The GiveWell Blog

Our recommendation to Good Ventures

Today, we announce our list of top charities for the 2018 giving season. We expect to direct over $100 million to the eight charities on our list as a result of our recommendation.

Good Ventures, a large foundation with which we work closely, is the largest single funder of our top charities. We make recommendations to Good Ventures each year for how much funding to provide to our top charities and how to allocate that funding among them. As this funding is significant, we think it’s important for other donors to take into account the recommendation we make to Good Ventures.

This blog post explains in detail how we decide what to recommend to Good Ventures and why; we want to be transparent about the research that leads us to our recommendations to Good Ventures. If you’re interested in a bottom-line recommendation for where to donate this year, please view our post with recommendations for non-Good Ventures donors.

Note that Good Ventures has not finalized its plans for the year and may give differently from what we’ve recommended. We think it’s unlikely that any differences would have major implications for our bottom-line recommendations for other donors.

Summary

In this post, we discuss:

How we decided how much funding to recommend to Good Ventures

This year, GiveWell recommended that Good Ventures grant $64.0 million to our top charities and standout charities. The amount Good Ventures gives to our top charities is based in part on how the Open Philanthropy Project plans to allocate funding across time and across cause areas. (Read more about our relationships with Good Ventures and the Open Philanthropy Project here.)

The Open Philanthropy Project currently plans to allocate around 10% of its total available capital to “straightforward charity,” which it currently allocates to global health and development causes based on GiveWell’s recommendations. This 10% allocation includes two “buckets”—a fixed percentage of total giving each year of 5% and another “flexible” bucket of 5%, which can be spent down quickly (over a few years) or slowly (over many years). GiveWell’s recommendation that Good Ventures grant $64.0 million this year puts the flexible bucket on track to be spent down within the next 14 years.

We’re recommending $64.0 million this year to balance two considerations:

  • As the world gets richer, giving opportunities in global health and development generally seem likely to get worse over time. This implies that giving now has a larger impact.
  • In the coming years, GiveWell may find opportunities that are considerably more cost-effective than our current recommendations (e.g., among policy advocacy organizations). This would make spending in future years have a larger impact.

Our recommended allocation for Good Ventures

The table below summarizes how much funding we recommend Good Ventures grant to each of our top charities, along with our explicit cost-effectiveness estimate for each organization and organizational factors we don’t model explicitly that affect our assessment of impact.

As always, cost-effectiveness figures should be interpreted with caution.

Note: the cost-effectiveness estimates we present in this post differ from those in our published cost-effectiveness analysis for a number of reasons.1“The cost-effectiveness estimates in this sheet, which we used to inform our recommended allocation differ from those in our published cost-effectiveness analysis because (1) we apply a number of adjustments to incorporate additional information (2) we apply different weightings to each program (which affects the weighted average of cost-effectiveness).” Source: See Giving Season 2018 – Allocation (public), “Cost-effectiveness results” tab, row 17. Additional details at the link.

Charity Modeled cost-effectiveness (relative to cash transfers)2We typically won’t move forward with a charity in our process if it appears that it won’t meet the threshold of at least 2-3x as cost-effective as cash transfers. We think cash transfers are a reasonable baseline to use due to the intuitive argument that if you’re going to help someone with Program X, Program X should be more cost-effective than just giving someone cash to buy that which they need most.” June 1, 2017, GiveWell blog, How GiveWell uses cost-effectiveness analyses. The estimates presented here differ from the estimates presented in our recommendation to donors because they estimate weighted average cost-effectiveness over the whole funding gap, rather than on the margin. Organizational factors we don’t model explicitly3We take into account an organization’s strength of communication with us and the comprehensiveness of its program monitoring. We factor this into our broad assessment of the organization’s cost-effectiveness. Read more: November 26, 2018, GiveWell blog, Our updated top charities for giving season 2018. Recommended allocation
Malaria Consortium (SMC program) 8.8 Very strong $26.6 million
Evidence Action (Deworm the World Initiative) 14.6 Very strong $10.4 million
Sightsavers (deworming program) 12.0 Moderate $9.7 million
Helen Keller International (VAS program) 7.0 Strong $6.5 million
Against Malaria Foundation 7.3 Moderate $2.5 million
Schistosomiasis Control Initiative 8.3 Relatively weak $2.5 million
The END Fund (deworming program) 5.4 Relatively weak $2.5 million
GiveDirectly 1 Very strong $2.5 million
Standout charities $800,000 (combined)
Sum $64.0 million

The underlying objective of GiveWell’s allocation is to direct as much money as possible to the most cost-effective giving opportunities over the long run. (We aim to optimize cost-effectiveness, as defined broadly—we recognize the limitations of our cost-effectiveness model and consider additional factors in our assessment.) We relied on modeled cost-effectiveness figures as well as the organizational factors described above to inform our recommendations.

To meet this objective, our allocation this year was driven by the principles described below.

Principles we followed in arriving at this allocation

Principle 1: Put significant weight on our cost-effectiveness estimates. Our cost-effectiveness estimates incorporate a substantial amount of information relevant to our decisionmaking. While we recognize the high levels of uncertainty around our cost-effectiveness estimates, they are the single largest factor we take into consideration. More on how we use cost-effectiveness to inform our decisions here.

Principle 2: Consider additional information about an organization that we have not explicitly modeled. While our cost-effectiveness estimates are the best tool we know of to estimate the amount of good a charity accomplishes, we believe it’s infeasible to try to incorporate all relevant considerations into a single quantitative estimate. Subjective assessments that aren’t included in our cost-effectiveness calculations but affect how much impact a charity has include:

  • A charity’s ability to make good decisions on how to prioritize. Our top charities often take factors that aren’t included in our cost-effectiveness estimates into account when deciding how to spend their limited budgets. We use our subjective assessment of how well charities answer our questions about their activities as a proxy for how well they make these decisions.
  • Upside. Our top charities often perform activities that go beyond the scope of their direct work, such as conducting and sharing research that influences others, or raising funds for their programs from funders that would otherwise give to less cost-effective programs.

For the most part, we do not have the opportunity to directly observe these factors. Our subjective assessments of these factors are based on the observed but unmodeled factors that we discuss in this post: the quality of the organization’s communication and ongoing monitoring, and the likelihood of detecting future problems.

Principle 3: Assess charities’ funding gaps at the margin, i.e., where they would spend additional funding, where possible. We try to understand how charities’ funding would be spent among different programs or locations. Our cost-effectiveness estimates for charities’ projects often vary substantially (depending, for example, on the underlying disease burden in a particular country the charity plans to work in). Where possible, we compare our best guess of how funding would be used on the margin, rather than on average. As part of assessing charities’ marginal cost-effectiveness, we intend to capture whether there are diminishing returns to their receiving additional funding.

Principle 4: Default towards not imposing restrictions on charity spending. While we rely on our expectation of how charities would prioritize funding gaps to estimate marginal cost-effectiveness, we do not plan to impose any restrictions on how the funding is actually used in practice. (There is one exception to this: in cases where a top charity implements multiple global health and development programs and our recommendation is restricted to one of those programs, we do restrict funding to the priority program we recommend, such as deworming or vitamin A supplementation.) We believe our top charities are often better placed to make decisions about which projects to fund than we are, and we want to ensure maximum flexibility for them to do so.

Principle 5: Fund on a three-year horizon, unless we are particularly uncertain whether we will want to continue recommending a program in the future. Our top charities have communicated to us that there are often substantial benefits to knowing that funding for a program is secure for the future. As a general rule, we aim to provide funding for three years for each program we choose to fund. The exception is when we are more uncertain whether we would want to renew funding for a third year (e.g. because our estimated cost-effectiveness of a program is close to the marginal program we decided not to fund).

Principle 6: Ensure charities are incentivized to engage with our process. We recognize that our charity review process requires deep engagement from senior members of charities’ staff. We want to ensure that charities are incentivized to keep engaging with our process. To this end, since 2016, we recommended that Good Ventures provide a minimum “incentive grant” to top charities ($2.5 million) and standout charities ($100,000).

We hope that providing significant incentive grants increases the chances that charities are motivated to compete for a GiveWell recommendation. We fear that without ensuring that every top charity or standout receives a substantial amount of funding, some charities might be deterred from applying for a GiveWell recommendation or from making changes to their programs to potentially become top charities.

Our process for determining our recommended allocation for Good Ventures

In line with the principles above, we used the following process to arrive at our recommended allocation for Good Ventures:

  1. We recommended that Good Ventures provide each charity with an incentive grant ($2.5 million per top charity and $100,000 per standout charity).
  2. We identified the most cost-effective gap we were unable to entirely fill with the $64.0 million we recommended to Good Ventures (noting again that Good Ventures has not finalized its plans for the year and may give differently from what we’ve recommended): Malaria Consortium’s seasonal malaria chemoprevention program in Nigeria, Burkina Faso, and Chad. Our cost-effectiveness analysis suggests this gap is about 8.8x as cost-effective as cash transfers, and that Malaria Consortium could absorb about $70 million in additional funding to support this work. We have a high opinion of Malaria Consortium as an organization, and this qualitative assessment supports our consideration of this gap as highly cost-effective to fill.

    Our best guess is there are limited diminishing marginal returns over the interval of this funding gap.

  3. Remaining funding gaps were compared to the Malaria Consortium funding gap in Nigeria, Burkina Faso, and Chad based on (i) their estimated cost-effectiveness, (ii) our subjective assessment of the organization’s quality, and (iii) particular arguments relevant to that funding gap but not captured elsewhere in our analysis (e.g., whether our decision to not fund a particular gap would be disproportionately disruptive to an organization’s activities).

This spreadsheet lists all of our top charities’ funding needs; rows 70-79 show total funding needs by charity. We relied on this list of funding needs in determining our recommendation to Good Ventures, as well as in making our assessment of how much additional funding our top charities can absorb, after taking into account our recommendation to Good Ventures.

In brief, we concluded that some charities’ funding gaps compared favorably to Malaria Consortium’s seasonal malaria chemoprevention gap, which led us to recommend a total of ~$6-10 million in funding to each of Deworm the World Initiative, Sightsavers’ deworming program, and Helen Keller International’s vitamin A supplementation program. We did not see compelling reasons to recommend funding to the other top charities ahead of Malaria Consortium’s funding gap, so we only recommended that those charities receive the $2.5 million incentive grant.

We explain our recommended allocation to Good Ventures for each of our top charities in more detail on this page.

Questions?

We’re happy to answer questions in the comments below. Please also feel free to reach out directly with any questions.

This post was written by Andrew Martin, Catherine Hollander, Elie Hassenfeld, James Snowden, and Josh Rosenberg.

Notes   [ + ]

1. “The cost-effectiveness estimates in this sheet, which we used to inform our recommended allocation differ from those in our published cost-effectiveness analysis because (1) we apply a number of adjustments to incorporate additional information (2) we apply different weightings to each program (which affects the weighted average of cost-effectiveness).” Source: See Giving Season 2018 – Allocation (public), “Cost-effectiveness results” tab, row 17. Additional details at the link.
2. We typically won’t move forward with a charity in our process if it appears that it won’t meet the threshold of at least 2-3x as cost-effective as cash transfers. We think cash transfers are a reasonable baseline to use due to the intuitive argument that if you’re going to help someone with Program X, Program X should be more cost-effective than just giving someone cash to buy that which they need most.” June 1, 2017, GiveWell blog, How GiveWell uses cost-effectiveness analyses. The estimates presented here differ from the estimates presented in our recommendation to donors because they estimate weighted average cost-effectiveness over the whole funding gap, rather than on the margin.
3. We take into account an organization’s strength of communication with us and the comprehensiveness of its program monitoring. We factor this into our broad assessment of the organization’s cost-effectiveness. Read more: November 26, 2018, GiveWell blog, Our updated top charities for giving season 2018.

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