GAVI appears to be out of room for more funding (good news)

We’ve always been interested in GAVI, a large funding vehicle for immunizations (which we consider to be one of the best interventions out there for accomplishing good).

Until recently, GAVI projected a need for $3.7 billion between 2011-2015 (archived). However, yesterday there was an announcement that GAVI had raised$4.3 billion, more than enough to cover this need (archived).

In the past, we’ve refrained from recommending GAVI because we have trouble fully understanding its activities, but we’ve been continuing to revisit it and think about how we might gain better understanding. Now we are fairly confident in not recommending GAVI because it appears to have all the funding it needs (which, given its area of focus, we consider very good news).

This situation illustrates one of the trickier room for more funding-related challenges of individual giving. Even if a nonprofit has significant funding needs today, are there big donors right around the corner about to swoop in and render your donation irrelevant?

Before we recommend a charity, we seek as good an understanding as possible of its room for more funding, and this includes asking it about what revenue it expects in the future. This is the best way we know to avoid recommending a charity just before its funding gap is closed by megadonors, but we don’t think this approach is foolproof. We continue to find the issue of room for more funding – and in particular, the possibility of a GAVI-like situation – to be very difficult to deal with.

• College Student on June 15, 2011 at 1:08 am said:

“the possibility of a GAVI-like situation – to be very difficult to deal with.”

Only here, Holden, can I find the juxtaposition of the GAVI situation and “very difficult.” But, that’s exactly why I love Givewell. It’s original and important work. I really appreciate the team at Givewell and I don’t know if you get thanked enough. Thank you so much!

• Jonah on June 15, 2011 at 9:55 am said:

Maybe a good question for charities is “if you receive donations that exceed your current funding gap, what will these donations be used for?” Ideally they would be regranted to an effective alternate charity with room for more funding (isn’t this what GiveWell does with extra donations?) and if such an answer were standard the issue under discussion would be rendered moot, but I suppose the portion of organizations that do this is negligible. Still, this might be worthwhile for GiveWell to push for.

• Ian Turner on July 17, 2011 at 7:31 pm said:

Jonah: In general, you can expect the response to that question to be whatever the charity thinks that you want to hear. It can vary depending on the expectations set up by different donors and can change over time. In other words, while a direct answer would be very useful, it’s hard to tell if the answer you have is indeed candid.

• Jonah S on July 20, 2011 at 8:38 pm said:

Ian:

What you say is currently true for almost all charities. But in principle charities could lay out budget plans ahead of time and report back a year later on how much funding they received, whether they used the money as originally intended or whether their plans changed and how they used funds beyond those needed. Potentially the accuracy of such a report could be checked relatively inexpensively.

This way donors could check back in a year after donating to a given organization to see whether the additional funds were used as intended and charities could build up records of credibility/discredibility on this axis.

• Ian Turner on July 21, 2011 at 12:03 pm said:

Jonah: Yes, if charities made public statements about their future intentions, then it would be much more difficult to tell different donors different things, or to quietly backtrack. Publicly stating one’s future project plans would increase accountability, which is one reason why most charities would never do it unless they were forced to.

The same situation exists in the private sector in the management-shareholder relationship, by the way.

Another issue is that charities sometimes do need to radically change their plans in response to outside events. If civil war broke out in Mozambique, I would not criticize VillageReach for making major program changes, even though my donation to them was on the presumption that they would be deploying the Cabo Delgado model nationwide. This one is less of an issue as long as charities provide rationale for changes and donors are reasonable, but unfortunately there are a lot of unreasonable donors out there.