This is the fourth post (of five) we’re planning to make focused on our self-evaluation and future plans.
In previous posts, we discussed the progress we’ve made, where we stand, and how we can improve in core areas. This post focuses on the latter, and lays out our top-level strategic choices for the next year.
Broadly, we see the key aspects of GiveWell – the areas in which we can improve – as
- Research vetting: subjecting our existing research to strong, critical scrutiny from people with substantial relevant experience and credentials.
- Research maintenance and systemization: keeping our research up-to-date and high-quality, while training junior staff to maintain it.
- Research expansion: actively seeking more charities to recommend.
- Marketing: increasing our “customers” reached and money moved.
- Fundraising/operating: maintaining the organization.
(These are broadly similar to last year’s areas for improvement.)
Our top priorities for this year are:
- Research expansion. As discussed previously, we have an urgent need to find more top charities so that we can productively move more money. It would be a major problem for GiveWell if we essentially had more demand for our research (i.e., donors interested in following our recommendations) than supply (i.e., charities able to absorb this funding effectively).We aim to find at least $3 million in room for more money moved, i.e., gold-medal charities that can collectively absorb at least $3 million very effectively. Finding more top charities could be very challenging and require large allocations of time from both junior and senior staff.
- Fundraising – as discussed in the overview of our financial situation, we have expanded our staff while seeing a couple of large sources of revenue fall off. Raising more money in 2011 will be necessary in order to maintain our operations at optimal size.We aim to raise our annual revenue from around $200,000 to around $400,000 (if we do not make it all the way to $400,000 we will cut some staff going into 2012, as outlined in our overview of our financial situation). I (Holden Karnofsky) will be taking primary responsibility for this task, and expect it to take a fair amount of time.
Other key priorities are:
- Research maintenance and systemization – all our research will need to be updated this year (as it is every year). We expect this work to be done primarily by junior staff.
- Research vetting – we believe there is substantial room for improvement in our testimonials and external reviews of our research. We expect to make improvements with relatively little investment of our time, since our process for getting testimonials and reviews is already in place.
- Marketing – we expect to pursue most of the ideas we listed previously for expanding our reach, with moderate time cost.
- High-level research of new causes – we’re experimenting with a method for getting a high-level picture of a charitable cause, without getting to the most time-consuming step of evaluating specific charities. The idea is to take a given cause – for example, global warming mitigation – and get a basic sense of what information is available, what cost-effectiveness estimates say about what can be accomplished for how much, what the key questions are for organizations, and how likely it seems that we could find top charities in this area. We hope to do high-level research on a few particularly promising causes, laying the groundwork to find more top charities in the future.
Comments
$400,000 sounds like a lot to spend in order to figure out where to put only $3,000,000. That’s $1 of every $8.50 available for donation, spent just deciding what to do (assuming you reach your goal!). How do you justify the cost?
Easy: if the $400,000 means that $3 million is spent on something twice as effective (which is easily doable), then that is a pretty good use of $400,000.
Framing it slightly differently:
I personally assume that, even among donors who generally seek to do the most good for their donation, that many such donations are relatively ineffective.
Let’s say that $1 given to the average charity by a slightly bang-for-the-buck donor generates 1 util of goodness. The donor in question has done little research beyond spotting a (seemingly) compelling ad or article or followed a friends’ link about some trendy charity concept. Perhaps Kiva or Heifer or SmileTrain or something like that.
Now, let’s say that $3.4 million of money given in this fashion is instead given largely per GiveWell recommendations. More specifically, $400K is in some fashion channeled to support GiveWell itself, and $3 million is given to charities highly rated by GiveWell.
How many utils of good are being done?
By a VERY simplistic (but wrong, IMO) analysis, it would be 3 million – somewhat less than the 3.4 million that might have been done had GiveWell not existed and ALL the money gone to charity.
But if you believe, as I do, that the best charities are quite possibly 10X or more better on effectiveness measures than average charities, then the GiveWell scenario might, via another possibly wrong analysis, generate 30 million utils of do-goodness. Quite a bit more than the 3.4 million if GiveWell did not exist.
BUT, that compares GiveWell recommended charities to average charities. I suspect that GiveWell readers would have been better at thinking about and researching charities than average donors even if they hadn’t stumbled on to GiveWell. So that decreases the gearing effect of GiveWell recommendations somewhat.
BUT, their are positive secondary effects of GiveWell, in encouraging charities to be open and research their effects, and in encouraging smart giving not only directly among GiveWell followers, but probably to some extent in those influenced by GiveWell followers (second order followers, if you will) and so on.
So it’s all a bit of a messy hodgepodge, perhaps. But I think that if GiveWell reaches a state where its own funding needs are 10-15% of a relatively direct measurement of money moved by GiveWell, then it will be a substantial positive force in charity – leading to more good being created by charity giving than would have been the case had GiveWell been unfunded.
Good analysis, Phil, thanks. It all hinges on the ratio of GiveWell-produced utils/dollar to utils/dollar if GiveWell did not exist, I suppose. Which we can only guess at, but is probably above the break even ratio of 1.13. 🙂
Personally, I feel that GiveWell would do substantial good even at a 1:1 ratio of money moved to operating expenses. That’s what my intuition says about the difference between VillageReach-caliber charities and average charities (even average international charities).
But our goal is for operating expenses to be only 10% of the total “money involved,” because 10% is generally considered to be a very low overhead ratio for a charity. We hope that reaching this figure would mean that there would be pretty much universal agreement that our operating expenses are a reasonable expense (analogous to the money that other charities spend on overhead as opposed to programs).
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