The GiveWell Blog

What does $1000 do?

We’re currently working to find vehicles for donors to fund certain highly appealing program-based interventions. It’s not a simple task, because when dealing with large organizations, it’s rarely clear just how an individual donor’s “drop in the bucket” fits in.

Large organizations like UNICEF run a huge variety of programs – including programs such as iodine fortification (something we’re very positive about) and programs such as water infrastructure construction (which we are less excited about). From conversations with such organizations, we feel that a donor has the following options:

1. Gain confidence in the entire organization by getting a bird’s-eye view of its strategy, priorities, and activities; then give unrestricted.

In my view, this is the ideal way to donate: it means finding a charity that shares your vision (not just one capable of carrying it out) and avoiding micromanagement. However, getting a decent bird’s-eye view of a large international aid organization can be extremely difficult.

2. Mark your donation for a particular ongoing program, or even for a particular piece of a program (as outlined in this post).

This is the possibility most often raised by the organizations we talk to. For example, when asking how a donor could contribute to expanding micronutrient coverage, one organization offered a chance to participate in an existing program that distributes fortified biscuits, such that “each $X could buy one biscuit.”

The drawbacks of this approach are discussed in our earlier post: often such a donation essentially amounts to an unrestricted donation.

3. Fund the entire budget of a large-scale project (for example, bringing iodization to a new region).

This approach involves giving funds in exchange for a new project’s being carried out, giving the donor true control (not just attribution, as in #2). The obvious problem is that it requires enough funds to pay for an entire large-scale project, and is therefore outside the reach of many individual donors.

#3 might become an option if individual donors coordinated with each other, pooling their money to fund a particular sort of project. We are considering trying to facilitate this sort of coordination sometime in the future.

For now, though, we feel that the only way we can satisfactorily answer this question is through approach #1: finding organizations that are either “simple” enough (focusing overwhelmingly on a particular kind of project) or well documented enough that we can understand, and endorse, unrestricted donations to them.


  • Brian Slesinsky on October 6, 2008 at 11:17 am said:

    Here’s one way to think about it: charities make their own decisions about their budgets. Restricted donations place a constraint on a charity’s budget, but unless a program is funded mostly from restricted donations, it’s not a meaningful constraint.

    The real question, then, is whether a charity’s decision-making about budgets can be influenced (not controlled) by restricted donations? If a particular program starts to become more popular with donors, does the charity interpret this as a sign that the program should be expanded? Or do they generally assume they know better than their donors about what works and ignore this signal?

    I would suspect that it depends on how the donation is done. By justifying donations with analysis, GiveWell seems more likely to have influence with a large charity than restricted donations that aren’t backed up in this way.

  • Mike Wasserman on October 10, 2008 at 11:54 am said:

    The first option you present, gaining confidence in an entire organization, should absolutely be the main way that individuals make donations. For organizations large and small, unrestricted gifts allow organizations to prioritize based on their mission and their results, not on the popularity of a project among donors.

    Obviously, many organizations provide the opportunity to support specific programs, which is your second recommendation. Your idea that these donations are practically the same as general operating (which is dicussed in your last post) is flawed. If a donor gives to a specific program, the money will go to that program. If it doesn’t, the organization is breaking the law. If a program is underfunded, the organization will then pay for the rest of the program by using unrestricted dollars. I understand your argument that if a restricted gift isn’t made, then the organization will simply put more unrestricted money into the program, which means that your gift is just freeing up unrestricted money. However, you are assuming an organization has a surplus of money. In reality, there are some organizations that don’t have enough money to accomplish all of their goals. In this case, a donor who makes a restricted gift is ensuring that, if a program is cut because of a lack of funding, at least the part that they fund is safe. However, the real problem is this: what donor is worried that their support of one program allows an organization to use its surplus to fund another program? The dollars they are giving are going directly to the program. They should be happy. Just because their gift also strengthens the organization as a whole, which might allow them to build another program, that shouldn’t be a negative. And if one program is viewed so negatively by a donor, they shouldn’t give to that organization in the first place.

    Finally, your third option is the most detrimental to non-profits. I believe that giving clubs are an excellent way to make a larger impact, and so I am a big fan of the “donor pooling” idea. But, to give money so that an organization can create a new program is bad for organizations. Any organization that creates a program because the money is there and not because it relates to their mission becomes weaker, their resources become more stretched out, and the odds are that the program will not last if the donor group chooses to stop funding it. This is the same problem I have with organizations who apply for government grants to start a program, and then they shut down the program when the grant ends. Even though some good has been done for a short period of time, it does not create a sustainable solution. In general, organizations working for a cause know what they can and cannot do, and they know what they want to do. If they want to create a program and a number of donors pool their money to give the organization start-up funding, then great. But, if donors ask an organization to create a program that the organization otherwise would not have created…that is not good for the sector, the organization, or the people being served.

  • Holden on October 10, 2008 at 6:59 pm said:

    Mike, I agree with the sentiment that it’s best to form confidence in the whole organization and give to that organization, without worrying whether the funds will be used exactly as the donor pictures them. However, we’ve found many organizations – particularly large international aid organizations – that simply can’t practically be evaluated as a whole. UNICEF is a good example: they are one of the few organizations subsidizing iodization, yet we have little confidence in much of their other work.

    What would you recommend for an individual donor who wants to fund a particular well-documented, proven intervention, when the only charities carrying out that intervention are too large and diverse (and undocumented) to be evaluated holistically?

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