The GiveWell Blog

What corporate social responsibility means to me

I find a huge disconnect between what others mean by “corporate social responsibility,” and how I think of it. Here are some of the things I don’t think are part of corporate social responsibility, pulled from a scan of dotherightthing.com (think CSR meets Digg):

People, not corporations, should give to charity. In fact, every penny that a for-profit corporation gives to charity is a penny that it could have given to its shareholders. Those are people, as capable of giving to charity as any other people. And they’re capable of giving using their own judgment and personal values, rather than being stuck with the charities that their CSR committee (most likely more concerned with marketing than with doing good) chooses. If you’re mad that charities are underfunded, yell at the shareholders, not the companies.

More broadly: a corporation is not a person. A person should contribute to society, spend time with his% family, take care of himself% first but also give to charity, etc. (You haven’t heard that you can now gender-neutralize any word by sticking % on the end? Well, I just invented it. Pass it on.) A corporation is a legal entity whose sole purpose is to provide particular goods or services. A person’s life should be well-balanced; a corporation exists to do one thing well.

If the world were a family, the businesses wouldn’t be the cousins and uncles; they’d be the chores assigned to different people on different days. You wouldn’t complain that taking out the laundry is wrong because it doesn’t involve petting the cat, even if petting the cat is a good thing to do. They’re just two different tasks that need doing.

That’s why I think of a socially responsible company, broadly, as a company that uses only what it pays for and charges only for what it provides. Business models built on under-regulated pollution, invasion of privacy, or other violation of property rights are irresponsible. Business models built on addiction, manipulative/deceptive marketing, or flat-out snake oil are irresponsible. And of course, there are some products that I simply feel that everyone (including the consumers) would be better off without, but my opinions on those are pretty personal. If a business can stay away from these dirty tricks and still turn a profit, that means it’s providing something that people are willing to pay for, enough to justify the cost of making it. For a legal entity, what more should you ask?

It’s for charity – but is it for a good cause?

People can get away with some incredible things as soon as they say that what they’re doing is “for charity.” First among these, of course, are the tax advantages that subsidize everything from helping the needy to fighting gun control, convincing people to eat beef, and stockpiling giant piles of cash for eternity. But it isn’t just the IRS that loses all ability to tell right from wrong as soon as the word “charity” comes up. It’s all of us. Except me.

You may not attend a rock concert to benefit beef, but what about cancer research? How about humane societies? Of course, these two causes are in direct conflict over the question of animal testing – many humane societies put significant amounts of their resources directly into trying to illegalize the testing that other “charities” are busy funding.

Charities oppose each other in more subtle ways as well. Going through all these 990s, I’ve really become aware of the huge presence among charities of political advocacy. It’s natural that charities find themselves wanting to address the “root causes” of the problems they address; but as soon as they do this, it’s no longer safe to say that their funds are “going to a good cause” without at least thinking twice. After all, if the legal changes they want to make were completely noncontroversial, you’d think they’d already be made. If you go to a concert to “fight global warming” or “save the environment,” your dollars aren’t going to feed cuddly bunnies; chances are, they’re going to lobbyists, advocates, even demonstrators, with the aim of putting laws in place that might be pro-environment or anti-business, depending on your point of view. And even if you’re on the pro-environment side, it’s worth considering that one of the biggest struggles in politics is not just for position, but for attention and prioritization. When it comes down to it, Greenpeace (saving the environment) and Oxfam (fighting poverty) are largely working against each other – trying to get legislators to pay attention to their issue rather than others.

And at least as big as political advocacy, at least judging by charities’ mission statements, is “raising awareness.” Well, awareness is a zero-sum game too. People only have so much attention span available for things that aren’t sports and diets. You want to raise awareness for Darfur, for global warming, or for Lou Gehrig’s disease? “All of the above” isn’t necessarily an option.

Tooling around through my recent Google alerts (“Charity”), I see a mind-boggling silence on these questions. Indeed, I see Barry Bonds being praised for “giv[ing] some of his own things to charity,” with no mention of what causes he’s supported. I see a whole article on celebrities’ support of charities for Mother’s Day, without the mention of a single charity beyond Eva Longoria’s personal foundation (not a word on that foundation’s priorities). I see plenty of debate on the recent “Idol Gives Back” campaign in terms of whether its “devotion to charity” makes up for its cheesiness … but my question is, what does the ONE campaign (one of its beneficiaries) mean when it talks about “call[ing] for debt cancellation, trade reform and anti–corruption measures”? That sounds like legal change – what does the campaign want and is it a good idea? Nobody else wants to know?

It’s the same old problem: as soon as people hear the word “charity,” their critical faculties turn off. Of course, celebrities and athletes would love it to stay this way – the last thing they need is more questions, just when they’re trying to clean up their image by throwing a few bucks at 501c3’s. But the rest of us would do well to wake up. I’ve said it before and I’ll say it again: if you want to know if someone is doing good things, the best way is to look at what they’re doing.

How personal should your giving be?

A commonplace among fundraisers is that “people take action and give for deeply personal reasons.” This can mean many different things, but one of the implications is that people give to extremely specific, personal causes: diseases that loved ones have suffered from, local charities in areas where they live or grew up, charities that serve their particular ethnicity or nationality.

There are obvious benefits to giving in this way, but I think the costs are underlooked. The fact is, odds are good that your money can do more for more people if you get less personal. Chances are, you and those you love have never been affected by malaria or (severe) diarrhea – but those who are affected suffer in ways that are both severe and cheap to fix. If you can look beyond “someone I love suffered from disease X, so I want to fight disease X” to “someone I love suffered, so I want to fight suffering” – you can make a bigger impact on more people’s lives.

To continue with the crazy analogies that all of you so enjoy: it’s possible to buy clothes that are 100% tailored to your specific body. But for the same money, you can get an entire wardrobe of mass-produced, standardized clothes that fit pretty well.

With clothing, there is a time and a place for each, and generally, people will opt for more personalization as they get wealthier, because the tradeoff between quality and quantity is less acute (i.e., an extremely wealthy person can afford a whole wardrobe of tailored clothes, so why bother with the mass-produced stuff?)

But when it comes to charity, this tradeoff is always acute. The world’s problems – indeed, even just one of the world’s major problems – easily swamp anyone’s and everyone’s ability to fund them away. There are always more suffering people than you can help. That’s why I think it’s a mistake for any donor – even the wealthiest – to default to maximum personalization, insisting on helping “their people” even though it means helping far fewer people. The world needs far more help than any of us can afford to give it; if you needed far more clothing than you could afford, you’d go shopping at K-Mart (or Goodwill) and forget about the tailoring.

There is still a lot of room for philosophy and personal values in what it really means to help a person. I’m certainly not saying we should all give to the same cause. But I’ve always approached my own giving ready to sacrifice personalization (the causes that “speak to me”) for impact (help as many people as possible, as much as possible), and I think others don’t do that sufficiently. That’s why, where others envision a world where donors increasingly have it their way and choose whom to fund in excruciating detail, I envision a world where better and better information allows donors to focus rather than spread out – with the result that we might actually make progress on these problems. The question is: are you willing to give up some “personal resonance” in order to do a better job helping people?

Did you know that this qualifies as a charity?

From the Form 990 of the National Cattlemen’s Beef Association, a federally recognized 501(c)3 public charity (exempt from taxes because of its devotion to the public benefit):

THE PRIMARY EXEMPT PURPOSES OF THE NCBA ARE TO 1) INCREASE CONSUMER DEMAND FOR BEEF THROUGH MARKETING PROGRAMS FOCUSING ON RESEARCH, EDUCATION, PROMOTION & INFORMATION. 2) PROMOTE THE COMMON BUSINESS INTERESTS OF THE BEEF INDUSTRY IN THE UNITED STATES. 3) CONDUCT CHECKOFF FUNDED ACTIVITIES IN COMPLIANCE WITH THE BEEF PROMOTION RESEARCH ACT AND ORDER DATED JULY 18, 1986.

The IRS isn’t going to figure out who’s doing good work for you.

Don’t talk to me about the Form 990

I already knew the Form 990 was useless, but sheesh. Elie and I are currently going through 990s of hundreds of charities, trying to find the ones that might be eligible for Clear Fund grants – we’re currently working on the International category, looking for charities that work in Africa – and I can say that a solid 95% of the time, the 990s of these international charities (including the “Purpose” and “Program Accomplishments” fields) DO NOT SAY WHAT COUNTRIES THEY WORK IN.

As a reminder, the Form 990 is the only information that is publicly available for every public charity. It is where everyone has referred us for “substantive information about charities.” It is the only piece of information used by most charity evaluators, including Charity Navigator. And not only won’t it tell you what a charity does, it won’t tell you where it does it. So please, don’t tell me to look at a Form 990 until you’ve looked at one yourself. Thanks.

I just bought a printer

Like most people who work in an office, I’ve never dealt with buying a printer before, so today I had to start from scratch. An hour ago, I knew nothing about ink vs. laser or HP vs. Lexmark; now, I’ve settled on a Samsung SCX-4200 and I’m feeling pretty good about it.

Why am I telling you this? Because that’s exactly how things should have gone the first time I decided to give to charity, years ago. Within an hour (or maybe a few, since it was a larger and more significant purchase than a printer), I should have gone from “What’s malaria?” to feeling pretty good about my choice of charity. If that had happened, of course, GiveWell wouldn’t exist and you wouldn’t have this awesome blog to read, so maybe everything happens for a reason.

But let’s break this down. Below is how I chose my printer, and how I failed to choose my charity.

1. Starting from nothing: the Google search. Printer: I typed “printer” into Google, scanned down through a few results, and recognized CNet, a big-name review site that I’ve had good experiences with the past. I clicked CNet. Charity: I typed “charity” into Google and clicked the first result, Charity Navigator. So far so good.

2. Broad overview of my options. Printer: Boom. Right on the front page, a link to a printer buying guide that gives me an overview of the pros and cons of different kinds of printers. I read it through and decided that I don’t need color and quality as much as I need speed and convenience – so I’m going with a budget laser. Charity: A bewildering list of mind-bogglingly broad categories; click one and you’ll get pages of results, even if you restrict yourself to the highest-rated ones. The equivalent for printers would be if CNet offered to let me search for the exact printer I wanted, or view its full list of hundreds of “CNet approved” printers. Yech. And keep in mind that the irrelevant criteria Charity Navigator uses are probably most equivalent to a “height of printer divided by smelliness of ink” metric.

I defy you to find anything on the web that does for malaria (for example) what CNet’s review does for printers: succinctly summarize the different approaches and their pros and cons. This doesn’t count.

3. Getting a short list of recommended options. I don’t have time to go through 400 different printer reviews, but I also don’t want the “one size fits all” option just dumped on me. Fortunately, CNet provides its Editors’ picks, with a few specs and a quick overview of each. I picked “personal laser”, scanned the options, and noticed that the Samsung SCX-4200 is cheap and includes a scanner. Sounds great. Charity: nothing (this doesn’t count). Every trusted reviewer or foundation is so committed to “neutrality” that it refuses to narrow the field subjectively – with the result that the consumer is left with hundreds of options, to grind through (not likely) or ignore and end up back where they started (quite likely).

4. Examining a single choice in depth. The Samsung caught my eye, so I checked out CNet’s review. It’s opinionated and honest, giving the pros and cons. It’s a couple pages, with the highlights right at the top. And most importantly, it includes comments from users. I wouldn’t use these comments exclusively – I want to read a systematic weighing of pros and cons from someone who’s taken the time, rather than rely on a few random vague impressions – but I also want a sanity check from people who’ve actually used the thing. Everything checks out, the people complaining about the Samsung seem crazy … so I’m ready to buy. Charity: this doesn’t count.

5. Growing increasingly frustrated with the difficulty of finding good information; asking friends to help me; realizing that there is a giant unmet need that I have to devote myself to attacking. Printer: I skipped this step. Charity: I imagine you know the story.

In the end, I’m not 100% confident that I’ve found the best printer. But I feel pretty confident that I’ve found one of the best ones. Not bad for an hour’s work. Imagine if an uninformed donor could do the same.

Is giving just like buying a printer? No. It’s higher-stakes, and it’s more complex. Creating a guide that’s both fair and usable would be harder than what CNet has done (and what CNet has done isn’t easy).

I would add that charity is more subjective, but that really isn’t true – 90% of what I was looking for in buying a printer was the subjective, unquantifiable stuff, like whether the thing is smooth or buggy and whether it’s easy to use or generally a pain in the neck. I used editors’ and users’ opinions, opinions that are highly general, unprovable, far from ironclad. These opinions aren’t perfect, they’re just helpful.

And, I would add that charity is more emotional … but, I think the opposite is more often true. I think the reason information on printers is so available is because the demand is there, and the demand is there because people really care about getting a good printer. They don’t just want to find one that’s “approved” or “four stars” and leave it at that – they want to get one of the best deals they can. They don’t just want to know that their printer means well – they need the thing to work, so they demand good information.

GiveWell isn’t just for hyper-active donors who need every bit of information; it’s also for time-strapped donors who want to quickly check out their options and come to a pretty good conclusion. That’s what I was, once upon a time. Really, within the causes we cover, the only donors GiveWell can’t help are the donors who don’t care as much about giving a good donation as they care about getting a good printer.

If we create a useful donor resource, and you choose to ignore it in favor of a whim or a compelling picture or a pet cause, don’t tell me it’s because you’re being “emotional.” I say it’s because you’re being lazy, and laziness comes from lack of passion. If you really care whether your printer works, you’re willing to put in some time and read some boring stuff before you buy, and that’s why there’s demand for what CNet supplies. If you really care about helping others, don’t demand any less.