GiveWell has been planning to separate the Open Philanthropy Project from GiveWell for over a year. We’re happy to announce that as of June 1, GiveWell and the Open Philanthropy Project are separate organizations. GiveWell sold assets and transferred staff to the Open Philanthropy Project LLC, an entity created for the purpose of potentially acquiring the Open Philanthropy Project’s assets and continuing its operations. (Read more about the Open Philanthropy Project LLC here.) The transaction was unanimously approved by GiveWell’s non-conflicted Board members.
We do not expect this change to impact most of GiveWell’s donors. We’re proud to have incubated the Open Philanthropy Project as part of GiveWell and are excited to see what it achieves as an independent organization.
This post will discuss:
- Brief context for the sale. The Open Philanthropy Project was incubated at GiveWell; GiveWell and the Open Philanthropy Project developed different teams and approaches over the years. We (GiveWell) think the separation of GiveWell and the Open Philanthropy Project has benefits for GiveWell in preserving our mission and clarifying our brand of finding and recommending outstanding evidence-backed, cost-effective charities.
- What this means for donors who use GiveWell’s research. We do not expect the experience for most GiveWell donors to change. GiveWell remains dedicated to publishing a shortlist of top-recommended charities, along with the full details of our analysis, to help donors decide where to give. We will continue to operate as a 501(c)(3) organization.
- Organizational changes at GiveWell. Holden Karnofsky stepped down as Co-Executive Director of GiveWell and Elie Hassenfeld became the sole Executive Director of GiveWell.
- The steps we took to make the decision to sell assets related to the Open Philanthropy Project, including intellectual property, to the Open Philanthropy Project LLC. The details of the transaction are discussed here.
- The relationship between GiveWell and the Open Philanthropy Project LLC. We will continue to share office space and some staff in the near term with the Open Philanthropy Project LLC. Holden Karnofsky stayed on the GiveWell Board of Directors. Elie Hassenfeld remains on the GiveWell Board and now also serves on the Open Philanthropy Project LLC’s Board of Managers.
GiveWell and the Open Philanthropy Project
The Open Philanthropy Project originated in 2011 as GiveWell Labs, a division of GiveWell that would consider giving opportunities in any form or sector, beyond the strict criteria GiveWell applies to potential top charities. GiveWell Labs entered into a funding partnership with Good Ventures, a foundation co-founded by Dustin Moskovitz and Cari Tuna, with whom GiveWell felt deeply aligned on values and mission, for this work. GiveWell Labs eventually rebranded as the Open Philanthropy Project. Good Ventures has funded most of the operational expenses of and giving opportunities identified by GiveWell Labs, later the Open Philanthropy Project, throughout its history. Prior to the creation of GiveWell Labs, Cari Tuna joined GiveWell’s Board of Directors, and Good Ventures has been a major supporter of GiveWell and our recommended charities since 2011.
Over time, the Open Philanthropy Project and GiveWell developed separate teams and approaches. GiveWell decided more than a year ago to explore options for separating the Open Philanthropy Project from GiveWell. Eventually, the Open Philanthropy Project LLC was formed as a potential acquirer of the Open Philanthropy Project. The LLC has a Board of Managers consisting of Dustin Moskovitz, Cari Tuna, Holden Karnofsky, Elie Hassenfeld, and Alexander Berger. This Open Philanthropy Project LLC blog post discusses the separation from their perspective.
What this change means for donors who rely on GiveWell’s research
GiveWell’s approach to finding and recommending charities is not changing as a result of the transaction. We remain driven by our mission to find evidence-backed, cost-effective giving opportunities and to publish the full details of our analysis to help donors decide where to give. We’ll continue to publish an annual list of recommendations of the best giving opportunities we can find. We see the separation with the Open Philanthropy Project as beneficial in providing clarity around our focus and our brand.
GiveWell views the separation as a formal reflection of how GiveWell and the Open Philanthropy Project have been operating over the past few years. The separation does not reflect any planned reduction in support for GiveWell or our top charities from Good Ventures, which anticipates continuing to be a major supporter of both. We do expect to have a continued need for funding for GiveWell’s operations in the future, and hope that donors who value our research will continue to support us.
Organizational changes at GiveWell
There will be some internal organizational changes at GiveWell as a result of the sale, which we don’t expect to have an impact on donors who use our research:
- Holden Karnofsky, who served as Co-Executive Director of GiveWell, stepped down. Holden had been spending the vast majority of his time on the Open Philanthropy Project, and will now exclusively be an employee of the LLC (although he will remain on GiveWell’s Board). We do not expect the amount of capacity Holden dedicates to GiveWell to change as a result of the transaction.
Elie Hassenfeld is now the sole Executive Director of GiveWell. Elie will remain a full-time GiveWell employee and will continue to spend approximately 10-20% of his time on Open Philanthropy Project work, consistent with his time allocation over the past few years.
Approximately 9 other GiveWell employees will also continue to work for GiveWell but will provide some services to the Open Philanthropy Project LLC. All employees who split time will track their time and the costs will be allocated, along with associated overhead, to the relevant entity, with some protections built in to make sure that GiveWell is receiving fair value for any services it provides to the LLC.
- 15 employees, including Holden Karnofsky, left GiveWell and joined the Open Philanthropy Project LLC.
GiveWell and the Open Philanthropy Project LLC do not expect these changes to impact the staff capacity dedicated to either organization relative to before the separation (in other words, employees’ work after the separation will largely be the same as before the separation).
The process we followed to sell the assets and transfer the staff of the Open Philanthropy Project to the LLC
GiveWell took the following steps to evaluate the proposal from the Open Philanthropy Project LLC to purchase assets primarily related to the Open Philanthropy Project, including intellectual property:
- GiveWell set up a sub-committee of our Board of Directors dedicated to sale-related decisions; this sub-committee excluded members of the Board with potential conflicts of interest from discussions and votes related to the sale. Board members Tim Ogden, Rob Reich, Jake Gibson, and Phil Steinmeyer served on the sub-committee. The Board members who were excluded due to conflicts of interest were Cari Tuna, who was expected to be a manager and funder of the LLC, Holden Karnofsky, who was expected to become a manager and employee of the LLC, and Elie Hassenfeld, who was expected to become a manager of and consultant for the LLC.
- GiveWell hired external legal counsel with relevant expertise to advise us on the separation and sale of assets and an experienced valuation firm to estimate the fair market value of the assets we expected to transfer as part of the transaction.
- The GiveWell Board sub-committee negotiated a term sheet for the sale of GiveWell assets primarily related to the Open Philanthropy Project and the transfer of employees to the LLC, which it recommended the full Board approve.
- The major terms of the transaction were unanimously approved by the non-conflicted members of the GiveWell Board on April 25. The sale price for the assets transferred from GiveWell to Open Philanthropy Project LLC was $2.65 million, which the Board determined represented a fair market value of the assets.
- The board appointed Tim Ogden and Sarah Ward to negotiate final agreements consistent with the term sheet, and the sale of assets closed on May 31, 2017.
GiveWell and the Open Philanthropy Project LLC’s relationship
There will be substantial connections between GiveWell and the Open Philanthropy Project LLC:
- The two organizations will continue to share an office, at least through the life of the current lease (March 2019). The Open Philanthropy Project LLC plans to donate office space to GiveWell during this time.
- As indicated above, some staff members will split their time between the two organizations.
- Both Cari Tuna and Holden Karnofsky will be staying on the GiveWell Board of Directors, and they will have a governance role at the LLC. GiveWell Executive Director and Board member Elie Hassenfeld will serve on the Open Philanthropy Project’s Board of Managers.
If you have questions, please contact us.