This is my first chance in a while, and my last chance for a while, to take a vacation. Technically, I’m still unemployed, so any Straw Ratio-minded donors should take comfort in the fact that they aren’t paying for this.
In the meantime, here’s a summary of what we’ve talked about so far.
Greatest hits: the 12 posts that I and the random people I’ve talked to like the most
- Where I’m coming from. Elie has two stumpers for charities: what do you do, and does it work?
- Charity: the video game that’s real. My best (and best-illustrated) case yet for hard-core altruism.
- Spending the better half. Why I’m trying to be a philanthropist before I’ve earned a fortune to give away.
- Dear Executive Director, Please Fire Your Staff. MichiganBob is fed up with charities’ being nice to their employees – at the cost of the needy.
- Which of these boasts is not like the others? The in-a-nutshell argument for why “how much of my money REALLY goes to the programs?” is a silly question.
- Test my wings? That would mean less time for flying! And here’s one of the consequences of that silliness.
- Do any charities know what they’re doing? Pictures of a Vince alley-oop included.
- Enough about lives – how many dollars can we save? I love ripping on the soft-minded, but occasionally I go after the number crunchers as well.
- Metrics: between losing your humanity and throwing up your hands. A monster post on our conceptual evaluation framework. Cool pictures.
- The 2006 Holden Awards. See where and how much I donated last year. Now try to find another blog that discloses that.
- The big question: is our project 1.0 or 2.0? Social networking isn’t the answer to the world’s problems. We are.
- I am not a flake. This blog will not fade gently into no-update-land.
Down with the Straw Ratio, or, “How much of my donation goes to administrative expenses, and who cares?”
If you’ve ever used Charity Navigator or had a conversation about charity, chances are you’ve discussed the wildly popular metric for evaluating charities: how much of their money goes to “program expenses” vs. “administrative and fundraising expenses.” I’m here to tell you that this metric is about as useful for figuring out how to help people as an old shoe.
The Straw Man opened the series, dubbing “% of expenses that go to programs” as “the Straw Ratio.” I then proceeded (after grudgingly conceding a tiny bit of value in this metric) to rip him apart. I started with the obvious: even if the Straw Ratio were useful, there would be a lot more to do to find the best charities. I then argued that administrative expenses are valuable in running a charity (or anything) well, and pointed out that the obsession with penny-pinching has consequences for the quality of the sector’s people, technology, and evaluation capacity. The Straw Ratio isn’t just a silly number: it’s a mentality that has infected everything from the Internet to donors’ brains, and it’s a mentality that GiveWell exists to fight.
What GiveWell looks for in a charity
So how do we intend to evaluate charities? Let’s start with two simple questions you won’t find on Charity Navigator: what do they do, and what’s the evidence that it works? We’re looking for charities that can already answer these questions well, demonstrating proven, scalable, and cost-effective approaches to helping people in the ways we care about. And for those of you who love to warn about the pitfalls of extremes, rest assured that we neither intend to accept evidence-free generalizations nor reduce everything to a formula.
The customer is on your side, or, why fundraisers should stop treating donors like 5-year-olds
Once you start focusing on the questions that matter, you find that they’re complicated. That’s OK – helping people is still worth money, and presumably the fundraisers trying to get mine agree. So why can’t we seem to communicate? Why is charity constantly oversimplified, reduced to pictures, and treated as something that donors must be cajoled and even tricked into? If fundraisers truly believe in what they’re doing, they must believe that donors don’t – and their assumptions about what donors value are keeping us from the relationship we should have: that of equals and teammates in the pursuit of improving the world.
Getting personal: altruism is real and it is spectacular
Well, there may be a lot of donors out there who are giving for the wrong reasons, but I (like other members of GiveWell) am a hard-core, straight-up, card-carrying altruist, and I don’t think we’re alone. My wish for a better world is no more insincere, exotic or “irrational” than the emotions felt by a video gamer or sports fan (and in the end it’s way more awesome). Altruism isn’t my only value, but it’s a passion that has taken over my life, and I’m devoting myself to it right now, not waiting until I’m filthy rich.
In short, I’m a charity nerd. And while some believe GiveWell to be over-intellectualizing giving, I’d say our attitude comes from caring more, not less, than traditional “Show me a picture and I’ll write you a check” donors.
“Nonprofit niceness” and how we hate it
I view criticism as the best road to improvement, and I hate the “everything is wonderful” attitude we see in the nonprofit sector. By focusing on how great people’s ideas and intentions are, too many people in this sector let themselves off the hook when it comes to actually getting results. I’d much rather they went harder on themselves and each other, benefiting the people who really need help.
Thoughts on specific charities and causes – getting down and dirty
Once our operations are up and running, we expect most blog entries to be devoted to specific charities and causes. We haven’t done so much of this to date because we started the blog after our initial (part-time) project, and we’ve been focused on forming a business plan to expand our project (more on that here). But, we’ve shared some casual thoughts on what you can do with your money. Elie and I had a back and forth about what it means to save a life with your donation; I announced the lucky charities that got a piece of my 2006 donations, and Elie endorsed his own charity of choice (although he has since flaked out and not finished the full official review – well, honestly, we’ve had other priorities). We also shared our notes from meetings with Children’s Aid Society and New Visions for Public Schools, and Elie was kind enough to mock people who donate to animal causes. (Note: all blog posts represent the opinions of the individual who made the post, not the official views of GiveWell.)
We launched this blog, started getting attention (after making a stink about credit card processing costs), announced the Clear Fund (our large-scale project to accomplish our goal of promoting transparency and good information for donors), gave a valiant though futile try at making the NetSquared conference (maybe the problem is that we aren’t actually a “Web 2.0” project), and recently revealed our identities.
I got involved in the debate on “responsible investing,” or whether foundations should try to align their investing with their grantmaking (i.e., not hold stocks that work against the values they exist to promote). My position is that it isn’t worth the effort and that too much is made of this issue, but that didn’t stop me from posting a whopping four times on the topic: one, two, three, four. When I get back, I intend to raise more of a stink about the issue I asked about in the second of that series: why are foundations investing (rather than giving away) such a high proportion of their assets in the first place?
- FAQ: What qualifies us to issue evaluations?
- FAQ: What are our criteria?
- FAQ: How are we choosing which nonprofits to review?
And finally, if you’re looking to complete your collection of GiveWell posts, don’t miss these basically pointless updates and notices I wrote!