VillageReach is the first (hopefully not the last) charity for which (a) GiveWell has raised enough money to make a qualitative difference in VillageReach’s activities; (b) GiveWell has a clear enough picture of the room for more funding situation to be able to say with some confidence what that difference is.

We intend on providing periodic (aiming for quarterly) updates on VillageReach’s (a) progress in its Mozambique expansion, for which unrestricted funds have been sought; (b) revenue, projected expenses, and room for more funding.

We have posted the first such update to the Updates on VillageReach page. In a nutshell:

• Currently, VillageReach is active in Cabo Delgado, Niassa and Maputo, and VillageReach has provided a 6-month assessment and baseline vaccination coverage survey for Cabo Delgado.
• The overall expansion is substantially behind the schedule set out in July 2010 (on time in Cabo Delgado but 6-12 months behind for other provinces) for funding-related reasons (though revenue in 2010 closed the entire “stretch funding gap” for the year, the vast majority of that revenue was not received or anticipated until December).
• In Cabo Delgado, data collection appears to have improved, but there are not yet other signs of improvement in the health system’s performance. This is consistent with the expected trajectory of VillageReach’s 3-year involvement in a province, and we do not find it to be a major cause for concern.
• There has been a global supply disruption in a key vaccine that is expected to be resolved by the third quarter of 2011.
• VillageReach had a total of about $2 million in unrestricted revenue in 2010, of which a little over $1 million can be attributed to GiveWell’s recommendation.
• We believe that this $1 million has been key to VillageReach’s being able to plan to expand its program into the provinces of Gaza and Inhambane.
• We believe that VillageReach has a total funding gap of about $3.6 million remaining for this project. Taking into account expected revenue from non-GiveWell-related sources leaves about $1.4 million in room for more funding. These funds would allow it to proceed as quickly as possible with its full 8-province expansion plan.

The news is not all good. The global supply disruption is a major concern for us, and a reminder of how any attempt to help can be held up by circumstances beyond one’s control. VillageReach’s reports also reveal a problem with the flow of funds between a funder and the government, and make it quite clear that there has not yet been any noticeable improvement in health system efficiency (though there has been an improvement in data collection, and this is arguably what should be expected at this stage in the project).

Overall, though, we feel better about VillageReach than we did 3 months ago because we feel we continue to have a window into the true – not stylized – impact that GiveWell-related funds are having. In our view, one of the most problematic things about charity is that people purchase something but never get to fully understand what they purchased, so the feedback loops that lead to continuous improvement in most markets are broken. This is the first case we know of where individual donors can expect to get full and frequent updates on the impact of their donations (not just how their donations were spent), and is thus a first step toward improving those feedback loops.