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March 6th, 2009

Review of The Life You Can Save, by Peter Singer

The Life You Can Save went on sale in the U.S. on Monday. First, disclosures: the book prominently features GiveWell, a portion of the book’s proceeds are being donated to GiveWell, and I was sent an advance copy. I have strong incentives to encourage people to read and buy the book.

So let me start with a reason not to read it: it will make you uncomfortable. It certainly made me uncomfortable. It started by asking me a simple question - would I sacrifice time and money to save a stranger’s life? If so, why don’t I give more of my income to charity? - and pounded away relentlessly, tearing apart every excuse I had until I was left with “I’m really selfish.”

I’ve appreciated many books for making me feel scared, or angry, or sad. Now there’s one to make me feel personally guilty. (How’s that for a blurb?)

Of course the goal of the book isn’t to make people feel guilty, it’s to get them to give a lot (even if not as much as they, strictly speaking, could). And unlike the IRS, Prof. Singer doesn’t see supporting the local museum as equivalent to saving children’s lives. He’s specifically advocating more giving to developing-world aid, a goal we strongly agree with (as our research agenda demonstrates). You could think of this book as an End of Poverty on a personal rather than global scale - instead of arguing that the international community has the power to end poverty, it argues that you have the power (and thus the responsibility) to save a life.

But can a donation really save a life?

As with The End of Poverty, the moral argument depends on factual questions, and meets some skepticism from William Easterly, who argues - partly from GiveWell’s experience trying to find great charities - that saving a life is not as simple as it’s often made to sound.

There is merit to this. We’ve put a lot of effort by now into finding charities you can be confident in, and we still consider it an open question whether a $1000 donation really translates to a saved life. We estimate that it can in PSI’s case, but there are all kinds of room for uncertainty.

For example. To me the biggest questions with PSI are, (1) Is it getting its subsidized life-saving materials (mostly condoms and insecticide-treated nets) to people who need them, rather than to people who don’t? (2) Are these people consistently and correctly using the materials? One of the reasons I really like PSI is it seems very concerned with these two questions, and attempts to collect data specifically on them; the data it makes available imply success. On the other hand, a lot of monitoring and evaluation isn’t getting done (see the research scorecard, which to its credit PSI makes public), and none of it appears externally audited. How reliable is this data? How representative is the information we have?

And that’s PSI, our current top-recommended charity. Even if $1000 can save a life, your $1000 isn’t unless it gets used well. There’s no charity that makes me even 90% confident this is happening, and with the “average” charity I’d bet that it isn’t.

We can do more - not just give more

However, the bottom line is that I don’t think these concerns mean that Prof. Singer’s challenge can be dismissed. For one thing, even if 90% of PSI’s activities accomplish nothing and the other 10% are in line with our impressions, that’s still $10,000 per life saved - enough for the moral argument to remain very relevant, in my opinion. Based on the limited information we have, it appears that donating to our recommended charities likely is saving lives at some relatively good rate. It might be more uncertain and probabilistic than pulling a drowning child out of the water, but it’s still a compelling value for your money.

And the other issue is that there are more charities out there to be examined, and more improvement to be had from holding them accountable. As Prof. Easterly acknowledges, there are many proven life-saving programs. There may not be infinite room to expand these programs; these programs may not be able to end poverty by themselves; but they can absorb at least a few million more dollars. And that does mean that nearly all of us could be doing more to save (or change) lives than we are.

It’s just that “doing more” has to mean more than “giving more.” Picking your charity - and doing your part in holding it accountable - is at least as important as giving generously. We’re trying to make this task easier for time-strapped donors: if you put credence in our analysis, it can mean simply basing your giving on our recommendations (informally, or formally via GiveWell Advance Donation).

Bottom line

Unlike many “give more” advocates that target only dollars spent, Prof. Singer recognizes the challenge of translating generosity into results (hence his interest in GiveWell, as well as J-PAL, which we’re big fans of). His book challenges you to give more and give better. Neither of these is easy … nor is reading The Life You Can Save. But they’re worth it, because even for an individual donor, saving a life is within reach.

January 15th, 2009

BBB Standards: Accountability or Technicalities?

Yesterday we got an email from someone looking for help on where to give, noting that two of our top charities do not meet the Better Business Bureau (BBB)’s 20 standards for charity accountability.

We believe that both of these organizations are reputable, accountable, and excellent, and were surprised to hear this. After checking out the BBB reports on them, we stand by our recommendations and feel that the BBB’s reservations come from technicalities, not legitimate issues.

Population Services International (PSI): financial transparency, but not in the BBB’s format

The BBB report on PSI states that PSI meets 19 of the BBB’s 20 standards. The missing one:

the detailed functional breakdown of expenses within the organization’s financial statements only included one program service category. It did not include a detailed breakdown of expenses for each of its major program activities.

PSI responds (same page) that it has one high-level program, Social Marketing, breaking down into hundreds of sub-programs, and so chose to list only the one on the financial statement.

Is PSI stingy with financial information? We don’t think so - in fact, we think PSI stands out for its willingness to disclose meaningful, helpful information about where its money goes. In our full review of PSI, we’re able to break out its expenses not only by expense type (promotion, evaluation, materials, staff, etc.) but also by region and by product. Getting breakdowns from several different perspectives is useful for truly understanding their activities, and it’s something that many other charities can’t or won’t provide (for example, it’s common to be refused information on how much was spent in each country).

But the BBB doesn’t look at several different breakdowns - it looks only at the official audited financial statement, and apparently this one wasn’t broken out as they expected. To me this looks like a case of an organization that is more generous with financial data than most, but didn’t anticipate the BBB’s requirements on a particular form.

Partners in Health (PIH): the Board Chair is salaried

Like PSI, PIH meets 19 of the BBB’s 20 standards. The missing one (from the BBB report):

Standard 4 : Compensated Board Members - Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board’s chair or treasurer.

PIH does not meet this Standard since the paid chief executive officer (CEO) also serves as the chair of the board.

The Board of Directors votes on compensation, so I can see why the BBB likes to see some distance between the Board and salaried staff. But it does allow paid staff to be on the Board as long as they don’t make up too many of its votes (as spelled out above); here the problem is that a salaried member has the formal Chair position.

I don’t have a copy of PIH’s bylaws, but to my knowledge (and based on our own bylaws, which are pretty standard and available at the bottom of this page), the Board Chair is distinguished from other members by procedural responsibilities, primarily presiding over meetings. The Chair does not have the power to cast extra votes, approve compensation without voting, or anything along those lines.

It seems worth keeping in mind that PIH is the same organization whose founder has been extensively written about and is known for things like not taking vacations because of his devotion to his work. I don’t know him personally and wouldn’t presume to guarantee an organization’s ethicality, but I’m guessing that if you polled relevant people, you’d find that Partners in Health is one of the more trusted and respected nonprofits out there, and that its choice of putting its CEO as Board Chair wouldn’t give pause to anyone in the know.

Bottom line

I think the BBB’s standards are well-intentioned and that there are sound principles behind them, but ultimately, they are measuring charities’ conformance to formal technicalities. I don’t believe there’s any substitute for carefully examining a charity’s activities, using all the documentation that’s available rather than just the documentation that’s standardized (such as the audited financial statement and bylaws). We reiterate our recommendations of both PSI (full review here) and PIH (full review here).