We previously wrote that we think cash transfers are likely to be significantly less cost-effective (in terms of “good accomplished per dollar donated”) than deworming; yet we rank GiveDirectly higher than Schistosomiasis Control Initiative. We gave some basic indications of our reasoning in the strengths/weaknesses table of our announcement post. Since then, we’ve had further conversations and sought to better express and formalize our thinking, and we’ve realized that there is a potential source of major confusion here:

• This year, we selected our top charities based on the criteria we’ve used for years, but we ranked them based on where we would personally give in order to maximize our impact.
• In past years, the questions of “Where would we give in order to maximize our impact?” and “Which charities meet our criteria?” have been essentially identical, but this year, they have started to diverge. Among other things, the goal of giving to learn has come to carry more and more weight for us.
• Staff are divided on whether SCI or GiveDirectly better exemplifies our formal “proven, cost-effective, scalable” criteria, but we are in agreement that GiveDirectly is stronger on other dimensions including the opportunity to “give to learn,” and as such, we are unanimous in preferring to support GiveDirectly.
• We also feel that “giving to learn” is the primary impact-based justification we’re aware of for supporting more than one of our top charities. For donors who don’t put weight on this benefit, we feel the way to maximize impact is to support AMF exclusively.

Below, we elaborate on these points. The upshot of them is that

• Donors who are place high value on helping GiveWell by giving should either give to all three charities (with our recommended allocation as a reference point) or should make a gift to GiveWell for regranting at our discretion.
• Donors who are seeking simply to do the most direct good – excluding benefits to GiveWell – should exclusively support Against Malaria Foundation, the charity that performs best by our criteria and the charity that we would support if we could only support one. Of course, donors who disagree with our recommendation of AMF may wish to consider both GiveDirectly and SCI as alternatives.
• While we don’t feel our communications have been ideal around these issues, we plan to keep our top charities page as is. For donors seeking to support one charity, our recommendation is to support AMF; for donors looking to support multiple charities, but looking to do so based on our recommendation rather than their own review of our work, our recommendation is to use our target allocation; for donors looking to use more of their personal judgment, we make information available for doing so. We are interested in others’ perspectives on whether our top-level communications are appropriate.

The easiest way to address the difference (and where it came from) between our current criteria for identifying top charities and how we answer the question of “Where do I give?” is to briefly recount the evolution of GiveWell’s approach over time. We do so, then outline how we selected and ranked our top charities (and how the two differ), then discuss the implications for donors.

GiveWell was founded in order to answer the question, “Where should I give?” (See our story.) To the extent that we’ve formalized and publicized criteria for charities, these have come from formalizing what we were looking for in a giving opportunity. The fact that we start with “Where should I give?” and derive and adapt criteria from there – rather than starting with a set of criteria and applying them formulaically – has long been a distinguishing feature that has led GiveWell to investigate different questions (and generally investigate charities in more depth) compared to other charity evaluators.

When we first started, we recognized that we were extremely new to the world of giving. Accordingly, we wanted to start with the “easiest” giving opportunities for non-experts to assess: opportunities that involved directly paying for delivery of an already-proven intervention with at least somewhat quantifiable positive impacts. We’ve long recognized that there may be better giving opportunities that take a different form (higher risk, higher potential reward), but we haven’t felt that we have the expertise and context needed to assess these opportunities. So we’ve sought the easiest charities to be confident in.

Over time, we’ve gained experience and seen interest from larger donors, leading us to want to broaden our criteria generally. At the same time, we’ve become very interested in the idea of “giving to learn” – gaining information from an organization that is much easier to obtain as a “supporter” (someone who has helped get funding to an organization in the past) than simply as an evaluator (someone who might help get funding to an organization in the future).

• This idea first started to appeal to us in 2010, when we felt that the significant funds we had directed to VillageReach improved our access (both in terms of VillageReach’s interest in investing time in GiveWell and in terms of GiveWell’s comfort with asking for such investment). We conducted a multiple day field visit and published intensive updates on VillageReach’s work, leading to substantial revisions in our views.
• Many of the major funders we’ve interacted with have stressed the value of “giving to learn,” outlining a similar dynamic to the one described above: by supporting an organization, one gains the ability to investigate it more deeply.

At this point, it seems to us that one of the best uses of funds might be to support organizations from which – for whatever reason – we believe we can learn a lot, even if we’re not highly confident in such organizations and don’t see the dollars given to them as directly accomplishing much good. We still see enormous room for improvement in our knowledge base, and we anticipate substantial future growth in money moved; thus, we believe that most of the direct impact of the gifts we recommend over GiveWell’s lifetime is likely to be concentrated in the future, and knowledge gained now could have big returns if it improves our future recommendations.

However, as we’ve laid out some of the shifts we’ve been going through this year, many in our audience have said that they want us to continue to focus on charities that meet our traditional criteria – the criteria that have become fairly strongly identified with us by this point.

Therefore, for giving season 2012, we sought to ensure that we were doing our best to highlight all the charities we could find that meet the criteria many have come to associate with us. Our top charities are the current set of charities for which (a) we have conducted extensive due diligence, thoroughly pursued a large number of critical questions for, and remain highly confident in; (b) we believe that more dollars will likely lead to more delivery of programs that are highly cost-effective and backed by strong evidence. (Note that, as has been true every year, there are charities we consider promising and worth investigating, that we simply have not yet done enough due diligence on to place in this category.)

However, when it came time to rank these charities, we reverted to the question of “Where would we like to see funds go in order to accomplish as much good – all things considered – as possible?”

Against Malaria Foundation performs very strongly on all of our criteria – more strongly than any other charity we’ve found – and it is the single charity we would most like to see funds go to in order to accomplish good more broadly (including both direct impacts and learning opportunities). This is important because, as we wrote a few weeks ago, we see a fairly strong case for giving exclusively to one organization in order to maximize impact; to the extent that one gives to multiple organizations, we feel that this should be justified by room for more funding considerations or by the goal of “giving to learn.”

Nonetheless, many donors have asked us about the comparison between GiveDirectly and SCI, which is less straightforward because they have quite different strengths and weaknesses.

SCI is, we believe, working on an intervention with greater direct cost-effectiveness and roughly comparable evidence of effectiveness to GiveDirectly. However, GiveDirectly presents a much clearer picture when it comes to room for more funding. Our understanding of SCI is that marginal dollars are used to (a) fill gaps in programs funded by larger donors (such as the UK government’s Department for International Development) and (b) attempt to catalyze the creation of new programs; while SCI has a track record of implementing large programs fully funded by major donors like the US government or the Gates Foundation, we see little to go on in assessing its ability to carry out these activities effectively.

Looking more holistically at the question of where we’d give, we see three more advantages to GiveDirectly. One is our higher subjective confidence in it as an organization, which has implications for how much good we expect it to accomplish if unexpected situations arise, if there is something fundamentally off about our understanding of its activities, etc. The second issue is learning: we believe that with GiveDirectly, we have a clear sense of what we expect additional dollars to lead to and a strong expectation that we’ll be able to meaningfully compare our expectations with what actually happens in the future – that we’ll be able to assess the outcome of our recommendation via charity updates. We don’t believe the same to be true of SCI, based on the updates we’ve done over the past year (which have included some difficulties in communicating). Finally, we see more “upside” for GiveDirectly because we see it as experimenting with an intervention that is (wrongly, in our view) unusual in the aid world.

Staff members do not all agree on how important each of these individual factors are, but when considering all of them together, we are broadly in agreement that dollars given to GiveDirectly will accomplish more good.

Donors who are place high value on helping GiveWell by giving should either give to all three charities (with our recommended allocation as a reference point) or should make a gift to GiveWell for regranting at our discretion. Our recommended allocation is provided so that donors looking to support multiple charities, and looking to us for guidance on amounts, will give in the proportions that we feel will accomplish the most total good, including contributing to GiveWell’s ability to learn. (We’re planning to write more in the future about how we might better convey our recommended allocations. We suspect that, especially in the case of the #2 and #3 charities, our recommendations might be better expressed in terms of absolute dollars than in proportions of total money moved.)

Donors who are seeking simply to do the most direct good – excluding benefits to GiveWell – should focus their support on the Against Malaria Foundation, the charity that performs best by our criteria and the charity that we would support if we could only support one. We see no benefit to spreading donations out over multiple organizations, except for the potential benefits of “giving to learn” or in response to room for more funding issues (which we do not foresee for our recommended charities at expected funding levels). Donors who disagree with our recommendation of AMF may wish to consider both GiveDirectly and SCI as alternatives.