The GiveWell Blog

Nice guys finish last

In addition to ~20 charity/philanthropy/social-goodliness blogs, I read one blog, TechCrunch, about for-profit Internet startups. I’d say I see about 10x as much negativity, sarcasm, skepticism, and criticism on TechCrunch as on those 20 improve-the-world blogs combined. That’s why I like TechCrunch.

If you check out the front page now, you’ll see TechCrunch questioning Google’s high-priced acquisition of DoubleClick, stating “We all know what sucks about LinkedIn [one of the most successful social networks in the world]”, and responding to Rolling Stone’s plan to create a social network with “The Rolling Stone audience may be too old to get into the social networking scene.” Nobody gets off easy.

Contrast with NetSquared, currently holding a vote to showcase 20 projects “remixing the Web for social good.” While TechCrunch picks only the most promising, highest-profile startups to write about, the ~150 NetSquared nominees were selected as follows: anyone who wanted to nominate a project did so. Yet while TechCrunch is constantly picking at its subjects for weaknesses, you’ll have a tough time finding anyone critical of anyone on NetSquared. Here are a few choice examples of the tone: all the projects are amazing, there is far too much to choose from, etc. Check out the specific discussions of projects and you’ll see the same: criticisms are few and far between, and always prefaced with “This is the most wonderful thing in the world, but …”

I believe the difference in tone is pretty constant between these two sectors – and it isn’t just the people, it’s the way people see charity. I’ve even heard my coworkers say things like “I think all charities are doing wonderful things” (I usually ask if they think the same about all businesses).

The thing is, in the business world it’s obvious to everyone that good isn’t good enough. You need to be the BEST, within your area, or else capital is better spent on your competitors – and you’re going to go under. But I don’t see why this is any less true of the nonprofit sector – all of it except the part about going under. Right now, there’s no mechanism for charitable capital (donations from individuals) to flow to where it’s best used, and that means no mechanism for inferior charities to go under, and THAT means no constant pressure to get better. That’s what we’re trying to change, because we think the people served by charities deserve the same relentless improvement and scrutiny that the people served by businesses benefit from.

We need kind people in the nonprofit sector, but I could go for fewer nice people. Nice people are always encouraging; they think everything well-intentioned is worth doing; they respond to my ideas with “OK” instead of “Wouldn’t it be better to ____?” They make good grandmothers, not good partners.


  • RaisondeBlog on April 14, 2007 at 10:13 pm said:

    you give me the impression that hardly anyone knows about the free IRS Form 990s that you can access on

  • Holden on April 14, 2007 at 10:27 pm said:

    Have you ever tried to evaluate a charity by looking at its Form 990? I would compare it to evaluating a company by looking at its 10-K, but it’s really more like evaluating a company by looking at a drawing I made.

    We made this argument in excessive detail in Appendix C of our business plan, but briefly: the Form 990 gives you a couple sentence on a charity’s activities; a breakdown of expenses into program/administrative/fundraising that is nearly completely useless, partly because the categories aren’t well-defined and partly because overhead isn’t even a bad thing; and an absolutely huge amount of detail on the charity’s revenue sources and financial holdings (how much do they hold in stocks? How much in bonds? And who cares?)

    I have yet to see an analysis of a Form 990 that pertains to a charity’s ability to help people. If you have, please point me to it.

  • Jon B on April 18, 2007 at 7:21 am said:

    Scarily, I have heard of charities that stockpile donations in case their income dries up.

    So your donation could be going – not to the project, or the project manager, or even the infrastructure to get other donors’ money to the project – but to an insurance fund in case the charity performs badly.

    Of course, this does guarantee all those nice people their jobs in the non-profit sector…

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