Note added April 2024: As we explain on our mistakes page, the tone of this blog post, which was written much earlier in our organizational history, fails to convey our uncertainty about the impact of these programs. It also doesn’t indicate that our research involves forming best guesses based on limited information, and that we…
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Gifts of livestock (e.g., Heifer International)
It seems particularly hard to find information about the past impact of “gifts of livestock” programs (such as those promoted by Heifer International). I’ve been thinking about such programs conceptually, though, and I have a lot of trouble understanding the reasoning behind these programs. Two key points: It seems like giving out livestock brings with…
Where we stand on microfinance charity
We’ve thought and written a lot about microfinance lately. As of now, here’s where we stand. What microfinance is and isn’t First, it’s important to recognize that most of what you’ve heard about microfinance is false. It isn’t primarily about funding business expansion.. It isn’t a “proven solution” to poverty. And it doesn’t leverage your…
VillageReach’s answer to the “room for more funding” question: Scenario analysis
We’ve just updated our review of our top-rated organization, VillageReach. (Our July 2009 version is still available for posterity.) The big picture remains the same – we feel this organization has a stronger case for cost-effective impact than any other charity we’ve seen – but there have been changes in VillageReach’s financial situation and plans,…
Incentives for microfinance charities
I’m very concerned about the incentives for microfinance charities. As I see it, these are the things that they are “rewarded” for: Profitability, for obvious reasons. Any for-profit investors in microfinance institutions are presumably putting great pressure on them to produce a good bottom line. (We believe it’s not safe to use profitability as a…
You can’t take the “repayment rate” at face value
We’ve written before about problems with the way a microfinance institution’s “repayment rate” is commonly cited. We’ve been surprised to find that most institutions do not report what most of us would think of as a “repayment rate,” i.e., the percentage of loans/dollars due that have been paid on time. Instead, they report proxies such…