The GiveWell Blog

Thoughts from my visits to Small Enterprise Foundation (South Africa) and VillageReach (Mozambique), part III

Continued from Part I and Part II, these are my thoughts from my recent visit to two of our top charities in Africa.

Some of what I saw and discussed prompted me to rethink our frameworks for evaluating certain kinds of programs:

  • Vaccinations. We’ve taken the “vaccination coverage rate” as a reasonable proxy for lives changed, since the evidence base for vaccines is so strong. But of course, “vaccination coverage rate” describes how many children received vaccines, not how many received functional and correctly administered vaccines. I was somewhat concerned that VillageReach staff found several vaccines in refrigerators that had “gone bad,” and I was glad to hear that VillageReach is considering adding an indicator to its information system to track how often this happens. The strong macro-level track record of vaccines (causing major drops in mortality at the country level, not just in carefully controlled trials) is some comfort here.
  • Microfinance. We’ve been concerned about the possibility that clients are taking out loans against their own best interests, and have largely pictured “coercive” versions of this problem: loan officers pressuring clients to borrow more than they should, clients getting themselves into debt cycles, etc. A very interesting anecdote from a staffer raised a more subtle version of this concern: clients may be losing money on their loans without knowing it. The anecdote given was about a particular woman who was literally selling goods for the same price she had bought them for, making the problem obvious. It could, however, be a much more subtle problem for other clients – given high interest rates, potentially transportation costs, etc., it could take quite a bit of calculation and careful accounting even to know whether the business one is running with a loan is in fact operating at a profit or a loss. (And since many families may have several sources of income, a loss might not be noticed if accounting isn’t careful.)
  • Cash transfers.. Our position has been that cash transfers can be assumed to be doing some good if they are successfully targeted to poor people in an area, something that may be difficult. It struck me that in certain areas (such as the village I saw with VillageReach), poverty targeting may not be much of a challenge at all (since everyone anywhere near the area is extremely poor); on the other hand, in these kinds of areas gifts of cash or livestock may be of very limited use (note the missionaries’ claim that village people receiving pensions for military service were largely spending them on alcohol).
  • Social business. I was impressed that I constantly saw Vidagas canisters throughout my trip – in hotels, stores, even the missionaries’ truck. (Vidagas is a “social business” started by VillageReach; it delivers gas, and was started in order to address the challenge of consistently powering refrigerators to keep vaccines at the appropriate temperature.)Our position on social business has been that such a business should not be considered a success until it has demonstrated either an actual profit (not just sales covering unit costs) or demonstrable social impact along the lines of what we look for from nonprofits. On reflection, I think that in certain cases there is room for more middle ground here. There are certain areas where the mere fact of selling something for a non-trivial price would seem to indicate a certain success in filling a need, even if not all costs are covered. Of course, it all depends on the area – subsidized sales may make a lot of sense where infrastructure and access to markets is poor, but in urban areas it could serve simply to “crowd out” private supply and/or enrich middlemen.

    I don’t regret our skepticism of social business to date. It has always been more important to us to avoid “false positives” (i.e., recommendations of organizations that are not impactful) than to avoid “false negatives” (i.e., failures to recommend organizations that are impactful). And I have not seen any “social enterprise investment” fund put together the case I’d need to see, even using the “middle ground” roughly sketched out above. But I do want to keep thinking about how to recognize the good social businesses may be accomplishing without being overly credulous.

These visits very much made the activities of our top charities feel more “real” to me.

To this point, the work we’ve done on international aid has felt very abstract. That’s not a reason not to act/give based on it, but in many ways the situations we’re analyzing are so different from what I see every day that it can be hard to believe that the charities are helping real people in the way our analysis suggests they are.

Much of what I saw on the trip was, in fact, consistent with what I expected. To a large degree, it made the research “come to life.” I saw people and areas that really are at a level of poverty that I’ve never seen in the U.S.; I talked to staff about the details of what they’re doing, and to some degree saw them doing it; and I felt, very tangibly, how the work they’re doing can make a difference.

(As an aside, I’ve had the opposite experience with site visits to U.S. charities. I’m not sure why. The U.S. visits were definitely more “staged” while the international visits had a lot of wandering and improvisation; in addition, the U.S. charities tend to address less tangible problems, and it was often hard to connect the charities’ theories of their own value-added with what I was seeing.)

It was frustrating to say “no” to kids rubbing their stomachs and asking for money, and to see so many people who seem like they could benefit greatly from things that are pretty basic – though not necessarily easy to deliver. The bottom line is that while I’ve pushed to make my actions consistent with my beliefs, my beliefs about the importance of international aid carry a little more emotional weight now, and I feel more emotionally motivated to give and to give well. I would recommend a similar trip to anyone who intellectually accepts the importance of international aid, but is having trouble getting behind it emotionally.


  • Jason on March 13, 2010 at 1:53 pm said:

    Sounds like a great trip. I love your statement about how your giving carries more weight now that you’ve seen hands on the work of the orgaanization. I think that’s valuable for donors and nonprofit professionals. As a fundraiser it is surprising how little of what I’m raising money for I experience firsthand.

  • Julian Brelsford on March 19, 2010 at 2:54 pm said:

    I recall reading an argument in favor of Givewell which said that reducing “overhead” and administrative costs can be counterproductive. To me, this is one of those instances: your travel to see exactly what top nonprofit organizations are doing is overhead, but it looks to me like it was worth every penny. The numbers are important, but it requires person-to-person interaction somewhere in the process to ensure that numbers mean what we think they mean.

  • Rene Coda on March 29, 2010 at 9:54 pm said:


    You have to be commended for the way you try to understand and help very poor people.

    As a native of the Congo, albeit of Italian descent, I have spent 40 years there and have an extensive knowledge of their mentality. which is quite different of ours.

    I cannot speak for elsewhere but in the Congo, it is as difficult to find a reliable person as it is to find a 200 carats diamond. What I hear from other places confirms if anything that they are not different.

    To be successful an organization has to train its own people. To instil them with a sense of professionnal integrety and morality that has been lost in most of Africa. Not an easy undertaking but feasible. One has to be straightforward and firm at the same time.

    At the beginning people have to be closely monitored. As an exemple, if you supply fertilizers to farmers directly, one has to be sure that the fertilizer are used properly and not sold. It is even more imperative if said fertilizers are given to an intermediary.

    I am at your disposal if you have any question.

    Rene Coda

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