Several people have recommended that we look at the Fred Hollows Foundation. We have been shown calculations implying that they are preventing or curing a person’s blindness for every $20-60 they spend. As we continue our research on developing-world aid, we checked them out a bit ourselves.

The Fred Hollows Foundation’s programs include surgeries to cure blindness caused by cataracts and trachoma. These surgeries are relatively straightforward and can therefore be performed relatively inexpensively (at less than $10 per trachoma surgery, according to the Diseases Control Priorities Project). But the cost per surgery doesn’t tell the whole story – for example, we also want to know:

• How bad would patients’ vision be without surgery? While improving someone’s sight is always valuable, “curing blindness” means something very different to me from helping someone who previously had vision in one eye, or slightly impaired vision in both.
• How old the people are who receive the surgeries? Again, curing blindness always has some value, but it means more to me when it means giving someone a full life of healthy vision (or when it helps someone to care for their dependents).

The Fred Hollows Foundation conducted a 65-person post-operative survey in Cambodia that sheds light on the above questions. (You can see the full report here; this is the only survey of its kind that I found on their website.)

• 44% of those who received surgeries had been able to work before undergoing surgery, as they were “usually only blind in one eye or had some vision in both eyes” (Pg 11).
• 77% of those who received surgeries were over the age of 60 and another 21% were over the age of 41 (pg 10).

I’m excited by the idea of vision correction surgery; it’s cheap and tangible, even considering the above. But these sorts of details about who is being helped significantly change my idea of what you get for your donation with this kind of program, and I’m far from convinced that it ultimately represents a better “value” than our current top health-related charities.

The Career Academies initiative recently released a report on academies’ impact on students eight years after graduation. I’m fascinated by this report and this initiative because:

The Career Academies initiative rejects conventional wisdom about education.

For much of my life I’ve assumed that learning math, reading, and other “liberal arts” related skills is the key to later success in life. All of the K-12 education-focused charities we’ve examined appear to have the same unspoken assumption, stressing the importance of academic success (and generally measuring success through outcomes such as graduation rates and test scores). Last year, however, we started questioning this basic logic (for which we’ve found no empirical support).

Career Academies, while not ignoring academics, explicitly focus on preparing students for specific jobs (for example, see the Introduction of the full report recently released). And according to the evaluation, they are improving students’ earnings without improving their graduation rates or test scores (more below). Rather than assuming that the academic gap is at the heart of the achievement gap, this initiative is going straight after the latter.

The evaluation design used by Career Academies causally connects education with later life outcomes.

None of the K-12 education-focused charities we’ve examined make any attempt to examine later life outcomes, particularly earnings. Only three of them use the kind of experimental design that points strongly to effects of the program, rather than to selection bias issues. The Career Academies evaluation does both – making it the only study I know of that can plausibly discuss the effects of a particular K-12 program on the outcomes we really care about (not test scores, but earnings).

Randomized lotteries were used to assign the limited number of slots at Career Academies, and the lotteried-out students were compared to lotteried-in students a full eight years after graduation. We’re still waiting for the “technical” companion to the evaluation to be published so we can fully examine the methodology, but according to Evidence-Based Programs, the study had important strengths such as low attrition and an intention-to-treat approach that imply that any differences between the two groups (lotteried-in and lotteried-out) can be attributed to the effect of the schools themselves. It found that lotteried-in students report over $200/mo more in earnings (see Pg 13 of the full report), and that Career Academies students report higher earnings whether they’re classified as high-, medium-, or low-risk students (Pg 26).

This benefit came despite no apparent impact (see Pgs 28-32) on traditional measures of educational progress, including test scores, graduation rates, and college enrollment/completion. (Also note that these measures show enormous selection bias; a less rigorous, more typical study would have erroneously concluded that Career Academies do affect academic performance.)

I wish we’d discovered Career Academies earlier, and checked it out as thoroughly as our K-12 applicants. Rather than chasing small (or perhaps illusory) improvements in test scores and/or graduation rates, in the hopes that classic unproven assumptions about the importance of a high school education are correct, we might have funded an intervention with a truly different approach and a truly thorough commitment to making sure it’s changing lives, not just grades.

The National Academy Foundation focuses on the Career Academies approach. We haven’t done a thorough investigation of it, but you might want to check it out.

We haven’t seen – either in charities’ grant application materials or in our own independent research – much discussion of how organizations decide where to focus their resources. This question seems particularly important for international aid organizations, which often work in many regions all over the world (but by necessity have to ignore many more).

When thinking about this question myself, one of the criteria that occurs to me is the triage approach: find regions where a little bit of aid goes a long way. For example, let’s say we’re trying to decide where to expand malaria-centered interventions (such as insecticide-treated bednets). Niger, Guinea, Malawi, and Zambia are all countries with relatively high malaria mortality rates (0.17-0.2%, mostly concentrated among young children). However, Malawi and Zambia also have severe problems with HIV/AIDS: approximately 15% of the adult population is HIV positive and 0.6-0.9% of the total population dies from AIDS each year in these countries. By contrast, Niger and Guinea are significantly less affected by this disease (1-1.5% HIV positive, 0.04%-0.1% mortality rate).

From these numbers alone (and of course there is much more to the story), I’d prefer to expand a malaria-focused intervention in Niger or Guinea than in Malawi or Zambia. Our aim is to help people live fully enabled lives; resolving one problem, in an area where that problem is the primary obstacle a person faces (because s/he can now live a fully enabled life), will have a greater impact than resolving one problem where it is one of many a person faces. I’d prefer to protect children who won’t have to grow up with so much to fear from HIV/AIDS, if I have to choose (and I do).

Of course, to really make this sort of analysis work you need to look at a lot more than by-country rates for two diseases; you need to look at smaller regions (which can vary wildly within a country) and get a full sense of the different problems people face, including not only mortality risks but more general health problems (such as malnutrition), access to education and economic opportunity, and political stability. The goal is to find places where a humanitarian intervention can truly make the difference in giving someone a life of opportunity (not just solve one of an overwhelming set of problems).

References:

• Mortality data (2002 estimates) comes from the WHO’s Burden of Disease Project, available here.
• HIV prevalence data comes from UNAIDS and the WHO’s Report on the Global AIDS Epidemic. We accessed it through Gapminder. You can download it here.

I came across an interesting article on microfinance by Tyler Cowen. Like us, Cowen is skeptical about the common anecdotes focusing on the “entrepreneurial” aspect of microfinance:

For better or worse, microborrowing often entails a kind of ­bait ­and ­switch. The borrower claims that the money is for a business, but uses it for other purposes. In effect, the cash allows a poor entrepreneur to maintain her business without having to sacrifice the life or education of her child. In that sense, the money is for the business, but most of all it is for the child. Such life­saving uses for the funds are obviously desirable, but it is also a sad reality that many microcredit loans help borrowers to survive or tread water more than they help them get ahead. This sounds unglamorous and even disappointing, but the ­alternative —­ such as no doctor’s visit for a child or no school for a ­year —­ is much ­worse.

This account is broadly in line with the position we’ve taken on what microfinance is (likely a very good thing for many disadvantaged people) and what it isn’t (the “make a loan, expand a business” picture that is often used to market it). What’s great about the article is that having made this distinction, it then goes on to give a detailed qualitative picture of how microfinance can actually help people:

Commentators often seem to assume that the experience of borrowing and lending is completely new for the poor. But moneylenders have offered money to the world’s poor for millennia, albeit at extortionate rates of interest. A typical moneylender is a single individual, ­well-­known in his neighborhood or village, who borrows money from his wealthier connections and in turn lends those funds to individuals in need, typically people he knows personally. But that personal connection is rarely good for a break; a moneylender may charge 200 to 400 percent interest on an annualized basis. He will insist on collateral (a television, for instance), and resort to intimidation and sometimes violence if he is not repaid on time. The moneylender operates informally, off the books, and usually outside the ­law.

…if you want to know how much net saving is going on, don’t look at money. Banks may be a ­day­long bus ride away or may be plagued, as in Ghana, by fraud. A cash hoard kept at home can be lost, stolen, taken by the taxman, damaged by floods, or even eaten by rats. It creates other kinds of problems as well. Needy friends and relatives knock on the door and ask for aid. In small communities it is often very hard, even impossible, to say no, especially if you have the cash on ­hand…. Under these kinds of conditions, a cow (or a goat or pig) is a much better medium for saving. It is sturdier than paper money. Friends and relatives can’t ask for small pieces of it…. With a small loan, people in rural areas can buy that cow and use cash that might otherwise be diverted to less useful purposes to pay back the microcredit institution. So even when microcredit looks like indebtedness, savings are going up rather than down.

This qualitative account helps me understand how it is that microfinance can be a worthy intervention, even when clients are carrying persistent debt loads at high interest rates (as they often are). For any region where the picture painted by Cowen holds – i.e., when the only source of credit is moneylenders charging exorbitant interest rates and using the threat of violence – I would happily invest in a microlending program.

But I know there’s at least one good example of a microfinance program that came into a region where credit wasn’t already scarce – and consequently failed to have any noticeable impact. In my mind, this “what are you replacing?” question is one of the very most important questions for a microfinance program – and one that we haven’t seen any organization provide strong documentation on.

I believe that most discussion of microfinance – by nonprofits, by the media, and by donors – is frustratingly superficial, focusing on extreme success stories and simple statistics like the “repayment rate,” rather than on getting a real picture of where microfinance is helping and where it isn’t. Cowen’s take is refreshing, and with more conversation along these lines I hope we can get a better picture of an extremely promising intervention.

Our first year of research implied, to me, that donors can have more impact focusing their giving on the developing world as opposed to the developed world. In a nutshell, developed-world interventions are expensive and the case for their effectiveness is often questionable, while developing-world interventions are often inexpensive and seemingly more reliable.

However, the fact that people in the developing-world face a diverse set of complex, interrelated problems means that well-intentioned interventions can easily have little effect if they’re not properly implemented.

A recent paper (Hotez 2008) may describe a unique opportunity for donors, however. Hotez discusses the existence of Neglected Tropical Diseases (diseases that are by-and-large not life threatening but can significantly disable adults and impair children’s physical and cognitive development) in the United States.

Hotez finds that these diseases largely affect those living in extreme poverty in six regions of the United States: Appalachia, the American South, the Mississippi Delta (including post-Katrina New Orleans), inner cities, Native-American tribal lands in the Southwest, and communities along the U.S.-Mexico border (see his map here). Hotez emphasizes the problems of:

• Helminth (parasitic worm) diseases, which can lead to malnutrition, anemia, and growth and cognitive delays (Hotez et al 2007). These diseases affect a few million people in Appalachia, the American South, and inner cities (see his table here)
• Dengue fever (which can be fatal) and Chagas disease (which can lead to a serious heart problems, (Hotez et all 2007)), which affect a few hundred thousand people in Appalachia and post-Katrine Louisana (see table linked above).

Many of these conditions can be treated with simple, proven interventions that charities distribute in the developing-world. For example, Albendazole can treat helminths, and costs pennies (see Molyneux, Hotez & Fenwick 2005). In addition, basic efforts to control vectors (such as rats and mosquitoes) and improve access to water and sanitation infrastructure may significantly reduce the burden of these diseases.

Since we just came across this paper, we know little about how viable an option this is for individual donors – a quick Google search didn’t turn up any charities obviously attacking these problems in the United States – but we’ll keep our eyes open for one. Fighting these diseases in the developed-world seems like a great option for a donor seeking the biggest impact by using the triage approach: helping those who can benefit most easily.

References:

1. Hotez PJ (2008) Neglected Infections of Poverty in the United States of America. PLoS Neglected Tropical Diseases 2(6): e256 doi:10.1371/journal.pntd.0000256 (Available online)
2. Molyneux DH, Hotez PJ, Fenwick A (2005) “Rapid-impact interventions”: How a policy of integrated control for Africa’s neglected tropical diseases could benefit the poor. PLoS Med 2(11): e336. (Available online)
3. Hotez, PJ., Molyneux, DH., Fenwick, A., Kumaresan, J., Sachs, SE., Sachs, JD., Savioli, L. (2007) Control of Neglected Tropical Diseases N Engl J Med 357: 1018-1027. (Available online)