give).

Corporate matching programs sometimes match only gifts to specific charities; in this case I think it’s best to think of them as “influence matching.” If the company offered matching to any charity (as some companies do) and/or simply made gifts to the charities of its choice, it would no longer be pushing its employees to support specific charities. If you are employed at a company offering matching only on specific charities, I recommend pushing for a change in policy (to unconditional gifts to charities and/or unconditional matching for employees, as other companies do) rather than perpetuating a dynamic where your company’s corporate philanthropy team decides where you give.

In general, I advise donors seeking to maximize their impact to simply support the most impactful charity possible, and not to factor in the presence or absence of donation matching either way. If you support a less impactful charity due to the presence of a match, you may be having more total impact, but you also may be having substantially less (in the case of illusory matching) and/or contributing a dynamic that leads to less effective giving broadly (a risk both for influence matching and illusory matching).

GiveWell may offer donation matching sometime in the future. If so, we will be explicit about whether it is influence matching or coordination matching (we wouldn’t be comfortable offering illusory matching, except perhaps as a joke - i.e., “If you’re thinking of giving to another charity just because of a donation match, let us know and we’ll get your donation to a top-rated charity matched”). If we do implement influence matching, it will be to (a) fully neutralize the effect of other matches on impact-oriented donors, further encouraging them to support the most impactful charities possible; (b) raise money from non-impact-oriented donors who are happy to have their donation “matched” despite the logic above.

*“Donation matching” refers to when a large funder offers to give $X to a particular charity for every $Y other people give - for example, “For every $1 you give to this charity, a large funder will contribute another $1, doubling your impact!” For more, see the 2007 study on donation matching by Dean Karlan.

We’ve recently published our updated charity recommendations, featuring two top charities (Against Malaria Foundation and Schistosomiasis Control Initiative) that score well on all of our criteria. In this post, we discuss how we decided which of these two charities to rank #1 and which to rank #2.

Both charities are executing health programs that deliver significant and very cheap help to people in the developing world. Both have strong track records and transparency, as well as concrete plans for how to use future donations.

Here’s what we see as the major relative pros and cons:

SCI has a more complete and convincing case that its past activities have had the intended outcomes.

• AMF has consistently gotten nets delivered to communities - and given the strong evidence on the impact of nets, this in itself is stronger evidence of impact than for nearly any other charity we’ve seen - but there are still some gaps in the picture. We aren’t sure whether, or for how long, nets are used properly, and we don’t have data on what has happened to malaria prevalence (though our research on nets in general has led us to believe that neither of these is a huge concern). AMF has made credible commitments to future data collection on both of these fronts (and has collected some data for the former).
• By contrast, SCI’s evidence shows substantial drops in disease prevalence. This evidence has some issues (which we discuss in the review), but overall we find it convincing.

This consideration is balanced somewhat by the fact that we are more confident in the quality-of-life significance of reducing malaria than of reducing parasitic infections.

AMF has more upside.

• It’s smaller, and appears to be earlier in its development (having just begun its first larger-scale distribution); the chance that GiveWell-influenced money can be crucial in its development is therefore higher.
• It’s working in an area - distribution of nets - where (a) an enormous amount of money is spent each year* (b) data on long-term usage and malaria prevalence following distributions still looks to us to be pretty thin. Well-executed and well-documented distributions could be valuable as pilots and as information for the hundreds of millions of dollars worth of other distributions going on.

We have more confidence in AMF as an organization. Both AMF and SCI are outstanding on this front: both are transparent and accountable with strong track records, and both have answered all our questions well. However,

• We’ve consistently (for more than a year now) found AMF noticeably easier to communicate with, and found it to address our concerns noticeably more clearly and directly. With AMF, we are more confident that we have gotten our questions fully answered, that we won’t later hear about something we should have heard about before, and that we will be able to learn about how our funds end up being used and whether things end up going well or poorly.
• SCI’s evaluation is outstanding, but may have been driven by its major funders (the Gates Foundation; DFID). With AMF, we are more convinced that the organization itself is committed to skeptical self-questioning, evaluation and improvement based on evaluation.
• Very broadly, all GiveWell staff agree that we have more general confidence in AMF’s operations and management than SCI’s. This is a completely subjective judgment call that isn’t attributable to any particular event - it’s just a general feeling based on the hours of conversations we’ve had with both organizations. This leads us to be more confident that AMF would make decisions we would ultimately agree with or understand in the face of new circumstances.

We are sufficiently confident in the people behind both SCI and AMF to feature them as top charities, but our confidence for AMF is higher, and if we kept this information to ourselves we wouldn’t feel that we’re telling donors the whole story. Ultimately, it’s hard to be 100% sure of how your money will be used before you give it; confidence in the people you’re giving to is an important factor.

We are more confident in malaria-related research than in deworming-related research. This is as topic we’ll be writing about more in the future. In brief,

• We have done extensive research on both nets and deworming. Studies on the former have consistently raised fewer unanswered questions and red flags than studies on the latter.
• Despite the work we’ve done, we still have many unanswered questions about both deworming and nets.
• We would guess that our unanswered questions will result in fewer negative adjustments for the nets, because we find the research - and by extension, the researchers - around nets to be more reliable.

The most important deciding factor for us comes down to a combination of cost-effectiveness and room for more funding.

• We believe that in general, the vast bulk of SCI’s expenditures go toward deworming children rather than adults (see the example of Yemen), and that this is a good thing because a major part of the case for deworming is the possibility of developmental impacts for people treated in childhood.
• We believe that deworming children is cost-effective - perhaps not quite as cost-effective (by our estimations) as net distribution, but close enough to make it a non-obvious call between the two.
• However, the activities that SCI would fund with additional dollars (in the range of what we’re likely to be able to send their way) look a bit different. Note that in Mozambique, the plan is to take children who have already been selected for planned every-other-year deworming and instead deworm them every year; we have little information to shed light on the likely marginal benefit here. Other potential activities include deworming selected and particularly at-risk adults. Overall, we feel that these activities will still accomplish substantial good, but that they’re unlikely to be as cost-effective as standard deworming of children.

Bottom line. SCI is among the best giving opportunities we’ve ever seen, and we recommend it to donors. However, GiveWell staff unanimously find AMF to be an even stronger opportunity.

There are obviously a lot of judgment calls here, and we are hoping to move substantial donations to each organization so that we can follow the progress of each and learn more for the future (we see this opportunity to learn as a major value in and of itself, in terms of making us better able to maximize the impact of future donations).

*See pages 12-13 of the World Malaria Report: in 2009-2010, the Global Fund and PMI alone spent ~$1.5 billion a year on malaria control, of which about 1/3 was for nets specifically.

We put a lot of effort into making our research process and reasoning transparent so that anyone can understand and vet the thinking behind our charity recommendations.

Consistent with this, we will be holding a conference call on December 8, 7p Eastern, open to anyone who registers via our online form. Staff will take questions by email and answer them over the conference line.

If you can’t make this date but would be interested in joining another call at a later date, you can indicate this on the registration form.

If you’re thinking of giving to one of our top charities this year, or you’re just curious about our thinking, we welcome you to join.

Register for the Dec. 8 GiveWell Conference Call

If you’ve already emailed us about your intention to attend, there’s no need to submit the form.