The GiveWell Blog

UNICEF Inspired Gifts: Revolution or donor illusion?

(updated on: ) | by Holden

UNICEF offers you the chance to buy measles vaccines for 100 children for $27.10. And lest you complain that you’ve heard this one before, it assures you specifically that “while other organizations allow supporters to purchase ‘symbolic’ gifts, Inspired Gifts are actual items.”

Is this finally the “real personal connection” donors have been waiting for?

We can’t say for sure. Unlike Kiva, UNICEF provides no information about where the money goes and what projects are in progress. But we can ask a few critical questions:

  • There are many costs for vaccination programs besides the vaccines themselves. Who is paying these costs?
  • If some other party puts up the “fixed costs” for a given campaign (labor, logistics, etc.), but UNICEF’s catalogue only “sells” 1/2 the needed vaccines, will the other 1/2 of the relevant population go unvaccinated?
  • Or will other sources of funds cover the remaining need, making the cost of the campaign essentially fixed? If this is the case, in what sense is the donor “buying” the vaccine?

Our guess is that UNICEF has a large pool of funding allocated to these campaigns, aside from the money that comes in through “Inspired Gifts” (which seems to be paying for very small numbers of items). We would guess that UNICEF will “officially” match up donations through the “catalogue” vehicle to, for example, vaccines while shifting its other funds from vaccines to delivery costs.

Why does all of this matter? Because UNICEF is advertising immunizations for 27 cents apiece. In reality, it almost certainly costs more than that – all things considered – to deliver a vaccination. That would make this another case in which a charity misleadingly zooms in on “your” money rather than considering all costs – a subtle, but substantive, donor illusion.

There’s no smoking gun, though, because there is no transparency.

Quality of life in the developing world

(updated on: ) | by Natalie Crispin

When we argue that donors should give internationally, one of the most common questions we get is, “Sure, you may be able to save a life in Africa, but what type of life are you saving? If you save a child from malaria will s/he likely die from something else soon after? Will s/he suffer from other problems that significantly reduce his/her quality of life?”

We recently published a report on standard of living in the developing world that tries to answer that question. It looks at what facts are available from relatively broad, plausibly representative studies to answer “what is life like in a poor country?” Here’s a summary of what we learned:

  • There’s a strong cross-country correlation between income and reported happiness. The Gallup Poll asked people around the world to rate their life satisfaction on a scale from 1 (the worst) to 10 (the best). People in poor countries are less satisfied with their lives (they ranked their satisfaction as 4.3 out of 10, while rich country residents ranked theirs as 6.7). (More at our review of the Gallup World Poll data.)
  • A child who lives past his/her 5th birthday will likely live a full life. Child mortality is much higher in poor countries than in rich countries. But those who live past age 5 have nearly a 70% chance of living until age 60. (More at our overview of life expectancy in the developing world.)
  • Most people in the developing world do not have AIDS, river blindness or other severe chronic conditions. Many of the diseases commonly associated with the developing world are fairly rare across all developing counties. Fewer than 1 out of 100 people have HIV/AIDS, 1 out of 40 have lymphatic filariasis, and about 1 out of 2,700 have river blindness. (More on the prevalence of disease in the developing world.)
  • Less severe chronic conditions, such as malnutrition and parasite infections, are very common. For example, about a third of children are stunted (significantly shorter than normal due to undernutrition). We are not sure to what extent stunting and other results of a poor or inadequate diet are likely to affect a child’s standard of living over the long term. (More on non-fatal health problems.)
  • Incomes are low, but discretionary spending does exist even among the poorest. People in extreme poverty (defined in the past as under US $1 a day of income) do not spend every “additional dollar” on additional food; they frequently own TVs and radios and participate in festivals. (More on what it means to live on less than $1 or $2 per day)

Bottom line

On one hand, people in the developing world have a tangibly lower quality of life. On the other hand, a life saved probably means many more years of functional life. We feel strongly that it’s worth addressing a major problem (such as tuberculosis or immunizations) even if other problems remain unaddressed.

Not our last word on the Kiva controversy

(updated on: ) | by Holden

Nathaniel Whittemore writes that it’s “time to move on” regarding the recent Kiva controversy. I disagree.

It’s true that Kiva handled the criticism admirably, and made significant changes to its website to improve clarity for donors. It’s also true that Kiva has a stronger case than many for being generally transparent and impactful. Finally, it’s true that those of us who have been blogging about Kiva are a bit tired of the subject.

But none of this changes the fact that many (I would guess the vast majority) of Kiva’s enthusiastic users don’t know how it works, and would be upset if they found out. If you doubt this, just look at the reaction to the recent New York Times story that brought this issue to the attention of people outside our corner of the blogosphere. We may be “over” this issue, but most people have still never heard of it.

The common perception of Kiva – repeated to us by supporter after supporter – is that it enables people to (a) make interest-free loans to (b) the entrepreneurs they personally select. In fact, Kiva users are effectively making gifts (since the loans are interest-free for them, but not for the borrowers) to microfinance institutions. If they knew this, they might prefer giving directly to microfinance charities instead, especially since they’d then be able to get a tax deduction and give significantly more. Or they might prefer another gift entirely – perhaps a health program that offers great impact but no “personal connection,” or perhaps a DonorsChoose project that offers “real” personal connection but arguably little impact.

The time to “move on” should not be based on Kiva’s “handling” the situation or our growing tired of it – it should be based on Kiva’s supporters, by and large, understanding how Kiva works. We think we’re nowhere near that point. We urge those who know the truth about Kiva to continue spreading the word.

Whiplash

(updated on: ) | by Holden

Jenny Aker and Michael Clemens: “Privately and publicly, donors, MFIs and practitioners are expressing concern about the impact of [recent] studies on the future of microfinance.”

David Roodman: “I’ve been surprised by the predominant negativity of the new wave of comments from the NYT article.”

Ultimately, the idea of “true” person-to-person lending is somewhat silly, as are the stories people tell themselves about microfinance. But charities have a tendency to promise donors the sun, the moon and the stars, and donors have a tendency to buy into it.

One problem with this phenomenon is that there’s no mechanism for holding charities accountable. Another problem is that when the truth comes out, there can be whiplash from people realizing things like “My gift might just be helping people get a little more control over their lives, rather than miraculously lifting a person from poverty for every $25 loan.”

Fundraisers: one argument for educating, rather than coddling, donors is that someone is eventually going to educate them anyway. Wouldn’t you prefer that it be your organization, rather than the New York Times (or GiveWell)?

Chess in the Schools

(updated on: ) | by Holden

The New York Times recently profiled Chess in the Schools:

The Chess-in-the-Schools program has sought to foster analytical skills on the theory that these will help students succeed academically. The group teaches 20,000 children a year and calculates that it has taught 425,000 children since 1986. Children gather to learn the game at the group’s headquarters in Manhattan.

It seems like 20 years and 425,000 children is quite a lot of investment in the “theory that [chess] will help students succeed academically.” The Times feature provides a calming justification for the investment: “Chess helps promote intellectual growth and has been shown to improve academic performance.” Let’s look at the evidence for this claim.

The study we found

An early-1990s study looks at achievement test scores of chess-playing students over two years at District 9 in the Bronx. It observes that (a) the overall average reading score improved among chessplayers by about 5 percentile points, but didn’t improve among the set of remaining District 9 students; (b) 15 of 22 second-year participants improved their reading scores by some amount, while only 491 of 1118 non-participants in the district – and 245 of 655 non-participants with high reading scores, improved.

This study is riddled with major problems:

  • The numbers the researchers choose to compare seem arbitrary and possibly cherry-picked. Why do the researchers look at the “percentage who improved” among second-year chessplayers but not for both years? Why do they compare the second-year students to “high-performing nonparticipants,” but not give the same comparison when looking at all students?
  • The problem of selection bias is unusually obvious here. They’re comparing kids who volunteered to play chess against those who didn’t. Think of the chess club members at your school, and ask yourself if they would have been just like all the other kids had chess club not been offered. There’s no reason to think these two groups of kids are otherwise similar or would be expected to respond similarly to school.
  • This is a study of somewhere between 22 and 53 students at a single district in the early 1990s. Even if the study were highly rigorous, it would still be a long way from “proof that chess helps promote intellectual growth.”

The studies we couldn’t find

The Chess-in-the-Schools website states:

In 1991 and 1996, Stuart M. Margulies, Ph.D., a noted educational psychologist, conducted two studies examining the effects of chess on children’s reading scores. The studies demonstrated that students who participated in the chess program showed improved scores on standardized tests. The gains were even greater among children with low or average initial scores. Children who were in the non-chess playing control group showed no gains.

Another study in 1999, measured the impact of chess on the emotional intelligence of fifth graders. The results of the study were striking. The overall success rate in handling real life situations with emotional intelligence was 91.4% for the children who participated in the Chess-in-the-Schools program. In contrast, those who were not involved with the chess program had an average overall success rate of only 64.4%.

We’re guessing that the study we’re looking at is an update of the 1991 study since it references no previous studies and discusses results from 1991 and 1992. We can’t find the other studies anywhere. Chess-in-the-Schools provides neither links nor citations.

Even in the best-case scenario, it’s apparently been at least a decade since the last test of the Chess-in-the-Schools model.

“Chess helps promote intellectual growth and has been shown to improve academic performance?”

In researching charities, one of the more discouraging things we’ve learned is how little support it takes for a statement like “Chess helps promote intellectual growth and has been shown to improve academic performance” to be repeated by charities, donors, and even the media.

As far as we can tell, Chess-in-the-Schools is not a demonstrated success story. It’s just been promoted and scaled up like one.

Perspectives on donor irrationality

(updated on: ) | by Holden

Jeanne Panossian left two very interesting comments on our blog discussing donor irrationality, from the point of view of someone running a small charity.

  • On donor illusions: ” … It takes extraordinary ethical fortitude to openly tell people how complicated your organization is, normally a donor has made their basic decision in the first 15 to 30 seconds of a conversation …”
  • On the administrative expense ratio: “…While I love to talk all day about [my charity’s impact], I have learned it is not worth my while. Waving a flag and telling people how we pay for our paper clips yields me more funds faster …”

Recommended reading.