The GiveWell Blog

Revisiting leverage

Many charities aim to influence how others (other donors, governments, or the private sector) allocate their funds. We call this influence on others “leverage.” Expenditure on a program can also crowd out funding that would otherwise have come from other sources. We call this “funging” (from “fungibility”).

In GiveWell’s early years, we didn’t account for leverage in our cost-effectiveness analysis; we counted all costs of an intervention equally, no matter who paid for them.1For example, see row 3 of our 2013 cost-effectiveness analysis for Against Malaria Foundation. For example, for the Schistosomiasis Control Initiative (SCI), a charity that treats intestinal parasites (deworming), we counted both drug and delivery costs, even when the drugs were donated. We did this because we felt it was the simplest approach, least prone to significant error or manipulation.

Over the last few years, our approach has evolved, and we made some adjustments for leverage and funging to our cost-effectiveness analyses where we felt they were clearly warranted.

In our top charities update at the end of 2017, we made a major change to how we dealt with the question of leverage by incorporating explicit, formal leverage estimates for every charity we recommend.

This change made our cost-effectiveness estimates of deworming charities (which typically leverage substantial government funding) look more cost-effective than our previous method. For example, our new method makes SCI look 1.2x more cost-effective than in the previous cost-effectiveness update. More details are in the table at the end of this post.

We also think the change makes our reasoning more transparent and more consistent across organizations.

In this post, we:

  • Describe how our treatment of leverage and funging has evolved.
  • Highlight two major limitations of our current approach.
  • Present how much difference leverage and funging make to our cost-effectiveness estimates.

Details follow.

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Revisiting the evidence on malaria eradication in the Americas

Summary

  • Two of GiveWell’s top charities fight malaria in sub-Saharan Africa.
  • GiveWell’s valuations of these charities place some weight on research by Hoyt Bleakley on the impacts of malaria eradication efforts in the American South in the 1920s and in Brazil, Colombia, and Mexico in the 1950s.
  • I reviewed the Bleakley study and mostly support its key findings: the campaigns to eradicate malaria from Brazil, Colombia, and Mexico, and perhaps the American South as well, were followed by accelerated income gains for people whose childhood exposure to the disease was reduced. The timing of these events is compatible with the theory that rolling back malaria increased prosperity.

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Key questions about Helen Keller International’s vitamin A supplementation program

One of our two new top charities this year is Helen Keller International (HKI)’s vitamin A supplementation program. We named HKI’s vitamin A supplementation program a top charity this year because:

  • There is strong evidence from many randomized controlled trials of vitamin A supplementation that the program leads to substantial reductions in child deaths.
  • HKI-supported vitamin A supplementation programs are inexpensive (we estimate around $0.75 in total costs per supplement delivered) and highly cost-effective at preventing child deaths in countries where HKI plans to work using GiveWell-directed funds.
  • HKI is transparent—it has shared significant, detailed information about its programs with us, including the results and methodology of monitoring surveys HKI conducted to determine whether its vitamin A supplementation programs reach a large proportion of targeted children.
  • HKI has a funding gap—we believe it is highly likely that its vitamin A supplementation programs will be constrained by funding next year.

HKI’s vitamin A supplementation program is an exceptional giving opportunity, but as with the case for donating to any of our other top charities, not a “sure thing.”

I’m the Research Analyst who has led our work on HKI this year. In this post, I discuss some key questions about the impact of Helen Keller International’s vitamin A supplementation program and what we’ve learned so far. I also discuss GiveWell’s plans for learning more about these issues in the future.

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How uncertain is our cost-effectiveness analysis?

When our cost-effectiveness analysis finds robust and meaningful differences between charities, it plays a large role in our recommendations (more on the role it plays in this post).

But while our cost-effectiveness analysis represents our best guess, it’s also subject to substantial uncertainty; some of its results are a function of highly debatable, difficult-to-estimate inputs.

Sometimes these inputs are largely subjective, such as the moral weight we assign to charities achieving different good outcomes (e.g. improving health vs. increasing income). But even objective inputs are uncertain; a key input for anti-malaria interventions is malaria mortality, but the Institute for Health Metrics and Evaluation estimates 1.6 times more people died in Africa from malaria in 2016 (641,000) than the World Health Organization does (407,000; pg. 41).2Differences in their methodologies have been discussed, with older figures, in a 2012 blog post by the Center for Global Development.

Before we finalized the charity recommendations we released in November, we determined how sensitive our results were to some of our most uncertain parameters.

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Update on our work on outreach

GiveWell’s impact is a function of the quality of our research and the amount of money we direct to our recommended charities (our “money moved”). Historically, we’ve focused mostly on research because we felt that the quality of our recommendations was a greater constraint to our impact than our money moved.

This has changed. Outreach is now a major organizational priority. The goal of this work is to increase the amount of money we direct to our top-recommended charities.

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