The GiveWell Blog

FAQ: How are we choosing which nonprofits to review?

There are three answers to this. The first is that we eventually want to understand the entire nonprofit sector, because our goal is to do as much good as possible with our dollar. But doing this in the near future is completely impossible (even if we restricted ourselves to charities with budgets of at least $1 million, we’d be looking at over 80,000 organizations in the US alone!)

So we have to narrow our scope – drastically.

The second answer to the question is to say how we chose the organizations currently reviewed on GiveWell.net. Some context is necessary for this. GiveWell began as an informal project, a collaboration between friends who wanted to accomplish more good with our donations. We knew we had to bite off something we could chew, so each of us chose a cause that we were personally interested in, found organizations that focus on it, and started digging for more detail on what they do. Our goal was to find great organizations to donate to, not to be comprehensive, and we reviewed the best organizations we found; the result was the website currently up at GiveWell.net. Our reviews are straightforward about where more information is needed; nothing on this website is, or pretends to be, comprehensive or authoritative.

It was in constructing this website that we determined that the only way to do our project well is through a more concentrated effort. We are going to be far more comprehensive than we were last fall, and far less comprehensive than we hope to be eventually. The third answer to the question is what nonprofits we will seek to review in our first year.

This answer is the most complex, and we haven’t finalized our answer to it. Here’s where we stand now.

We constructed a rough map of all the problems with the world that US-registered charities (which we will be focusing on) address. (Once we make this map intelligible to an outsider, it will be available on our website.) We chose a small subset of these problems with the preliminary aim of (1) helping people who are unfortunate and disadvantaged, but not irrevocably so; (2) translating money directly and reasonably quickly into improving people’s lives, without relying on changing others’ opinions or laws. Our preliminary list of the causes we plan to address is:

Preliminary list of causes

Causes 1-3: aid the poorest of the poor, focusing on Africa.
Cause 1 : Provide for basic human needs including basic health care, food, water, and shelter.
Cause 2 : Fight epidemic curable/treatable diseases, including malaria, diarrhea, tuberculosis, AIDS, measles, and pneumonia.
Cause 3 : Enable economic opportunity through microcredit, job assistance and training, and education.
Causes 4-8: remove barriers to opportunity in wealthy societies, focusing on New York City.
Cause 4 : Provide for basic human needs including basic health care, food, and shelter.
Cause 5 : Aid early-childhood development, through child care and programs such as Early Head Start.
Cause 6 : Improve educational opportunities through charter schools, summer schools, after-school activities, and public school reform.
Cause 7 : Enable economic opportunity through microcredit, job assistance and training.
Cause 8 : Protect women from domestic abuse.
Causes 9-10: bring people from extreme suffering to fully enabled lives in one step.
Cause 9 : Facilitate the adoption of disadvantaged children by self-sufficient families, focusing on China.
Cause 10 : Provide full-service boarding schools to the impoverished, focusing on South Africa.

In focusing on certain regions, we are not saying that these are the only regions worth assisting with donations – we are just narrowing our scope so that we can have an attainable goal. We took the existing structure of the nonprofit sector into account, which explains why the regions vary so much in size (most of the charity in New York City is done by organizations focused on New York City, whereas most of the charity in Nigeria is done by organizations with a broad mandate of serving Africa).

Since we aim to serve US donors, we will focus initially on US-registered 501(c)(3) charities with annual expenses of at least $1 million. We want to be able to recommend these charities without fear that they’ll attract donations beyond what they can use effectively.

We will also generally not evaluate other grantmakers (such as private foundations), unless they are providing something concrete (such as consulting services or measurement) along with their evaluations, enough to justify the extra expense and loss of discretion that comes with passing money through another grantmaker.

All of this is preliminary and highly open to discussion.

(As a note to Matt, who asked this question: we are still considering Romania as a possible region of focus along the lines of causes 9-10; this list is the most likely one we will end up with for our first year, but HopeChest’s area is not far from where we’re focusing.)

Introducing FAQs, blog style

Beyond Giving asks us several questions on important topics that we’ve talked about a lot but haven’t written about yet. The new “FAQ” subcategory on this blog is for posts that directly answer a common question about our project.

Here are Beyond Giving’s questions:

1) What’s your evidence that you can accomplish your stated goal of analyzing and comparing nonprofits with each other to determine which one’s can most improve the world? What objective criteria will define “the best” nonprofits to support?

2) While on that topic, please also discuss what best-practices you have employed to ensure that your results are reliable and valid from a statistical standpoint? And, how did you select the organizations to interview?

3) In developing and employing your rating system, have you consulted with any experts on philanthropy, nonprofit management, fundraising, board governance, outcomes measurement, program evaluation, or any other related field in your project? In other words, what qualifies you to issue ratings of any kind?

There are three important topics here that we haven’t written about, though the topics don’t correspond exactly with the questions. I would say the topics are:

1. Scope – how do we pick organizations to review?

2. Criteria – how do we decide where to give our money and endorsements?

3. Expertise – what qualifies us to do reviews and why should people trust us?

I think that if I address these satisfactorily, I’ll cover Beyond Giving’s questions (Matt, if I’m wrong, just comment on it). So here we go.

I am not a flake

I said we would update this blog every Tuesday and Saturday. It says so right over there on the left. Today I am swamped, and I might not be able to give you the Tuesday masterpiece I’m sure you’re addicted to.

I have more pet peeves than anyone else I know, and one of the very biggest ones is what I call flakes: people who say they’ll do something, then back out without giving me the communication I need to adjust my plans. Anyone who’s ever stood me up, or even been very late to something without a heads-up phone call, or just forgotten to do something they knew I was counting on them to do, has felt my wrath … thanks to cellphones and email, there is just no excuse.

So this might be an extremely minor example – I doubt the number of people anxiously refreshing their reader for the latest GiveWell post exceeds 10,000 or so – but if I flaked out, I’d have to punch myself in the face, and I don’t want to do that. Here’s your heads-up. There will be a new blog entry late tonight or tomorrow morning.

The Holden Foundation: Serving obnoxious bloggers

You know what I wonder, late at night? I wonder whether if Bill Gates had gone the traditional route and created the Gates Foundation at the very end of his life, the Gates Foundation would have been devoted not primarily to education and health (as it is now), but to promoting computer literacy across the world. I think it could have happened, easily, if he’d been too old or too disengaged to be heavily involved: his philanthropic advisors and consultants could have asked “What does Bill Gates want?” and answered “Computer-related charity, because he was a computer guy.”

By thinking of themselves as “serving” him, they would have failed to do so – because they would have assumed his desires to revolve around “creating a legacy” and “fulfilling his personal values” in a narrow sense.

Instead, the Gates Foundation is just trying to help people as effectively as it can, however that is done. Gates is dealing with health and education because he thinks those are the biggest problems. The goal is broad and simple: make the world a better place. That’s what Bill Gates wants. Why wouldn’t it be?

I’m sure some people see charity as a way to please their vanity or create a legacy first, and a way to improve the world second. But is this as common as the world of nonprofit marketing seems to assume (and arguably, by assuming, to enforce)? The conversations I have about charity – including with wealthy people – invariably assume a common goal of helping people however that is best done. Unlike conversations about food or movies, these conversations really have almost nothing to do with personal (i.e., non-shared) values.

Anecdotally speaking, it seems that foundations whose funders are personally very involved (Omidyar, Skoll, Robin Hood, Google.org) are almost universally broad in their missions. Their mission statements have little to do with their founders’ biographies; instead, they’re just pursuing what they think are the most effective means to helping the world. It’s the foundations with dead or disengaged funders that have the narrow, “personal” missions, trying to improve life for 5’11” blue-eyed men or whatever. With no evidence, I blame consultants and marketers who tried to “listen to the donor,” when they would have gotten further by listening to themselves.

The customer is on your side

Crif-Dogs and I have different goals. They want my money; I want their delicious bacon-wrapped hot dog. They have to listen to me and cater to me to win my $4.50 (shut up – it’s well worth it). They might think I’m an idiot to want mustard with my bacon-dog, but they give it to me anyway because it’s what I want. That’s your standard customer-marketer relationship: the customer is always right.

That shouldn’t be how the donor-nonprofit relationship works.

The nonprofit sector is truly unique, because the charity “serving” me wants the same thing I do: to make the world a better place.

If I could just get the charities I work with to understand this, my life would be so much easier. But when I pick up the phone to get information, I run into a marketer (or “developer”). Marketers are taught to serve the customer; charm the customer; make the customer feel good; don’t contradict the customer. So I get salesy fact sheets; I get reassuring platitudes; I get thank-you notes; and when I ask questions that don’t make sense (it happens), I get answers that don’t either.

There’s no good reason for this. If the information I say I want isn’t relevant, tell me why. If helping people isn’t as simple as I’d like to think, explain. If the only way to get me to really understand your organization is to contradict my assumptions, isn’t that what you have to do? What’s holding you back?

Is it that you’re afraid the truth will make me donate somewhere else? If so, what are you doing working for this charity? You got into this business to help people, right?

Is the reasoning a Machiavellian “Get the money to the right place, for the wrong reasons?” You might want to re-examine your assumptions about your donors. How sure are you that they’re really so stupid and myopic? Might the gains you make by babying your donors be offset by the potential donors you’re losing, people who just want to be treated like adults and told what they’re actually paying for? Hint: people who are smart and thoughtful – and hesitant to spend money when they don’t truly understand where it’s going – often end up with lots of disposable income.

Or is the reason you don’t answer our questions that you don’t know what the answers are? Do you really understand what your organization does? Do you really believe that you work for the best charity in the world? If not, why on earth are you spending your life marketing for it?

For-profit marketing might be soulless and salesy, full of people persuading others of what they don’t believe themselves. But nonprofit marketing should be just the opposite. Marketers shouldn’t want to “serve” the donor; they should want the same thing the donor wants. As a nonprofit employee, you’re presumably sacrificing some income to help the particular organization you’ve chosen – that makes you the donor.

The first step to becoming a great nonprofit marketer should be to do great donor-side research, because when you find the organization you believe in with your heart and soul, marketing and transparency are one and the same.

Every time I tried to tell you, the words just came out wrong …

The latest Blog Carnival asks what donors wish nonprofits knew about them, and vice versa. In a way it’s a strange question: the idea of “wishing” knowledge on someone makes me think of forbidden love, or 8th-grade crushes, or at least Jim Croce. It doesn’t seem relevant when discussing two groups of adults that are supposed to communicate.

But while I’m certainly not too shy to tell nonprofits what I want them to know about me, I find too often that they still don’t know it. Here I’ve written out the claims I make that are most often ignored. And I’m glad I have, because I’m seeing a pattern.

1. I see you as competing with other charities.

All charities are trying to help the world, but they’re trying to do it in different ways. It isn’t enough for me to accomplish some good with my donation – I want to accomplish as much good as possible. That means you’re in competition, and that’s why I need so much information. It isn’t because I question your competence; it isn’t because I want to micromanage you (every donation I’ve ever made has been unrestricted); it’s because I have so many problems – and solutions – to choose from.

And if you think your only competitors are the charities “in your space,” think again. I’m not committed to addressing malaria, or diarrhea, or education. I’m just committed to helping the world. Anyone who does that better than you can win my donation away. And they will. Most importantly, they should.

2. I want to know what you’re doing with my money.

I’m deciding where to give $X, so I want to know what that $X is going to pay for. That means I want to see a budget – and at a higher level of detail than “Program expenses, administration, fundraising.” I don’t just want to know that you’re trying to help underprivileged children – I want to know how you’re trying to help them, how much it costs you, how much weight you’re placing on each of your programs, and what my $X is going to allow you to do that you couldn’t have otherwise.

Even the best organizations often can’t produce the kind of budget I’m talking about … and that just shocks me. Knowing how much you spend on each program – and what you’re purchasing (people? materials?) for those programs – is just common sense. For-profit companies can ask, “How much did we spend on airfare this year?” and conclude, “We should start flying coach.” Why do I have to drag a nonprofit kicking and screaming into telling me how much of its funds went to each continent?

3. No, listen. I want to know what you’re ACTUALLY doing with my money.

“You want numbers? I’ll give you numbers! 5c will save a child! $100 will vaccinate a village! $1000 will disband Al Qaeda!”

Sometimes I’m able to find out where these numbers are coming from. When I do, they invariably leave out necessary administrative expenses, ignore labor bottlenecks, and who knows what else. These gimmicks might fool a lot of people, but they turn off a lot of people too. When I talk to my non-giving friends, the most common reasoning I hear is “What’s my money really going to do? Those numbers in the pamphlets can’t be right.”

Administrative expenses are necessary and important. So is stability – the fact is that sometimes my money is just going to sit in a fund, helping to allow long-term planning. The truth about what my dollar allows isn’t as romantic as “20 children saved from death” … but it’s still worth a dollar.

4. I want the truth more than I want reassurance.

An extension of #3. I’ve come to your nonprofit because I want to do good; if I wanted to feel good, I’d go to a massage parlor. If you don’t think the truth is enough to convince me to give, either you think I’m a much worse person than you, or you don’t really believe in your organization. Neither of those is going to lead to great fundraising.

5. I want to help people more than I want good customer service.

The big one – really, the only one, since #1 through #4 are all ultimately motivated by #5.

As I scour the web looking to read about charity, I find myself reading a lot about marketing. (I’m not sure why this is – are marketers such a high proportion of every industry?) I’ve read a lot about making the customer feel listened to, feel important, and feel appreciated. This customer would prefer that you interrupt me, take weeks to get back to me, and call me a poop face, then demonstrate why your organization is a better avenue for improving the world than any other.

If what I say I want (say, minimal administrative expenses) doesn’t make sense, I want you to tell me why, not say you’re working on it. If my questions are based on bad assumptions, I want you to tell me so, not answer them narrowly. I’m not here for the “total experience” – I will trade 10,000 thank-you notes and 450,000 respectful compliments for a tiny bit of extra good accomplished. That’s what I’m here to do. And I’m concerned that the determination to please me is getting in my way.