The GiveWell Blog

Allocation of discretionary funds and new recommendation for donors

Since we released our 2016 recommendations in November, we have received about $4.9 million in funding for making grants at our discretion. We noted at the time that we would use these funds to fill the next highest priority funding gaps among our top charities. We have now reassessed the funding gaps for our top charities and plan to allocate $4.4 million to the Against Malaria Foundation (AMF) and $0.5 million of the funding we received for granting to the Deworm the World Initiative.

Our updated recommendation for donors

We continue to recommend all seven of our current recommended charities as top charities and think all offer outstanding opportunities for donors to accomplish significant good with their donations.

We have updated our bottom line recommendation for donors seeking to follow our recommended allocation. We now recommend that donors give 100% of their donation to AMF, which will continue to have a pressing need for funding after the grant from GiveWell’s discretionary funds and after accounting for expected fundraising.

This is an update on the recommendation we made in November 2016 of giving 75% to AMF and 25% to the Schistosomiasis Control Initiative (SCI). We will update this recommendation again in November, and may do so sooner if we have new information that affects where we think additional donations would have the greatest impact.

We have not completed any updates on our standout charities, and that list remains the same.

Room for more funding reassessment

For this analysis, we asked each of our top charities how much they raised in total through December 31 (because we were asking in early February, this is the most up-to-date information we expected to be available) and compared this information, along with how much funding we have received that was donated to GiveWell specifically for each charity (rather than for granting at our discretion), to our previous expectations.

We did not ask each organization for the full details of how they would use additional funding, given that only a few months have elapsed since we last requested this information, but we did have conversations with AMF, Deworm the World, and SCI about how they would use additional funding.

(For additional explanation of what we mean by execution level gaps below, see this post. In short, an execution level 1 gap is the amount at which we believe the charity has a 50% chance of being bottlenecked by funding and level 2 is 20%.)

In short:

  • Deworm the World raised $0.53 million less than expected and has an execution level 2 gap.
  • AMF raised slightly more than expected, but continues to have a large execution level 1 gap.
  • SCI received $4.6 million less than the total we projected, which reflects both that we expected to allocate a portion of the discretionary funds we received to SCI and that other sources of revenue came in under our projections.
  • GiveDirectly raised slightly more than projected, but continues to be constrained by funding (it has a large execution level 1 gap) and told us that it has laid off some field staff as a result. GiveDirectly is also still in the process of raising funding for its basic income guarantee study, which begins this summer; it had projected raising the full amount by the end of February 2017.
  • We had less information with which to project revenues for the END Fund and Sightsavers’ deworming programs and Malaria Consortium’s seasonal malaria chemoprevention (SMC) program last year. We estimate that Malaria Consortium and the END Fund continue to have execution level 1 gaps and that Sightsavers does not have an execution level 1 or 2 gap for these programs.

More detail in this spreadsheet.

Why we selected this allocation

The decision to fill the remainder of Deworm the World’s execution level 2 gap was an easy one. This was a fairly high-priority gap for us in November and Deworm the World continues to be the strongest opportunity we’ve found, when weighing all factors other than room for more funding. It is the strongest on cost-effectiveness among our top charities and it is strong on monitoring and communication. Execution level 2 means that marginal funds are fairly unlikely (~20-30% chance) to be used or make a difference for planning this year, but we believe it is worthwhile to further decrease the chances that Deworm the World is bottlenecked by funding. If the funds aren’t instrumental this year, they will be used in future years.

AMF has a large remaining execution level 1 gap. From conversations with AMF early this year, our understanding is that AMF continues to have high-value opportunities that exceed its available funding. Below, we detail why we prefer further funding to AMF over further funding to other top charities.

Other possibilities that we decided against

SCI

SCI raised less funding than we projected in November and recently told us that $2.4 million in additional funding could be used to provide deworming treatments to more children in its next budget year (April 2017 to March 2018).

At the same time, SCI already expects to grow rapidly this year. SCI is allocating a higher portion of funding on hand to its next budget year (as opposed to holding more for future years) than we projected in November. Merck KGaA has recently increased the amount of praziquantel (the drug used to treat schistosomiasis) it donates annually, and SCI has decided to do all it can to deliver treatments in the next year, in order to demonstrate to Merck that deworming programs are capable of reaching the treatment targets.

Out of about $16 million it has received since late last year, both due to GiveWell and from other sources, $1.6 million is unallocated; our understanding is that SCI expects to use the remainder in the following year. We had projected, based on conversations with SCI, that it would spend about 60% of the funds it received from a GiveWell recommendation in the next budget year and hold the remainder to ensure that programs could be sustained in the following year. In other words, our expectation for $16 million in funding directed to SCI was that $9.6 million would be used in the next budget year, rather than the $14.4 SCI has allocated. As a result, SCI’s budget for direct implementation (excluding central costs) is expected to double in the coming year. We believe that if we gave SCI additional funding now, it would allocate the additional funding to expanding its budget further this year and we are concerned that with such rapid growth, program quality may suffer.

We are not opposed to taking risky bets when (a) the expected value is high; and (b) we expect to learn, after the fact, whether the results were in line with expectations. In SCI’s case, the expected value of additional funding, according to our cost-effectiveness analysis, is ~2x that of donations to AMF. Given the lack of precision in our model, ~2x is only a modest difference. And we believe that we are less likely to learn about significant problems in SCI programs than we are for AMF, Deworm the World, or GiveDirectly programs. This is because SCI has not conducted coverage surveys—the main tool it uses to monitor the quality of its programs—in a representative portion of the distributions it has funded, nor do we expect it to in the future. We worry that results may be systematically missing from the lowest quality programs: i.e., programs that struggle to implement distributions may also struggle to implement surveys. There are also methodological limitations to these surveys, particularly that they rely on children’s recall of the distribution several (~3) months after it has occurred.

The END Fund

The key differences in our assessments of the END Fund and SCI are that (1) we have seen monitoring results from SCI but not from the END Fund; (2) we do not yet have an estimate of the END Fund’s cost per deworming treatment, and therefore have not modeled its cost-effectiveness; and (3) the END Fund’s budget is set to increase more slowly in the coming year than SCI’s. On (1), as discussed above, we don’t find SCI’s monitoring results to be a major point in its favor. The main reason we decided against additional funding to the END Fund in this round is (2). There are reasons to expect that the END Fund’s cost per deworming treatment may be higher than SCI’s, such as donations being partially fungible with other neglected tropical disease programs being implemented by the END Fund—unlike SCI, which is focused exclusively on deworming—and the END Fund being a grantmaker itself to SCI and Deworm the World, which may increase the END Fund’s cost per treatment relative to SCI, since it is also following the work of the charities it supports—which may require additional funding. This may lead us to conclude that its cost-effectiveness is roughly on par with AMF, and worse than the other deworming organizations we recommend. We regret not recognizing earlier that the cost per treatment analysis could affect this allocation decision; it’s possible that we and the END Fund would have decided to accelerate the process of creating this analysis.

GiveDirectly

GiveDirectly is an outstanding organization and is currently very constrained by funding. We think GiveDirectly’s monitoring is stronger than AMF’s and that GiveDirectly would deploy funding more quickly, but we prefer to allocate the available funding to AMF because we believe that AMF’s work is significantly more cost-effective than GiveDirectly’s.

Malaria Consortium

We estimate that AMF and Malaria Consortium’s SMC programs are similarly cost-effective. We currently know considerably more about AMF’s track record and plans than we do about Malaria Consortium’s—we have followed AMF for about 8 years and Malaria Consortium for less than a year. We expect to learn significantly more about Malaria Consortium this year.

Sightsavers

Earlier this year, Good Ventures made a grant to Sightsavers to fully fill its execution level 1 gap on GiveWell’s recommendation. We now believe that Sightsavers has limited room for more funding for its deworming program. We had previously estimated a small execution level 2 gap, but no longer believe it has an execution level 2 gap. (The execution level 2 funding was for committing to three rather than two years of work in one country, however the work in that country is going forward with two years of funding on hand, so we believe it is of limited value to provide a third year of funding currently.) We have not funded execution level 3 for any deworming groups, preferring to fund AMF at that margin.

Comments

  • Chris on April 4, 2017 at 7:23 pm said:

    If we were to give to Givewell Discretion fund at this moment, when would we expect you to transfer the money out next?

    Love reading these write ups, thank you!

  • Natalie Crispin on April 10, 2017 at 5:22 pm said:

    Chris –

    Our schedule for granting out funds has been inconsistent recently due to a change in the accountants we work with. We plan to have a more regular schedule in the future and have not yet determined the granting schedule. My best guess is that funds donated now will be used to make grants in June or July.

  • David Albert on May 6, 2017 at 5:03 pm said:

    Thanks for your good work.
    Who would we talk to about getting Friendly Water for the World (www.friendlywater.net ) on your list? We have a strong record of robust cost-effective programming. We do need assistance with outside evaluation (we are young), but we already have quite a bit to report.

  • Natalie Crispin on May 8, 2017 at 11:58 am said:

    Hi David,

    Thanks for reaching out! We’d recommend reaching out to info@givewell.org with a description of your work; that will help us learn more about whether it might be a good fit for GiveWell’s application process. Please note that we have not recommended charities working on water interventions to date due to our questions about the evidence base: http://blog.givewell.org/2016/05/03/reservations-water-quality-interventions/.

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