The GiveWell Blog

The Global Fund and transparency

(updated on: ) | by Holden

We recently complained that “UNICEF provides no information about where the money goes and what projects are in progress.” Some might feel that this complaint comes from unrealistically high standards of transparency, especially for organizations such as UNICEF. How is an organization spending $2.7 billion a year supposed to report its activities?

Our answer would be: “like the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) does.” (Page 55 of its 2008 annual report shows that its budget size is very close to UNICEF’s at $2.7 billion.)

GFATM provides an online program search of all its activities. For any grant it has given (example), you can see (if completed) the grant proposal, grant agreement, and reports on progress. In other words, you can see how much has spent and how (and whether) progress has been tracked.

GFATM recently released the kind of document we have never seen from any other charity approaching its size: an overall evaluation of its activities and impact. Not a general discussion of the organization; not a “meta-evaluation” discussing the quality of past evaluations; a discussion of the overall impact of all of GFATM’s activities across the world. Furthermore, this report was in no way a fundraising document; it was frank about the fact that inadequate evidence exists for GFATM’s impact to date (see the discussion at our review).

GFATM comes under a lot of criticism, even from its own evaluators. We ourselves have many reservations about its work, as our review establishes. But we have seen very few charities – and no other charities approaching its size – that can make as strong a claim to being a transparent organization and a learning organization.

GFATM proves that neither size nor celebrity support need stop a charity from being clear about what it’s working on and how it’s going.

Two charities, one microfinance institution

(updated on: ) | by Holden

We’re looking for a good option for U.S. donors interested in supporting microfinance. We’ve been examining the largest, most prominent U.S.-registered charities in this area: Grameen Foundation, Unitus, Accion, Women’s World Banking, Opportunity International and FINCA. All of these are large organizations that list a variety of “partner” microfinance institutions.

One thing that might surprise a donor in this area is that sometimes the “partnerships” overlap. For example, Women’s World Banking lists Enda Inter-Arabe in its network, and so does Grameen-Jameel (which itself is a joint venture of the Grameen Foundation). Neither organization’s profile mentions the other.

Grameen Koota lists the Grameen Foundation and Unitus (among others) as donors and lists Unitus and Accion as consultants. Unitus’s page on Grameen Koota doesn’t mention Accion; Accion’s doesn’t mention Unitus; the Grameen Foundation sounds like its relationship is currently more consultant-like than donor-like.

As you can see from the profiles linked above – and as we’ve found from talking to the large microfinance charities – most (not all) of their activities consist of consulting or “technical assistance,” rather than founding, directly supporting or investing in microfinance institutions. The relationship between them and their “partners” often appears relatively limited, and it’s difficult to pin down who’s responsible for what.

Focusing on technical assistance and consulting isn’t necessarily a bad thing – perhaps U.S. expertise is just what these institutions need to serve more clients and serve them better. But we aren’t sure this is the case – it’s also possible that the U.S. charities have sprung up because of strong donor demand for the “story” of microfinance, and are consulting because they have more than they can productively spend on investing and creating.

What we know is that it’s inherently hard to gauge a charity’s impact when its main activities consist of free (or heavily subsidized) technical assistance. Even if we had all the information we want about the partner MFIs themselves, we’d still need to understand the extent to which help with business planning or product design made a difference to them.

So far, we haven’t seen many signs that the U.S. charities are critically asking this question, or making it possible to hold them accountable for the answer.

Denying the choice

(updated on: ) | by Holden

GiveWell spends a lot of time on the question, “Should I give to charity A or charity B?”

One of the things that has surprised us about the world of charity is how many people insist on answering, “Both” or “You can’t/shouldn’t be asking that question.” To them, all that matters is whether a charity does some good, not how much good it does or how it compares to other options.

One statement of the idea comes from none other than the Jeffrey-Sachs led WHO Commission on Macroeconomics and Health (footnote 24):

Many have asked the Commission what to do if the donor money is not made available—in essence, how to triage with less money. We are asked to prioritize millions of readily preventable deaths per year, since we have already narrowed our focus to a small number of conditions that have an enormous social burden and that have low-cost interventions that are at least partially effective. Not only is this kind of triaging ethically and politically beyond our capacity, but it is also exceedingly hard to do in sensible way. Those who hope for a simple answer, for example to focus on the cheap interventions (immunizations) while putting off the expensive interventions (higher-cost prevention programs and antiretroviral therapy needed to fight AIDS) to a later date, misjudge the practical choices we face. The AIDS pandemic will destroy African economic development unless controlled; to fight measles but not AIDS will not begin to meet Africa’s human and economic needs. It would be wrong to go to the other extreme as well, and let the legitimate need to fight AIDS end up starving the cheaper interventions, so we advocate both. Moreover, the infrastructure developed to fight AIDS will support the infrastructure needed to fight measles, especially if strengthening such complementarities is explicitly built into the AIDS control effort. It is vastly more fruitful to design and finance a comprehensive program that addresses many critical health needs than to pick and choose the apparently inexpensive items.

More examples of this mentality can be seen in recent comments to our blog by John, Yael and Steve.

Our response to these comments is simple. Most donors have a certain amount they are willing to give, and that amount is less than enough to fully fund even one of the world’s underfunded humanitarian initiatives.

We don’t believe that any problem that people suffer from should be ignored or trivialized. We do believe that individual donors must choose which to address, and that they should be factoring in questions like “What evidence is there that my money can even do anything to address this problem?” and “How cost-effectively can I create change by giving my money here?”

In their personal and business lives, people constantly make tradeoffs on a limited budget. Imagine if a salesman tried to argue, “How can you choose between this car and that one? They’re both wonderful cars and each would make the other more useful. You should buy them both!”

Yet in the world of charity, the basic and undeniable idea of triage is constantly denied.

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.