The GiveWell Blog

Update on GiveWell’s funding needs

(updated on: ) | by Holden

We continue to seek operating support, and we’ve seen some confusion on the part of donors about whether we think that’s the highest-impact giving opportunity available. This post provides an update on our fundraising; it is aimed at close followers of GiveWell, particularly those who have a high degree of trust/alignment with us and are primarily seeking to make the highest-impact gift according to our (personal, admittedly biased) opinion. To be clear, our (the co-founders’) opinion is that for such people (as opposed to the bulk of our donors, who we feel place more emphasis on neutral recommendations, evidence bases, etc.), direct, predictable support of GiveWell represents the highest-impact giving opportunity, up to the point where we hit our excess assets policy (the further revenue required to reach this point would be only a fraction of our projected money moved). Details follow.

We wrote previously about GiveWell’s need for operating funding, stating:

our projected expenses have risen significantly, and we now have the largest projected funding gap in our history: we project ~$1.2 million in expenses over the next year, against ~$850,000 in revenue. We have about $900,000 of reserves available, so failing to close the gap would not mean insolvency, but it would mean drawing on our reserves, something we seek to avoid. So fundraising will become a significant priority until the gap is closed (and may continue until we also have a comfortable level of reserves on hand, i.e., ~12 months’ worth).

Since then, we have reached out to the donors we felt were most likely to provide substantial support, and have also seen some interest in supporting us as a result of our blog post. As of this week, we are now projecting ~$1.1 million in repeating revenue (i.e., revenue that we expect to occur for both this year and next year), still about $100,000 short of projected expenses.

We’ve discussed whether we would de-emphasize fundraising if another $100,000 came in, and we don’t think we should at this point. Our reserves remain below the 12-month level; we expect our expenses to rise substantially in the future; and since much of the revenue we’ve added in to date is from a few very large donors, we still feel we have major room for improvement in terms of diversifying our funding base.

We think a more appropriate target might be to fundraise up to the point where we hit our excess assets policy (at which point further revenue would be granted out to avoid excessive pile-up of reserves). We estimate that ~$850,000 in further revenue would cause us to hit this point; that amount would be only a fraction of our projected money moved.

There are some reasons that supporting us now might not be appealing. We are not in dire straits, and the benefits to improving our position further are admittedly highly intangible (though, we believe, real and important enough to be worthy of our continued effort). In addition, our attitude toward fundraising – particularly with regard to the question of what Good Ventures’s role should be – remains somewhat in flux, and we may change our aims and our policy again in the next few months (though if we do, we will certainly offer supporters a chance to ask that their donations be re-granted if it seems appropriate to do so). Our top charities have stronger evidence bases and higher likelihood of tangible, short-term impact, and we continue to promote these to the general public.

With that said, we wish to be clear that our (the co-founders’) opinion is that direct support of GiveWell represents the highest-impact giving opportunity for donors with a high degree of alignment/trust in GiveWell.

This is not a position we’ve always held (there have been times when we’ve actively discouraged or at least not encouraged direct donations beyond what we were already projecting) or a position we expect always to hold. Much of our thinking is that we expect many of the best giving opportunities we find (now and in the future) to be funded by Good Ventures or by other major donors that we encounter in the future, but the goal of “diversifying GiveWell’s donor base” is something that individual donors can accomplish and Good Ventures can’t.

More on our funding needs at our October post on the subject.

Staff members’ personal donations

(updated on: ) | by Holden

For this post, GiveWell staff members wrote up the thinking behind their personal donations for the year.

Holden Karnofsky

There are good arguments that I shouldn’t give anything this year. I tend to think that future giving opportunities will be better than this year’s, even accounting for the costs of delaying. I expect the best giving opportunities I’m aware of (according to my views) to be funded by Good Ventures or other donors. The best giving opportunity I see that Good Ventures can’t fill is diversifying GiveWell’s donor base, but it doesn’t make much sense for me to donate to GiveWell (it would make more sense to simply lower my salary, or save money so that I can lower my salary later if need be).

Yet it wouldn’t feel right to skip giving to charity altogether (or to give to the organization that employs me). In general, I try to behave as I would like others to behave: I try to perform very well on “standard” generosity and ethics, and overlay my more personal, debatable, potentially-biased agenda on top of that rather than in replacement of it. I wouldn’t steal money to give it to our top charities; I wouldn’t skip an important family event (even one that had little meaning for me) in order to save time for GiveWell work; and along the same lines, I want to give some substantial portion of my money each year in a way that (a) aims at helping the less fortunate (b) can’t be confused with aiming to benefit myself or those in my circle. In addition, cutting a check for the sole purpose of helping others is something I want to stay practiced at.

(Nothing in the above paragraph is absolute. Under certain circumstances, I could imagine reserving my entire charitable budget for a friend’s project; I could also imagine skipping an important family event if the urgency for GiveWell were great enough. But the statements in the above paragraph do represent values that carry substantial weight for me.)

In choosing between our top charities, the main question on my mind is how to directly improve lives the most for my money. (This contrasts with last year, when we asked donors to follow a target allocation in order to optimize incentives, learning opportunities, and capital for organization building. This year, we’ve accomplished the same thing by setting minimum targets, and thanks to Good Ventures, we expect these minimum targets to be hit regardless of what people like myself do.) Because DtWI has a relatively small funding gap that I expect to be closed, I see this year’s choice as being between GiveDirectly and SCI.

In my mind, the question of which has higher expected direct-life-improvement-per-dollar is a difficult one.

  • I have more confidence in the impact of a gift to GiveDirectly. I understand the organization and its process better, and I understand the intervention better. I don’t have the negative intuitive reactions that many have to cash transfers: to me it just feels like the simplest, most efficient way to transfer my wealth to people with less. By contrast, I think of deworming as an intervention whose main case rests on two problematic studies. To compensate for the difference in confidence, the difference in cost-effectiveness ought to be substantial.
  • On the other hand, our best guess says that deworming does about 3x as much good per dollar spent, even accounting as neutrally as we can for the limitations to and questions around the evidence. This is a highly non-robust calculation (see Elie’s comment on how widely reasonable estimates can range), and all else equal I expect further corrections to move me in a more pessimistic direction about deworming (as has been the general pattern with our cost-effectiveness estimates). But 3x – after accounting for concerns over study validity – is a pretty substantial multiplier, potentially enough to overcome my misgivings.

If the multiplier were 10x, I’d feel confident that SCI wins on this dimension. If it were 1.5x, I’d feel confident that GiveDirectly wins on this dimension. But I’m not sure what to do with 3x. The question here largely seems to be how much to discount explicit expected-value estimates, a judgment that I don’t know of a good way to formalize or vet. One of the things I’ve done as I’ve thought through this is talked multiple friends through the issues and – after I’m confident they understand the tradeoffs – asked what they would do. The answers have been mixed, and all of the people I’ve consulted have considered the question of which has the higher expected direct-good-accomplished-per-dollar to be a tough one with 3x being in the “gray area’ mentioned above.

I think that if I were exclusively considering this dimension, I’d be leaning toward SCI, but it would be a very difficult choice. Adding in even a small weight for some of the less tangible factors (which remain factors, though less so than last year) leaves me fairly comfortable with a choice of supporting GiveDirectly.

Elie Hassenfeld

I agree with everything Holden wrote except for his perspective on cost-effectiveness. In the case of deworming, I think there are too many unknowns to put weight on our “best guess” and we’re better served not relying on the results of our cost-effectiveness model when trying to estimate the impact of deworming.

I agree with Holden’s arguments for waiting. The reason I’m giving this year is that given that we’ve identified ways to significantly improve the world via our top charities, something seems wrong about holding my money instead of giving it. I recognize that, on expectation, giving now doesn’t maximize utility, but maintaining a commitment to give substantially every year is important to me. I’m supporting GiveDirectly with the full amount of my charitable donation, but planning to ask GiveDirectly to not include my funds in those counted towards the Good Ventures match (for reasons discussed here).

Alexander Berger

I expect there to be somewhat better giving opportunities next year, but I also find both personal and rhetorical value in giving significantly at least once a year, so I’ve decided to split my donation between GiveDirectly and waiting. I’m planning to give the amount to GiveDirectly that I typically suggest other people (who are able to) should aim for, and save the rest of what I would otherwise give for donating in the future.

Even though I don’t think it necessarily maximizes the return on my charitable dollars–though I’m also not sure it doesn’t–I think this is a good decision for two reasons:

  1. I believe that GiveDirectly is a more than good enough giving opportunity to get the moral case for giving (a lot) off the ground, and I believe that actually giving, rather than saying that I save to give in the future, will make me a more effective advocate for this view when talking to others.
  2. Separately, as a GiveWell employee, I think that when I’m talking to people about my work it’s valuable to be able to say that I use our research. I also find the idea of “eating [my] own dog food” fairly important for myself.

I didn’t find the choice between GiveDirectly and SCI as difficult as Holden did. While I acknowledge the higher estimated cost-effectiveness of SCI, I agree with Elie’s criticism of the limited value of such estimates (though I don’t think they should be fully discarded). I continue to see donations to GiveDirectly as carrying high upside, by helping accelerate the growth of a new organization and the dissemination of the principle that cash is the appropriate benchmark for other charitable interventions, and I find that to be easily enough to outweigh the higher estimated cost-effectiveness for SCI.

That said, these “upside” considerations also present two significant risks that I don’t think we’ve necessarily discussed at great length elsewhere (partly, I believe, because other GiveWell staff are less motivated by the upside consideration than I am):

  1. GiveDirectly’s growth is transient rather than sustained. Most GiveWell donors change their allocations when our recommendations change, and I would expect us to recommend GiveDirectly less highly next year than we do this year (though of course things could change). If GiveDirectly does not develop a significant, sustainable, non-GiveWell funding stream, I think there’s a real risk that this year represents a one-year blip rather than an overall acceleration in their growth as an organization. Accordingly, I’d be excited to see them try to become an organization that would be more successful with fundraising from ordinary individual donors; I also think such donors make up a more natural target for them, since in the long run I expect foundations and GiveWell-driven individual donors to have opportunities that do beat cash. That said, their plan to provide services to government cash transfer programs also strikes me as a reasonable attempt to address this issue.
  2. GiveDirectly focuses on “just moving money to people.” Because so much of the upside I see in GiveDirectly comes from helping establish the idea of cash as a baseline, I think it would be a problem if they focus too narrowly on scaling their existing model, rather than conducting further research and experimentation. (One question I would be excited to see GiveDirectly explore more rigorously is the best size for transfers; I wonder if the current transfers might be large enough that declining marginal returns significantly curtail their value.) I worry that in the course of trying to significantly expand the organization, GiveDirectly might focus too narrowly on simply repeating what they have done before. That said, they have explicit plans for further experimentation, which appear to go a long way towards addressing this concern.

Overall, I find GiveDirectly an outstanding giving opportunity for this year, and I’m excited to donate there.

Natalie Crispin

I feel strongly about giving each year. While my charitable giving is quite modest in the scheme of things, it is generally one of, if not the, largest single expenditure that I make in a year and, as with any large expenditure, I have felt trigger-shy when it comes time to write the check. That’s why, in part, it’s important to me to build up the habit of giving substantially and to work to be more generous as time goes by. I find this couple’s plan to give a little more each year an inspiring way to approach giving.

I plan to support GiveDirectly this year. I considered splitting my gift between GiveDirectly and SCI, but ultimately decided that I have more confidence in GiveDirectly and I believe that SCI will receive substantial funding as a result of our recommendation. I decided not to donate to Deworm the World Initiative for the reason Holden noted.

Eliza Scheffler

As someone who is early in her career and therefore early in her charitable giving, it’s important to me that I get into the practice of giving generously and effectively. In order to formalize this practice, I pre-committed at the beginning of the year to donate a percentage of my income to the organization(s) that I feel will maximize the impact of marginal donations. This year, I’ve decided to give the full amount of my pre-committed charitable giving to GiveDirectly.

Of any of our top charities, I have the greatest confidence in GiveDirectly’s impact and ability to scale effectively. Given that I expect our minimum fundraising targets to be met, I feel best about investing additional dollars in GiveDirectly’s long-term growth. Part of my view is based on our impression that most proven, cost-effective interventions attract substantial funding from governments and international institutions. For this reason, I expect (and hope) that the funding gap for deworming is likely to decrease significantly in the not too distant future, and therefore the room for more funding for deworming charities could be substantially limited. However, the funding gap for cash transfers seems to me, for all intents and purposes, unbounded. I want to invest in GiveDirectly because I feel that it could continue to use funds well as a significantly larger organization in the near and farther future. I also feel there are benefits to building the movement around cash transfers for anti-poverty work more broadly.

I decided to make a much smaller donation this year to Mercy for Animals (MFA). Neither GiveWell nor I have conducted an in-depth evaluation of MFA or a systematic scan of farm animal charities at this point. (For example, I have not looked into Compassion Over Killing, which appears to play a somewhat similar role to MFA. I plan to do more research on this field before next year’s giving season). My impressions of MFA are based mainly off of one conversation I had with Nathan Runkle, its Executive Director (notes forthcoming), and therefore my knowledge and confidence are limited. I decided to support MFA because it works exclusively on farm animal issues, which seem disproportionately underfunded, and because it conducts undercover investigations, which I preliminarily believe to be an important and potentially high-leverage tool for farm animal advocacy. I’m giving to MFA now, rather than waiting for GiveWell to conduct more research in this area, because I expect multiple ag gag bills to be introduced this year and feel that MFA may be particularly well-suited to challenge them. MFA is also a relatively young organization, and I believe there could be benefits to funding it early.

Because of my relative lack of knowledge about MFA or the likely impacts of my donation, I didn’t feel comfortable removing this amount from my pre-committed funds for charitable giving. Instead, I’m taking this donation out of the money I would otherwise have spent on personal consumption or savings. There are other very small donations that I plan to make this year that I include in the same category of “alternative personal consumption,” because they are not aimed at maximizing impact, and they are all personally beneficial or meaningful to me to some degree. These funds include membership fees for civic organizations, money I use to purchase food for people I meet who appear financially impoverished and ask me for food, contributions to my friends’ and family members’ projects, and donations to support the religious community groups in which I participate.

Timothy Telleen-Lawton

Personal giving is a decision with many plausible decision methodologies that could result in very different answers. When facing such a decision, I think it’s useful to entertain several methodologies simultaneously and compare the results with each other and with my intuition rather than focus on making the best single chain of logic as strong as it can be and then accept whatever answer that produces. (More on this idea here.) Full reliance on Cost Effectiveness Analyses is one of the clearest examples of such “best single chain” reasoning, which I think is unnecessarily risky.

My process resulted in an allocation that may be best understood by the following driving factors:

  • Don’t let the publication of my decision or my employment with GiveWell affect my giving decision (for example, don’t avoid giving to GiveWell just because this would make me appear self-serving). This is because I think one of the best values of this post is to give people a chance to see how GiveWell staff think ‘behind the scenes’.
  • When there are clear opportunities to do good, err on the side of giving rather than saving. In addition to the reasons to do this that Holden and Elie mentioned above, I am also not as confident as Elie that giving rather than saving “doesn’t maximize utility” since I have more confidence in GiveDirectly in 2013 than the theoretical opportunities in 2014 (from today’s perspective).
  • When publicly available information supporting top charities is weaker, giving opportunities based on private information becomes relatively more compelling. (See the bottom of this post.)
  • Look for opportunities to engage others in the process of giving thoughtfully in a scalable way (ie not based on private information or overanalyzing how to interact with recommended top charities).
  • If I want to give to something that doesn’t have good impact-maximizing justification, consider its value as miscellaneous spending for personal happiness (and allocate the gift size accordingly), rather than as weakly justified altruism.

Thus I am splitting my charitable gifts into three categories of unequal size:

  1. Personal connection/service giving: I make token recurring gifts to a few non-profits that I have a personal connection to or am served by. I believe each of these has a positive social impact, but I’m not at all sure that this spending is well-justified as effective altruism.
  2. Engagement giving (donations in the name of friends and family members for Christmas or birthdays): All my engagement gifts will be to GiveDirectly or Evidence Action depending on the recipient. Recipients that are excited about traditional aid projects or would be compelled by cost effectiveness estimates will get Evidence Action. Those that are skeptical of traditional aid projects or non-profits generally, think of giving as consumption, want to be as-confident-as-possible in the impact of their gift, are excited by utilizing market forces for better decision-making, or don’t clearly fall into any of these categories will get GiveDirectly. The main reasons I won’t be giving SCI gifts in place of Evidence Action is my excitement for Evidence Action’s evidence-based vision, their staff which I have met, and the organization’s relative youth (such that it may be more influenced by marginal funding than a more mature organization), as well as the SCI update described in this post. My best guess values for our cost effectiveness analysis imply that SCI’s program is slightly more cost-effective than Evidence Action’s program, but I don’t put a lot of weight in that analysis, especially for differences of less than a factor of 2.
  3. Opportunistic giving: If my decision were anonymous I would also give significantly to GiveWell unrestricted this year (and thus am doing so), largely for reasons that I expect to be less true in future years. While it hasn’t received an independent GiveWell-style review, I am nonetheless highly confident in its value for improving the quality of information available for givers in the future and its need for funding now (assuming Good Ventures funding is or should be capped). Critically, I don’t expect it to hit its “minimum funding target”, unlike my expectation for the top charities. Even if GiveWell would ask Good Ventures to break the cap rather than cut its own spending (thus implying that donations to GiveWell are partially fungible with Good Ventures money) I don’t mind being partially funged by Good Ventures because I consider the foundation to be “smart money” and I think it’s appropriate for funders that agree on a good giving opportunity to share the burden of that cost rather than play a competitive “funging game”.

Sean Conley

This year I’m planning to split my giving between GiveDirectly and SCI.

I’m planning to give this year (rather than save for future donations) because I believe that our current top charities represent outstanding giving opportunities and view the potential for better opportunities in the future as uncertain.

Cash transfers and deworming are both programs that are likely to be highly impactful. There seems to be too much uncertainty for any decision between the two to be particularly robust, so I am choosing to support both.

While the Deworm the Word Initiative is also an exceptional organization, I put relatively less weight on its potential to leverage donations and relatively more weight on the fact that it is likely to work in areas with lower worm prevalence than SCI, so my preference is to donate to SCI.

Josh Rosenberg

I agree with Holden that the key questions for GiveWell followers this year are whether to give now or give later and whether to support GiveDirectly or SCI (though I also strongly considered giving to Evidence Action).

After much personal deliberation and late-night discussions with other staff members, I’ve decided to give away half of my planned 2013 charitable budget this year and to save half of it to give away during next giving season at the latest. I’ll be supporting GiveDirectly with my donation this year.

Giving now vs. giving later

I’m giving half of my planned 2013 charitable budget now because I think that GiveDirectly is an excellent giving opportunity, I want to build the habit of making large, yearly donations, I want to concretely commit to my beliefs about my obligation to help people who are worse off than me, and I want to be a credible advocate to friends and family considering giving to GiveWell top charities this year.

I’m saving half of my charitable budget until later because I expect that I may learn of more underfunded and higher impact giving opportunities in the near future, especially because it seems plausible that many health-related giving opportunities could “beat” giving away cash. Particular opportunities that I will be keeping an eye on are:

  • Whether AMF is able to finalize a net distribution
  • Whether SCI shares higher quality information next year
  • DtWI’s progress and room for more funding situation
  • The progress of GiveWell’s strategy to find new top (non-Labs) charities next year
  • The progress of GiveWell Labs

Furthermore, the downside of saving seems low. If all goes well with GiveDirectly this year, they may have a larger funding gap and an even more effective model for giving away cash next year.

By (now publicly) committing to give my saved funds by next giving season, I avoid the problem of feeling like I should wait every year until I find the perfect giving opportunity. This commitment makes me accountable to the decision I made this year and gives me a reasonable timeline to reflect on whether I made the right decision.

Finally, since this is my first year out of college (and, consequently, the first time that I’ve had any significant amount of money to my name), my donation this year will be the largest that I’ve made in my life even though I’m saving half of it. I do not expect that I’ll miss out on any of the psychological/commitment benefits by saving some money this year to give away later.

Choosing between the top charities

My case for GiveDirectly includes:

  • Simple intervention with high confidence of impact
  • Trusts beneficiaries to know what is best for themselves
  • Extremely transparent
  • Great learning opportunity
  • High upside because it may help to popularize cash transfers

The reasons that I’m not donating to SCI include:

  • Recent concerns about evidence of impact
  • Has not been a great learning opportunity so far (in my opinion) because of communication difficulties
  • Possible fungibility with major funders like DfID
  • Seems to have relatively low upside

I’m taking the Good Ventures match on my GiveDirectly donation because (a) I don’t expect that taking the match will offset Good Ventures’s giving until further down the line (at least 10 years), (b) all else equal, doing more charity now seems better (because the world is likely to be better off in the future, because of compounding benefits to GiveDirectly recipients, and because of general uncertainty about the future), and (c) I think it is unlikely that the match will be closed fast enough that other donors will miss out on it.

Other giving

Broadly consistent with the reasoning laid out in this GiveWell post, I think it is important to do some “good citizenship”-style giving, though this giving does not come out of my allocated charity budget and is relatively small. As an avid Wikipedia user, a lover of free podcasts, and a person who benefits from many political initiatives in my community, I’ve decided to commit some donations to these causes.

Ben Rachbach

I’m giving half of the total amount I had planned to give to charity this year to GiveDirectly, and saving the rest to give once I have better giving opportunities, probably within a year.

I’m giving this year because I believe that it is important for me to give every year in order to get into the habit of giving. Also, as a GiveWell employee who advocates to friends and family that they should give to GiveWell top charities, it is important for me to put my money where my mouth is and give to GiveWell top charities yearly.

I’m giving to GiveDirectly rather than SCI or DtWI for reasons captured well in other staff member’s entries on this page, especially that I am particularly excited about GiveDirectly as an organization and excited about cash as the benchmark for effective aid.

I will accept Good Ventures’s match for my donation to GiveDirectly. I expect Good Ventures to make even better gifts in the future, but I am uncertain enough about this to prefer that Good Ventures makes a gift to GiveDirectly now rather than holding money for later.

I am saving half of the money I had planned to give this year because I believe that better giving opportunities may soon be available.

First, I believe that GiveWell is likely to find giving opportunities within the next year for which my marginal dollar will have a greater impact than giving to GiveDirectly now.

Second, instead of giving to a charity recommended by GiveWell, I might give to a charity that GiveWell may not investigate soon. I’m particularly interested in giving to a farm animal welfare charity such as Mercy for Animals or the Humane Society of the United States (earmarked for its farm animal welfare work) because I think that this is potentially an excellent giving opportunity according to my values. I may value animal welfare more than GiveWell. A combination of placing a potentially lower value on animal welfare and of strategic choices about which causes to pursue first in GiveWell Labs may lead to a substantial delay in GiveWell or Good Ventures directing funds to farm animal welfare charities, or they may never direct funds to such charities. As such, if I give soon to such a charity, my donation is particularly unlikely to be fungible with funds directed by GiveWell/Good Ventures and thus may have a higher impact. I need to do more research on such charities and have more discussions with GiveWell staff about GiveWell’s plans before I am ready to give, though.

I’ll comment on this post explaining where I chose to give if, as I plan, I end up giving within a year.

Howie Lempel

I believe that this year there has been a temporary dip in the cost-effectiveness of GiveWell’s recommended charities. In particular, I’d guess that cash is substantially less cost effective than the best developing world health interventions. I think this dip will be temporary because:

  • AMF may execute a distribution in the next year.
  • GiveWell’s staff size recently doubled.
  • GiveWell only very recently learned that AMF would not have room for more funding.

The best counterargument I’m aware of is that GiveWell has tried and failed to find more funding gaps for health interventions in the past.

I am persuaded by Carl Shulman’s argument that a temporary dip in recommendation quality favors delaying donations to GiveWell’s top picks, so I ought to hold off on donating. I plan to give half my planned amount anyway because giving is something I look forward to every year. By saving the other half to give in the future, I’ll be breaking a pledge to give away a certain percentage of my income every year.

I’m very excited to split my donations between unrestricted funding for GiveWell and GiveDirectly. I’m giving to GiveWell because I expect supporting GiveWell’s research to have a higher impact than any other giving opportunity I’m aware of.

I also want to give money to an organization that actually implements programs and an organization that is not my employer. I chose to give to GiveDirectly because I think that cash grants make enormous impacts on poor people’s lives while respecting their wisdom and autonomy. I disagree with Good Ventures’ decision to use a match and would prefer that my donation not appear to be influenced by the match, so I’m going to ask that my donation not be matched. For reasons Holden addressed, I also struggled to decide between cash and deworming.

I thought seriously about giving to a couple of other organizations that I thought might be even more cost effective than GiveDirectly. In particular, I thought about giving to a farmed animal welfare charity and have decided not to yet for reasons similar to Ben’s. I also thought seriously about giving unrestricted funds to Evidence Action because I’m excited about their upside but I believe they will already have enough funding to grow a reasonable amount this year and I don’t think they’re an organization that could scale as quickly and easily as GiveDirectly.

Jake Marcus

I feel indebted to my colleagues and to a broader community of effective altruists for their thoughtfulness on how best to give. My discussions with this group have led me to consider the following questions for my giving this year:

  • Should I give now or give later?
  • Should I give now to giving opportunities not recommended by GiveWell?
  • Should I give now to GiveWell?
  • Should I give now to GiveWell’s top charities?
  • How much should I give now vs. give later?

Should I give now or give later?

I’m committed to setting aside a percentage of my income every year for charity. As a GiveWell employee, it helps me think more critically about where I recommend others donate. It also helps me build a habit of giving and hopefully inspires others to give. I think that contributing this set amount to a donor-advised fund largely accomplishes these goals, therefore this commitment does not preclude deferring my choice of where to give in order to take advantage of better giving opportunities in the future.

Should I give now to giving opportunities not recommended by GiveWell?

The large amount of money now moved by GiveWell’s recommendations and the greater involvement of Good Ventures have led some to consider the impact they might have by diverging from this pool of funds, especially if they hold different values on particular issues. I haven’t seriously considered this option, because I feel my values closely align with these two organizations and, as a relative newcomer to philanthropy, still place a lot of trust in expert opinion on where to give.

Should I give now to GiveWell?

Since GiveWell projects a funding gap, some have considered donating to GiveWell itself. I believe that donating to GiveWell represents an outstanding giving opportunity and would strongly consider doing so if I were not an employee. Because I think GiveWell will succeed in closing the funding gap, I’d prefer for others to give thereby diversifying the organization’s donor base rather than to have current stakeholders, such as employees, further increase their commitments. In most cases when talking to more casual donors, I still recommend giving to top charities rather than GiveWell, because I believe an argument that doesn’t seem self-serving will be more persuasive.

Should I give now to GiveWell’s top charities?

I believe that this year’s top charities represent outstanding giving opportunities.
For most potential donors, I think that giving to top charities this year will only increase their involvement in future years. Though the number of donors interested in effective giving has greatly increased over the past few years, effective altruism remains in its infancy. Therefore, I feel that giving to top charities has additional value in so much as it counts as a “vote” for the importance of combating global poverty and promoting transparency in philanthropy. It demonstrates to the world the growing influence and acceptance of these ideas. I also think that giving some amount of money to top charities each year gives me more credibility in persuading others to give than if I save my entire charitable budget to give later. For these reasons, I’m giving to top charities this year.

For the additional dollar going into top charities now, I have the highest expectation for GiveDirectly, but I also feel that a donation to SCI and Evidence Action has some value in casting a vote for top charities. Therefore, I’m giving the bulk of what I give now to GiveDirectly and small donations to SCI and the Deworm the World Initiative.

How much should I give now vs. give later?

I originally planned to give now rather than saving to give later, but then reversed my decision. I realized that I had implicitly lowered the level of my charitable budget, because of my discomfort, but then argued to give “all” of my lowered charitable budget. For me, this reversal underscores the importance of choosing to donate an emotionally salient amount of money if you want it to motivate you to think critically about where to give.

With the exception of the smaller percentage of my charitable budget that I’m giving to top charities in order to accomplish the goals I describe in the previous section, I plan to save to give later by contributing to a donor-advised fund.

As large an impact as giving to top charities now might have, I’m optimistic that GiveWell will find even better giving opportunities in the near future. I’m not sure that the gap between this year’s best giving opportunity and next year’s will greatly exceed the gap between next year’s best giving opportunities and the best giving opportunities 2 years from now and so on for the next several years as the organization continues to rapidly grow and learn. Still, I’m inclined to believe that this year I should save to give later. On a personal level, I have a good reason to believe that this coming year might influence my choice of where to give more than other years, because I recently started as a GiveWell employee and thus will be thinking a lot more about philanthropy.

Process for putting together this post:

  • Holden wrote the intro and his entry and sent to Elie. Elie wrote his entry.
  • Holden asked staff to tell him privately (a) whether they’d like to write an entry; (b) whether they’d like to be anonymous; (c) whether they’d like to see his and Elie’s entries first. All staff chose to write something, preferred not to be anonymous, and chose to see Holden’s and Elie’s entries first.
  • Most staff met a few days ago to discuss their thinking. (Holden and Elie did not attend.)
  • Staff sent their entries privately to Holden, who assembled them in order of seniority (length of time employed full-time), with the exception of himself, Elie and Alexander.
  • The draft post was sent out to all staff yesterday. At that point staff were able to make final edits.

Obstacles to “giving as consumption”

(updated on: ) | by Holden

GiveWell’s traditional work (the work behind our current top charities) and our work on GiveWell Labs reflect two very different visions of giving.

  • The first, giving as consumption, sees giving as analogous to making a purchase. For every $X one spends, one gets some desirable outcome (such as a life saved), and the goal is to find giving opportunities that can deliver these outcomes approximately linearly and with good value-for-money.
  • The second, giving as investment, sees giving as analogous to investing in a company. Risk is known to be high, and outcomes hard to foresee in detail (particularly for earlier-stage investments). Rather than asking “What will each $X buy?” one tends to focus more on questions like “Does this organization have a good team and model?” and “Is this organization positioned to have a huge upside, even if one can’t say in advance just what this would look like?”

These don’t represent strict categories – any giving opportunity can be described in the language of either – but they reflect different ways of thinking about giving, and tend toward different ways of evaluating (and describing) the pros and cons of different giving opportunities.

Over the years, we’ve come to believe that “giving as consumption” is an apt framework only for a tiny minority of giving opportunities today – particularly if one seeks strong evidence and cost-effectiveness – and “giving as investment” is likely to be the more broadly useful framework for evaluating giving opportunities. Recent developments with our top charities (see recent posts on AMF and SCI) have moved us further in this direction.

Our audience has expressed (and we have felt) confusion over how hard it seems to be to find proven, cost-effective giving opportunities along the lines of “$X saves a life.” Many of the major funders we talk to – who tend to prefer the “giving as investment” model – have expressed views along the lines of “It’s easy to spend some money, buy some bednets and save some lives; we’re being more ambitious.” Yet we believe that proven, cost-effective “giving as consumption” is a very hard thing to find, and we think we can explain why.

In brief:

  • There are a relatively small number of programs that are strongly evidence-backed, in terms of their ability to improve lives. Evidence about the impact of a charitable intervention on life outcomes is inherently difficult and expensive to collect; it faces a large number of inherent challenges in terms of reliability and generalizability. More
  • Of evidence-backed programs, many are delivered widely via governments and the global aid community. That leaves quite a small number of interventions that both (a) are strongly evidence-backed (b) have room for more funding. In many cases, these are interventions for which the strongest evidence is relatively recent, such as cash transfers and deworming. More
  • Charities often aren’t structured to focus on directly delivering a small number of programs. Charities that do deliver evidence-backed interventions often present a further challenge to the “giving as consumption” model for a couple of reasons: (a) they often seek to promote their programs to governments (in addition to, or instead of, delivering the programs themselves), and (b) they often work on a broad variety of activities (making it difficult to understand the marginal impact of one’s donation). More
  • “Rollout” is rarely straightforward. Because collecting rigorous evidence is expensive, difficult and slow to bear results (along the lines of our first bullet point), there’s often great uncertainty in how a program is adapting – and how relevant its evidence base remains – in new contexts and changing times. More than one of our recommended charities has struggled to reach a new level of scale, and with all our priority programs there are major questions about how closely the context in which they were studied matches the context in which they’re executed today. More
  • Transparency and accountability present a further challenge. The current culture around charities is one in which nuance, substance and criticism are extraordinarily rare. Even if a charity has relatively strong evidence of impact, it may hesitate to share the technical details and subject itself to the sort of scrutiny – and honest discussion of strengths, weaknesses, successes and shortcomings – that we seek to provide. Doing so is also a major time investment, so the incentive to do so has to be sufficient. As our money moved has grown, we have had more success in getting engagement from charities on this front. More

Below, we expand on each of these obstacles to finding good “giving as consumption” opportunities, and discuss how (if at all) one might work to overcome them. We believe that GiveWell has played a role in improving the quality of “giving as consumption” opportunities, and will continue to do so. At the same time, we think that the “giving as consumption” framework will likely always apply to only a small fraction of giving opportunities, and broadening our horizons (via GiveWell Labs) is essential.

In the meantime, we note that GiveDirectly is the only giving opportunity we can name today that seems to strongly and closely fit the full “giving as consumption” model: focus on an evidence-backed program, using funds to directly implement the program, and producing and publicly sharing strong monitoring and evaluation data from its implementation. This doesn’t mean that GiveDirectly is the best of our top charities: as discussed in our announcement, the others have major potential advantages. But it does mean that our traditional criteria – “proven, cost-effective, scalable” – no longer describe our full set of top charities. Accordingly, we have modified our criteria page and our process page so that they accurately describe what distinguishes our top charities from others – and list what we see as the pros and cons of supporting them. (More details below.)

Obstacle 1: a relatively small number of programs are evidence-backed
We’ve searched extensively over the years for proven, cost-effective programs that charities can deliver. At this point, we believe it’s likely that we’ve identified all or nearly all such programs.

We believe the problems of selection bias and publication bias are serious ones. As such, we’ve become skeptical of much of the research that is published, and we’ve developed principles for how to identify strong evidence. (See Our Principles for Assessing Evidence, How We Evaluate a Study, Surveying the Research on a Topic).

With these principles in mind, strong studies are relatively rare, especially in areas outside of health. A strong study often involves using randomization to create a “treatment group” (receiving a program) and a “control group” (not receiving the program, and thus serving as a basis for comparison); following both the treatment and control group over a long period of time; and seeking objective measures of whether the program improved lives. Such evaluation can be very expensive and take a long time to execute, and thus it can be important to put a great deal of care and planning into it so as not to waste time and resources. Such evaluation generally manifests as academic literature, and we’ve never encountered a case in which a charity continually builds randomized (or other rigorous) evaluation into a substantial portion of its day-to-day programming.

Health programs are generally easier to study than other programs, for a couple of reasons. Appropriate measures to evaluate health programs can be relatively straightforward – death rates, prevalence of various markers and symptoms of disease, etc. – and it often appears that results can be generalized fairly well. By contrast, examining the long-run impact of e.g. an education or job training program on quality of life can involve questionable measures, very long time horizons, and substantial questions over whether the results in the study will generalize to new contexts.

We discuss the proven cost-effective programs we’ve found, and our process for finding them, at Priority Programs.

Prospects for progress on this obstacle. Developing new health technologies and approaches could lead to new priority programs. In addition, there are cases of existing health-based programs that we feel could use stronger evidence than they have (these include deworming and clean water interventions).

Conducting more rigorous studies of non-health programs – as Innovations for Poverty Action and others do – could lead to strong evidence bases for non-health programs. However, creating a strong evidence base for a non-health program appears to be extremely difficult, and we’ve seen it happen only in one case to date (the relatively, though not extremely, strong evidence base for cash transfers). Part of the reason for this may be the inherent difficulty, high expense and long time horizon of assessing non-health impacts in a generalizable way; there may be some more complex contributing factors as well (it seems to us that many of the people conducting these studies are economists, who are often more interested in exploring a general principle and/or demonstrating a new idea than in conducting the second, third, fourth, etc. study on a program that has already been evaluated once).

We’re hopeful that by creating and demonstrating demand for evidence-backed programs, GiveWell can improve incentives for people to carry out more such studies.

Obstacle 2: many evidence-backed programs are delivered widely via governments and the global aid community
We wrote at length about this issue early this year. At the time, one of the major exceptions we saw was that of bednets, but even on that front the funding picture appears to be improving dramatically. Total global health aid is in the range of $30 billion per year and much of the “lowest-hanging fruit” is already picked.

This dynamic is easy to underestimate, because charities may advertise themselves as delivering certain interventions (such as vaccines). However, donations toward this end may ultimately be fungible with other donations. There’s a big difference between “having your donation allocated to paying for vaccine delivery” and “having your donation cause more vaccines to be delivered.”

It’s a good thing that governments and multilateral organizations play a major role in rolling out proven, cost-effective programs. However, it also means that the opportunities for donors to “buy” more of such programs are less common than they may appear.

Deworming and cash transfers are both programs whose strongest evidence is relatively recent. Because of this, they may currently be in a “sweet spot” between becoming widely accepted as good uses of funds and becoming widely rolled out – creating opportunities for private donors to fill gaps before larger funders do, and in some cases to leverage larger funders via advocacy and technical assistance.

Obstacle 3: charities often aren’t structured to focus on directly delivering a small number of programs
The Deworm the World Initiative (DtWI) is an example of trying to take advantage of the kind of “sweet spot” described in the previous section. It focuses on advocacy and technical assistance in order to encourage, and assist, governments to execute large-scale deworming programs. Schistosomiasis Control Initiative (SCI) appears to have a mix of activities: in some cases it uses funds to carry out programs itself, and in others it uses them to fill gaps, do advocacy, and create pilot programs in the hopes of influencing governments and other funders. (For example, see our most recent update on SCI.)

These are very logical activities for a charity – arguably more logical (if they can successfully influence larger funders) than direct delivery. However, these activities pose serious challenges from an evaluation perspective: whereas GiveDirectly can show documentation on programs it has directly carried out, it’s much harder to say just what donations to DtWI have accomplished (and will accomplish).

Another structural issue is that many charities work on a broad variety of activities. We discuss some such charities in a 2011 post. When dealing with such charities, it can be extremely challenging to trace the impact of additional donations.

Prospects for progress on this obstacle. We don’t believe it’s necessarily a bad thing for charities to focus on harder-to-evaluate activities such as technical assistance and advocacy, and accordingly, we’ve modified our criteria so that they no longer require organization-specific evidence of effectiveness. Regarding large broad charities working on a variety of activities, we believe that it may become easier to trace the impact of marginal dollars as the dollar amounts become larger (at a high enough level of funding, one can fund an entire project that wouldn’t have been on the agenda otherwise).

We see hope for progress on being able to evaluate sub-programs of charities that work on multiple activities. Our recommendation of DtWI represents the first time that we’ve recommended an initiative within a larger organization; given the amounts of money moved we anticipate this year, we are comfortable with this and anticipate being able to assess the impact of GiveWell-directed funds on deworming activities relatively well.

Obstacle 4: “rollout” is rarely straightforward
The context in which a program was studied is often very different from the context in which it is now being carried out:

In addition, a charity can hit many unanticipated obstacles as it expands from one area to another:

We generally seek as much monitoring and evaluation as we can from the organizations we review, so that we have a basis for comparing their programs as they are executed today with the programs that studies have demonstrated the effectiveness of. However, as discussed above, we have never seen a case in which highly rigorous evaluation is integrated into a charity’s general activities; the data that is available generally has major limitations (many of which aren’t immediately apparent – for example, see our recent post about SCI’s evidence of impact).

Prospects for progress on this obstacle. Changing contexts will always be a real challenge, but we are optimistic that we will see more, and better-designed, monitoring and evaluation over time to act as a diagnostic. We feel that Against Malaria Foundation has dramatically improved its approach to monitoring and evaluation, adding measures to assess whether the insecticide-treated nets it distributes remain in use and are effective over time. GiveDirectly, which is the recommended charity with the strongest overall monitoring and evaluation from our perspective, has only been in existence since 2011. In both cases, we feel that GiveWell’s existence provided encouragement – and funding – for strong monitoring and evaluation, though we can’t make a firm statement about the impact we’ve had (it’s possible that in both cases the same outcome would have occurred if GiveWell had not existed). If we continue to demonstrate strong and growing money moved, and continue to be public about what we see as the strengths and weaknesses of the evidence collected by recommended charities, we expect to see more improvement over time.

Obstacle 5: transparency and accountability
In our experience, it’s almost never possible to understand the case for a charity’s impact based on publicly available materials. Monitoring and evaluation reports are generally internal (and require assistance to interpret); the sort of information necessary to understand room for more funding often requires extensive back-and-forth to obtain. Thus, if we seek to thoroughly understand a charity’s work, it’s generally necessary that the charity voluntarily participate in our extensive evaluation process.

This has been a significant issue throughout our existence. We’ve tried to make participation in our process as attractive to charities as possible, which has generally included sending them previews of content we’d like to publish about them, and the discussions we’ve had around preview content have consistently given us the impression that charities are uncomfortable (more so than other organizations) being discussed publicly in anything but glowing terms. In addition, it has often been surprisingly difficult to get charities to share substantive information even when they have it. We’ve often been connected to fundraising-oriented staff who have sent promotional materials in response to our substantive requests. (For some flavor of this, see the list of grant application responses from our 2007 process; the page is out of date and has problematic formatting but still contains the relevant materials.)

At this time, we believe that the idea of public, thorough evaluations of charities – discussing weaknesses as well as strengths, shortcomings as well as successes – remains a very unusual (and, to many charities, discomfiting) idea. It is a major factor in why there are so few GiveWell-recommended charities.

With that said, there has been real progress.

  • We have seen dramatic improvement over the years from SCI in terms of sending substantive information to help us understand its activities.
  • This year (accompanied by a change in leadership), DtWI changed from an organization that we knew very little about to an organization that participated eagerly and thoroughly in our process, leading to a recommendation.
  • GiveDirectly has been highly transparent since its inception in 2011, when it allowed us to publish a pre-analysis plan for a study on its work. We believe that GiveWell may have played a role in causing GiveDirectly to share more information publicly than it would have otherwise (although its founders have shown what we perceive as a genuine openness to and enthusiasm about extreme transparency).
  • We have also recently seen interest from other charities that previously declined to participate in our process, and we plan to follow these up in the coming year.

Prospects for progress on this obstacle. We are highly optimistic that if we can continue to demonstrate strong and rising money moved, we will see more and more interest from charities in participating in our process and being thoroughly and publicly evaluated.

With that said, we also recognize that participation in our process is a major ask, and this year we have begun providing a list of charities that focuses on evidence-backed programs, regardless of whether they participate in our process, so that donors can support these if they prefer.

Bottom line

There are many reasons it’s hard to find a proven, cost-effective giving opportunity, along the lines of “Every $X I spend accomplishes Y.” We have seen – and perhaps played a role in – substantial progress on some fronts, particularly with regard to (a) improved monitoring and evaluation and (b) improved willingness of charities to share substantive information and be thoroughly, publicly evaluated and followed up. We expect more progress, and we believe that our offerings for donors interested in “giving as consumption” will improve. GiveWell’s money moved provides an incentive for evidence-backed charities to share information, and an incentive for younger charities to build evidence and transparency in from the beginning. We are also contemplating other measures we can take (aside from our charity recommendations) to contribute to progress, such as providing seed grants to help potential future top charities get started.

With that said, some of the obstacles to “giving as consumption” are fundamental, and we now believe that this framework will – for the foreseeable future – apply to only a very small subset of giving opportunities. GiveWell Labs is exploring giving opportunities using a very different framework.

In the meantime, we find ourselves with very little in the way of giving opportunities that we can call “proven,” even though we do have giving opportunities that we consider outstanding (partly due to more “investment” type factors, which we discuss at our top charities announcement).

Accordingly, we have modified our criteria page and our process page so that they accurately describe what distinguishes our top charities from others – and list what we see as the pros and cons of supporting them. In brief, we have removed language implying that charities are “proven” in the sense of having demonstrated their own impact, or “scalable” in the sense that we can precisely predict and quantify the impact of additional donations. Instead, we emphasize that our top charities (a) focus on evidence-backed programs serving the global poor; (b) have been thoroughly vetted, such that even if we haven’t pinned down the answer to each of our key questions, we’ve gathered as much information as we can and can make informed statements about our top charities’ strengths and weaknesses. For those who are concerned that openness to our process is not a desirable quality in a charity, we also provide a more extensive list of charities focused on proven cost-effective programs.

We also now prominently discuss the pros and cons of giving to our top charities:

We think the principal advantages of our current top charities are that:

  • They represent the best opportunities we’re aware of to help low-income people with relatively high confidence and relatively short time horizons. If you’re looking to give this year and you don’t know where to start, we’d strongly recommend supporting our top charities.
  • Due to the emphasis on thorough vetting, transparency, and following up, our top charities represent excellent learning opportunities, and we feel that one of the most desirable outcomes of giving is learning more that will inform later giving. Supporting our top charities helps GiveWell demonstrate impact and improves our ability to learn, and we are dedicated to sharing what we learn publicly.

Some counter-considerations:

  • There is an argument for saving money rather than giving, and giving at the point where better information on top giving opportunities is available. We do expect to make substantial progress on GiveWell Labs over the next few years.
  • If you have access to other giving opportunities that you understand well, have a great deal of context on and have high confidence in — whether these consist of supporting an established organization or helping a newer one get off the ground — it may make more sense to take advantage of your unusual position and “fund what others won’t,” since GiveWell’s research is available to (and influences) large numbers of people.

Good Ventures matching gift to GiveDirectly and grants to top charities

(updated on: ) | by Holden

Good Ventures has announced:

  • Grants to our top charities: $2 million to GiveDirectly, $1.5 million to Deworm the World Initiative, $750,000 to Schistosomiasis Control Initiative.
  • A match, up to $5 million total and $100,000 per donor, on donations made to GiveDirectly from today through January 31, 2014.

Good Ventures spells out its reasoning here.

We very much appreciate Good Ventures’ generous support of our top charities.

These decisions were made by Good Ventures and not GiveWell, but we were part of the discussions leading up to them, and thought we ought to briefly summarize what recommendations we’ve made and thoughts we’ve shared on this front.

On the grants, we advised Good Ventures to do as it did and agree with the reasoning stated in its announcement. We believe that Good Ventures will have better giving opportunities available to it in the future than today, and we also see negative aspects to “crowding out” the donations of individuals, so we did not advise it to close top charities’ full funding gaps, but we did advise it to help ensure that the minimum targets are hit.

On the match, we raised the possibility of matching donations to GiveDirectly. We stated that we saw positive value in encouraging other individuals to give to a top charity, and that we believed money given to any top charity – particularly GiveDirectly, which seems to have the most absorptive capacity and which most staff are favoring for their personal donations this year – is money well spent. Ultimately, Elie and I recommended against the match (feeling that these funds would be better spent on a future giving opportunity), while stating that we believed there were strong arguments both ways and that we respected and supported Good Ventures’ decision. Alexander recommended in favor of the match.

We’re aware of the tension between supporting a match and our previous writing on matches. We believe that a maximally rational approach to giving should not be influenced by most donation matching. However, Good Ventures’ match is targeted at influencing a broad range of donors, many of whom may not fully align with our view and may be positively influenced by the match offer. And we also believe it is not misleading in the way that many matches are: the purpose of the match is to bring in more donors, and there is a legitimate possibility that the full match will not be taken advantage of (in which case those funds simply won’t be donated to GiveDirectly). If the full amount of the match is reached, we believe Good Ventures will be giving more in total to our top charities this year than they would have been had a match not been a possibility.

Good Ventures is more positive on GiveDirectly than on our other top charities, to a greater degree than most GiveWell staff. We’re still planning for individual staff members to discuss their planned personal allocations in the next couple weeks.

Rigorous study of GiveDirectly’s cash transfers

(updated on: ) | by Holden

Carrying out a highly rigorous study is difficult, expensive, and can take a long time. It’s very rare to see a charity that has carried out a highly rigorous study of its own work – one that can isolate the impact of its program from all the other factors affecting its clients. As such, we generally recommended charities running programs that have independently been rigorously studied, and this approach leads to major challenges in generalizing.

  • Against Malaria Foundation distributes bednets, which have been found to save lives and reduce malaria in multiple high-quality studies – but all of these studies were carried out over 10 years ago, when insecticide resistance was less of a concern and general health was likely worse (leading to possibly elevated impacts for nets), and the programs studied were different in some important ways from a typical modern net distribution.
  • Schistosomiasis Control Initiative and Deworm the World Initiative carry out deworming, a program whose case for effectiveness rests on two studies: one on a hookworm eradication campaign in the American South in the early 20th century, and another from a randomized controlled trial in Kenya during El Nino (in which El Nino led to greatly elevated levels of worm infection, and thus likely greatly elevated impact of treatment).
  • Previously, our case for cash transfers rested on a variety of studies looking at programs that were structured differently – in important ways – from GiveDirectly’s program. In particular, they often involved conditional cash transfers (transfers given in exchange for e.g. sending children to school and engaging in other donor-desired behavior) and generally involved smaller amounts given over longer periods over time.

This year, for the first time, we’re aware of a charity that can point to a highly rigorous and recent study of its own work. The charity is GiveDirectly and the study is Haushofer and Shapiro 2013, a randomized controlled trial (with a pre-analysis plan to boot) reporting:

  • Increased consumption across a variety of categories, including food, education, business expenses and durable assets, but not alcohol and tobacco.
  • Improved standing on a food security index (which was one of the topmost outcomes of interest according to the pre-analysis plan) and an index of psychological well-being.
  • An (unelaborated) claim in a recently updated report on the study that spending on iron roofs produced a return on investment of 23%.

There are, as with any study, major limitations.

  • The majority of recipients received smaller transfers than GiveDirectly’s standard program provides (though some received roughly the same size transfer).
  • Much of the data is based on self-reports (though this is also true of other studies, such as those supporting deworming, that look at income and consumption).
  • The study only covers the area GiveDirectly was working in at the time; as GiveDirectly expands, it will encounter substantially different environments.
  • The study is relatively short-term, and we hope there will be follow-ups (we know there are some plans on this front).

More details at our full discussion of the Haushofer and Shapiro 2013

The Economist has also discussed this study.

Overall, this study represents a substantial update on GiveDirectly, and puts it in something of a unique position relative to other charities we’re aware of.

It seems to us that much of our audience overestimates the evidence base for deworming and underestimates the evidence base for cash transfers. In our view, GiveDirectly has – all things considered – the most strongly evidence-backed intervention of our current three top charities (though we’d still say the case for bednets is stronger).

GiveWell’s top charities for giving season 2013

(updated on: ) | by Holden

Our top charities for this giving season are GiveDirectly, Schistosomiasis Control Initiative (SCI), and the Deworm the World Initiative (DtWI) (led by Evidence Action). The first two have been recommended previously. The third is a new addition, and we encourage readers to see our full review.

We’ve had extensive internal discussions about how to rank these three giving opportunities against each other. These discussions have been particularly challenging this year because:

  • The three have extremely different strengths and weaknesses, in our view. Much of the decision between them comes down to judgment calls about how to weigh factors such as (a) estimated cost-effectiveness of a charity’s activities (SCI appears strongest here, in isolation, though some staff discount this observation because of the low robustness of our estimates); (b) potential leverage (DtWI has a potential advantage here, as it focuses on influencing government spending rather than covering all costs with its own funds); (c) a direct and robust case for impact (we believe GiveDirectly is strongest on this front); (d) “upside,” in terms of potential for the charity’s growth to have far-reaching effects beyond the direct impact of its services. (We think all three have some “upside” but see GiveDirectly as particularly promising in terms of its potential to improve the aid community’s understanding of, and interest in, cash transfer programs.)
  • The amounts of money given on the strength of our recommendations could be substantial, and so the question of “what do further donations accomplish?” can have complex answers: for example, the first million dollars to a charity can be quite different in their expected impact from the second million. We lay out what we know about each charity’s funding gap below.

For each charity, we have set out a “minimum target” that we very much hope to see it raise. The targets have no precision to them, but roughly speaking, we see more value in donations up to the minimum target for each charity than in donations beyond the minimum target for any of them. (In other words, if two of the charities had hit their minimum target and the third had not, we would prefer additional donations to go to the third charity until it hit its minimum target.) We believe that each charity will hit its minimum target. We would also be happy to see each charity raise funds beyond its minimum target, and expect that this will happen to some degree.

The minimum targets consider both the nature of the funding gap and the goal of providing positive incentives via rewarding charities that exemplify the values GiveWell is seeking to promote, such as transparency, strong monitoring and evaluation, and full participation in GiveWell’s evaluation process. We believe that all three top charities are outstanding in these respects and thus hope to move substantial funds to each, though we also feel there are some differences on this front that contribute to our differing minimum targets.

When it comes to donations beyond the minimum target, we haven’t reached a clear conclusion on which charities should be prioritized, and feel that donors will decide – reasonably accurately – which charities are the best fit for their own worldview and values with the guidance we provide. Accordingly, we have decided not to provide numerical rankings this year.

Please note that there will be some additional content coming out within the next 1-2 weeks:

  • Good Ventures is planning to announce its own plans re: grants to top charities. We expect this announcement to come this week and expect that it may influence donors’ choices.
  • We are planning to write about the evolution of our criteria for recommending charities, which are being modified from what they were in previous years. This content will not be directly relevant to the choice between charities (this post attempts to summarize all relevant considerations).
  • We are also planning to have individual staff members (who feel comfortable doing so) announce their plans and their reasoning for their own personal giving. In general, the most popular choice internally is GiveDirectly.

The rest of this post lays out what we see as the key considerations regarding the funding gap, strengths and weaknesses of each recommended charity.

GiveDirectly
Funding gap

We provide the details of GiveDirectly’s funding gap in our review. In brief, GiveDirectly has told us that, to facilitate its planning, it aims to raise $40 million, the amount it budgets for 2014 and 2015. It hopes to spend $14 million in 2014 and $26 million in 2015.

As of the writing of this blog post, GiveDirectly has allocated or committed over $5 million to cash transfer campaigns (the vast majority of these funds in the past year), utilizing most of the funds it has received to date from donors.

Our understanding is that the majority of additional donations will go directly to cash transfers, which themselves are part of GiveDirectly’s (a) experimentation with its operational model as it expands and (b) experiments into the impacts of different models of cash transfer programs.

We hope that GiveDirectly is able to close a sizable portion of its funding gap, and have set a “minimum target” of $2.5 million, about half of what it has spent in the last year. We would be relatively comfortable with its receiving up to $20 million, though as it received more funds we would begin to prefer that those funds be allocated elsewhere.

Details on GiveDirectly’s room for more funding

Strengths and weaknesses

  • Program impact and cost-effectiveness. Cash transfers are relatively strongly evidence-backed, and are in the range of our other priority programs’ cost-effectiveness, but our best guess is that cash transfers are 2-3x less cost-effective than the deworming programs carried out by SCI. Details at our updated cost-effectiveness spreadsheet. Our estimates are subject to substantial uncertainty.
  • Monitoring and evaluation. All the programs implemented by our top charities are evidence-backed, but GiveDirectly is the only one that has a randomized controlled trial (finding strong results) of its own implementation of its program. Thus, GiveDirectly has been evaluated in a more rigorous way than our other top charities. We also feel that we have seen stronger evidence of successful execution of its program than for our other top charities.
  • Directness and robustness of the case for impact. We believe there is a highly direct and robust connection between GiveDirectly’s receiving funds and those funds reaching very poor individuals. We believe GiveDirectly to be the strongest of the recommended charities on this front.
  • Transparency and participation in our process. GiveDirectly has been exceptionally open with us, enabling us to understand the full details of its work.
  • Scale. Were GiveDirectly to receive the full level of support it is seeking, this would result in a significant increase in scale. We view this both as a risk and an opportunity. As of the end of 2013, GiveDirectly was distributing cash at a rate of approximately $3.6 million per year; it hopes to reach close to $15 million by the end of 2014. GiveDirectly has scaled up successfully in the past; it had been distributing cash at a rate of $360,000 per year at the end of 2012. For donors who believe GiveDirectly can effectively scale up, this represents an opportunity to provide early-stage funding to an organization that may eventually grow to be much larger. For donors who are skeptical of GiveDirectly’s ability to scale, providing such funds may appear unreasonably risky (though only after the first $5-10 million in support; the first $5-10 million would be consistent with the size GiveDirectly has been to date). Full GiveDirectly review

Schistosomiasis Control Initiative (SCI)
Funding gap

SCI has told us that it hopes to raise at least $4 million for work it plans to undertake in 2014 and believes it could effectively absorb up to $10 million (though some of this spending would spread into 2015). This work would mostly consist of direct implementation of deworming.

Since November 2011, when we first recommended SCI, SCI has received approximately $4.6 million in unrestricted funds. It has spent $2.9 million, committed an additional $1.2 million and approximately $1 million remains unallocated, including approximately $500,000 it had in reserve prior to our recommendation (more).

We have set a “minimum target” of $1 million for SCI, which is consistent with the levels of GiveWell-attributable funding it has received in the past. We would be relatively comfortable with its receiving up to $10 million, though as it received more funds we would begin to prefer that those funds be allocated elsewhere.

Details of SCI’s room for more funding

Strengths and weaknesses

  • Program impact and cost-effectiveness. Our best guess is that SCI’s deworming program is more cost-effective than cash transfers by a factor of 2-3x and 1-2x as cost-effective as DtWI’s deworming program. Details at our updated cost-effectiveness spreadsheet. Our estimates are subject to substantial uncertainty.
  • Monitoring and evaluation. We recently became aware of major limitations to the studies we had previously been relying on as evidence of SCI’s impact. We will be reviewing further evidence that SCI sent us in response; we had not previously focused on collecting such evidence because of our impression that the studies we were using were sufficient. The program SCI works on (deworming) is relatively strongly evidence-backed.
  • Directness and robustness of the case for impact. We believe that the connection between SCI’s receiving funds and those funds’ reaching very poor individuals is more direct than DtWI’s but less direct than GiveDirectly’s. SCI has spent (and plans to spend) a sizable amount of its budget directly carrying out deworming programs, but it also spends funds on a variety of activities related to deworming (e.g., advocacy, operational research).
  • Transparency and participation in our process. From 2009 (when we first made contact with SCI) through mid-2013, we struggled to communicate well with SCI. Since August 2013, our communication with has SCI has improved substantially. We still do not feel that we have the same level of visibility into SCI’s operations as we do into those of our other top charities, and this is a major factor in the relatively lower “minimum target” we have set for SCI as opposed to other top charities, though we are optimistic that this will change in the next year.
  • Scale. Were SCI to receive $5 million, it would represent an increase in the amount of funding it processes. SCI has spent (or committed) approximately $2 million in unrestricted funds in each of the past two years and is currently primarily funded by a 5-year, ~$15 million grant from DFID. It is currently under consideration for a 4-year, $15-18 million grant from DFID. In sum, SCI has been operating at a level of approximately $6 million/year and may soon be operating at a level of approximately $10 million/year (due to the DFID grant). An additional $5-10 million would increase its scale further.

Full SCI review

Deworm the World Initiative, led by Evidence Action (DtWI)
Funding gap

DtWI has told us that it would like to receive $2-3 million to give it the flexibility to pursue opportunities that are not directly funded by other donors. It has also told us that Evidence Action, its parent organization, has a funding gap over the next 2 years of $5-7 million.

Because our analysis has focused on DtWI, we have focused on its funding gap.

We would like to see DtWI close much or all of its gap so that it can have an adequate supply of unrestricted funding, and we have set a minimum target of $2 million. We see significantly less value in funds beyond that point, and particularly past the $3 million mark.

Details of DtWI’s room for more funding

Strengths and weaknesses

  • Program impact and cost-effectiveness. In isolation, our best guess is that DtWI’s deworming program is likely less cost effective than SCI’s (about 50-100% as cost effective) and GiveWell staff differ about its cost-effectiveness relative to cash transfers (1.5-3x as cost effective). This is because worm infections appear less prevalent and (particularly) less intense where DtWI works than where SCI works. However, DtWI focuses on influencing government spending rather than covering all costs with its own funds, and we think it is therefore appropriate to give it some degree of credit for “leverage” – making your dollars go further than they otherwise would. Estimating the degree of “leverage” is highly subjective; our best guess is that it should add a multiplier of about 3 to the cost-effectiveness, making DtWI more than competitive with other top charities on this front. Details at our updated cost-effectiveness spreadsheet.
  • Monitoring and evaluation. We believe DtWI’s self-evaluation to have been less rigorous than that of GiveDirectly, though we are hopeful that it will improve going forward. (As noted above, we are currently revisiting the quality of SCI’s self-evaluation.)
  • Directness and robustness of the case for impact. DtWI is a technical assistance/advocacy organization, and therefore the chain from donation to person helped is the least direct of any of our top charities. This is the flip side of DtWI’s potential “leverage” – because it focuses on influencing and assisting other players rather than on direct implementation, its value-added per dollar spent is quite plausibly higher but also harder to pin down.
  • Quality of communication. From 2009 (when we first made contact) through early 2013, we struggled to communicate well with DtWI. Since early 2013 (which coincided with DtWI changing its leadership), our ability to communicate with DtWI improved substantially. We now feel that we have as much visibility into DtWI’s operations as we do any of our other top charities.
  • Scale. Our understanding is that $2-3 million in unrestricted funds will provide DtWI with flexibility that will be helpful as it grows. Because DtWI requests $2-3 million, we would expect that any funds it receives above $2-3 million would likely effectively support Evidence Action more broadly (e.g., its Dispensers for Safe Water program, which we have not examined although we have published a report on water quality interventions, and potentially other initiatives that it might launch).
  • Fungibility. DtWI is an initiative led by its parent organization, Evidence Action. There is some possibility that funds given due to this recommendation effectively support Evidence Action and its Dispensers for Safe Water program (or future initiatives) rather than DtWI. If donors are particularly concerned about this, they should carefully consider their support of DtWI.

Full DtWI review

A note on Against Malaria Foundation (AMF)
As discussed in this blog post, we are not recommending AMF to donors this year due to lack of short-term room for more funding. AMF currently has access to approximately $12 million that it has yet to commit to funding distributions.

We believe that it is not unlikely that AMF will reach an agreement to use the bulk of its funds in the next 6 months, and therefore would not be surprised if donors choose to continue supporting it.

We will continue to follow AMF’s progress and reconsider its recommendation status if/when it finalizes a distribution.

Full AMF review