The GiveWell Blog

Guest post from Vipul Naik

(updated on: ) | by Guest

This is a guest post from Vipul Naik about how he decided what charity to support for his most recent donation. We requested this post along the lines of earlier posts by Eric Friedman, Jason Fehr, Ian Turner, and Dario Amodei. Note that this post was written before we published our most recent update on VillageReach.

Early giving: small amounts, based on whims

In September 2007, I joined the University of Chicago for graduate study in mathematics. For the first time, I was drawing a regular stipend that significantly exceeded my financial needs. I could now consider donating parts of my "own" money. Initially, I neither had a strong sense of what I should donate to, nor a burning desire to donate large parts of my savings, though I did have a vague feeling that donating money for worthwhile causes was a nice thing.

My initial "donations" made around December 2007 weren't really donations — they were more gratitude payments to non-profits and organizations that I think have made the world a better place — such as a $100 donation to the Wikimedia Foundation (the non-profit behind Wikipedia). I didn't consider myself a philanthropist trying to achieve specific large-scale change through my giving. Also, my savings weren't very high, and I hadn't mentally adjusted to the concept of making large donations.

Sponsor a kid!

I liked the idea of donating to organizations that serve poor people. However, I wasn't aware of any organization that I considered reliable, and finding one wasn't a priority. In June 2008, I was in downtown Chicago running some errands when I came across street fundraisers advertising for Children International (GiveWell review here), a Kansas-based international NGO that serves children across many developing countries through a one-on-one child sponsorship model. The idea appealed to me (my parents had participated in child sponsorship programs in India). I investigated Children International's website, and three weeks later (July 2008), I decided to sponsor a child for $22/month. A month later, I upped the number of children to two, for $44/month. I continued increasing the number of sponsored children until, around August 2009, the number had increased to 15 kids for $330/month.

Some neat — and life-changing — logic

I read a chapter in Steven Landsburg's book More Sex Is Safer Sex (an expansion of this Slate article) where Landsburg asserted that one should donate to only one charity rather than split one's donations across multiple charities. Landsburg argued that the size of a donation is usually too small to affect the relative merits of different charitable causes — and hence if you chose to give your first $1000 to Charity A rather than Charity B, the same reasoning should continue to apply to your next $1000. "Small" charities are somewhat different, if a donation has sufficient impact on the charity’s activities such that the donation, itself, alters the relative merits of different charities. However, for much of impersonal charitable giving to large causes/organizations, Landsburg's reasoning (and the accompanying mathematics) seemed valid, and I was convinced. (GiveWell has a similar philosophy — see this blog post on triage).

Landsburg's "one charity argument," on the surface, was more reason to keep donating to Children International and simply adjust the quantity donated rather than donating extra money to other charities. Or so I thought. But I gradually realized that the argument isn't merely about donating to one charity, rather, it is about donating to the best charity. I had no reason to suspect that Children International was bad, but I had no basis to conclude that they were the best (or anywhere near). Why did I continue donating to them?

Children International's sponsorship model (as opposed to simply making one-off grants/donations) made it psychologically hard for me to stop donating to them. At the time, I had no idea of candidates for substantially better charities. In hindsight, I should have stopped donating to Children International much earlier, even before I'd found a good charity.

Cutting the sponsorship cord

In late December 2009, I discovered a Bloggingheads diavlog (conversation) between William Easterly and Peter Singer. I'd already read Easterly's books The White Man's Burden and The Elusive Quest For Growth, and I also followed the Aid Watch blog to which he was a primary contributor. I was thus aware of Easterly's work and views on the shortcomings of official aid and development assistance. Peter Singer, a Princeton bioethicist and advocate of greater giving to meet the needs of the world's poorest, was new to me. In the diavlog, Singer mentioned GiveWell, and I followed the link to their website. GiveWell's research and philosophy impressed me. GiveWell did not recommend Children International, but recommended a handful of organizations based on extensive analysis. I wasn't sold on GiveWell's recommendations, but I now had some serious candidates that seemed substantially better than Children International.

I asked Children International to end my sponsorship in February 2010. I decided to not use a regular monthly donation model any more (with its implicit feeling of lock-in) but rather make periodic donation decisions, with due diligence done each time. I wasn't sure of the period: a long period has the advantage that the donation amount is sufficiently large to undertake a more thorough investigation, but this is also a disadvantage. Shorter periods between donations and smaller donation quantities reduce the risk of making a large donation to an organization that shuts down, or closes its room for more funding gap, shortly after I donate.

Discovering VillageReach

I continued to follow GiveWell as well as other blogs on philanthropy, aid, poverty, and development. I was reasonably convinced that low-income country health systems was low-hanging fruit for donor money. The approach of GiveWell's top charity VillageReach (GiveWell review here) impressed me. I made donations of $1250 in March 2010 and $2000 in June 2010 to VillageReach through GiveWell's website.

Around this time, I started feeling that the one charity argument had exceptions. In some cases, I thought, making a donation tied to specific single projects can actually get those single projects done. Around August 2010, I got in touch with a researcher and talked about partially funding some research related to low-cost private education in the developing world. We had extensive correspondence and phone conversations and in September 2010, I made a donation covering part of the costs of a new research project, with the understanding that any cost overruns would be covered by him. The project was successful (albeit with cost overruns) though the research report is not yet published, so I cannot share details right now. I think this was a case where my willingness to come forward with initial money helped accelerate a project that may otherwise either not have happened or happened a year later.

However, such opportunities are rare and inherently risky. In October 2010, I returned to considering VillageReach for my next donation. I talked over the phone with Holden of GiveWell. I shared some concerns:

  • Did GiveWell have a sufficient incentive to critically re-evaluate their own top-rated charities in light of new data?

  • Why was there very little other information or news coverage about VillageReach other than their own website and GiveWell's evaluation of them?

  • Why hadn't any major donor or foundation agreed to cover VillageReach's funding gap?

Holden addressed my questions, and, shortly thereafter, GiveWell elaborated further in the blog posts Health system strengthening + sustainability + accountability and After "Extraordinary and Unorthodox" comes the Valley of Death.

In December 2010, I made a donation of $5100 to VillageReach, my largest to the organization, bringing my total to-date donations to VillageReach at $8350. After donating, I talked over the phone with VillageReach employee John Beale about VillageReach's activities, to help me in future donation decisions.

A new year

I planned to make my next donation around April 2011. GiveWell published an update on VillageReach in March 2011. The good news: GiveWell found no reason, based on VillageReach's latest activities, to modify its analysis of VillageReach's cost-effectiveness. However, the evidence at this stage wasn't sufficiently clear to conclude definitively that VillageReach's current programs would be as successful as (or more successful than) the pilot programs on which GiveWell had based its analysis.

GiveWell's recommendation was responsible for about $1.1 million of roughly $2 million that VillageReach raised in 2010. VillageReach had originally projected a need for slightly under $6 million for their Mozambique project that was to continue till 2014. They seemed to be on track to meet their funding needs. I was now unsure of the value of my marginal donation. I would still have reason to donate to VillageReach if either:

  1. They could deliver demonstrably greater benefits by rolling out their program much more quickly, and they could do so by getting funding more quickly.

  2. GiveWell could identify other top charities so that, once VillageReach's funding gap was closed, other donors could donate instead to these other top charities.

I talked again with VillageReach's John Beale in March 2011, and although I continued to be convinced about VillageReach's effectiveness, I was unconvinced about (1). The key hope was now (2) — could GiveWell identify more top charities soon? GiveWell had already identified finding top charities as their top priority for 2011 (see here and here). However, by end April 2011, I wasn't convinced that they'd be successful. Thus, I decided to hold off my donation.

Independently, I started investigating other forms of philanthropy (such as those covered at the Breakthrough Philanthropy conference). I find some of them promising but don't yet feel confident to make a large donation to any of those organizations. In the mean time, I continue to check out GiveWell's updates on VillageReach and on their search for new top charities.

Somalia / East Africa famine relief donations

(updated on: ) | by Josh Rosenberg

We’ve begun investigating the ongoing famine in Somalia / East Africa. We will be writing more on this topic as we learn more, but for the moment, we wanted to share a few preliminary thoughts:

  • This appears to be a very challenging situation for aid organizations, and it is difficult to determine who is in a position to use donations effectively.
  • That said, we see some reason to believe that it may be a promising giving opportunity for individual donors. It seems quite possible that donations from individuals are more helpful in a situation like this than in situations like the 2010 Haiti earthquake and 2011 Japan earthquake/tsunami.
  • At the moment, we recommend that donors wait until we publish more information, though if you’re looking to make your donation immediately, we provisionally recommend giving to Doctors Without Borders (MSF).

Details follow.

The situation, and why it is particularly challenging

On Wednesday, the United Nations declared a famine in the Bakool and Lower Shabelle regions of Somalia. The famine has caused extreme levels of acute malnutrition in southern Somalia. Much of the rest of the Horn of Africa (which includes Kenya, Ethiopia, Somalia, and Djibouti) is experiencing drought and a food crisis situation as well.

There are estimates that this is the worst famine in the region in 60 years and that it will only worsen in the next 2 months. About 4,000 to 5,000 Somalis per week are traveling across hundreds of miles of desert to reach the Dadaab refugee camps in eastern Kenya. Camps that were supposed to hold 90,000 people now hold about 380,000.

An Islamist militant group called al-Shabaab occupies regions that the famine has hit the hardest. Al-Shabaab has only allowed a few aid organizations to continue operating in southern Somalia and has killed WFP aid workers in the past. With safety concerns present, very few charities have access to the highest-need areas of Somalia.

Why this may be a promising opportunity

Despite the serious challenges, we want to note that

  • A consolidated appeal has been posted to Reliefweb and it is currently fairly far from being fully funded. This is a contrast with the recent earthquake in Japan, for which no such appeal was issued.
  • We’ve raised questions about whether Haiti relief had/has true room for more funding, due to the logistical difficulties in the aftermath of the earthquake – it seems possible that outside aid and money could have made some situations worse, not better. In this situation, there are concerns about the interactions between aid agencies and Al-Shabaab, but if money reaches refugees (for example, in camps in Kenya), the same concerns about logistics would not seem to apply.

The combination of an unusually dire situation, and the absence of some of the issues that held us back from wholeheartedly recommending that donors give to recent earthquake relief efforts, marks this as a situation worth investigating from a maximizing-impact-of-donations perspective.

What we’ve done so far, and our provisional recommendation

We cross-referenced the lists at InterAction and FTS with our list of disaster relief charities, and chose to contact the following:

We’ve only spoken briefly with these organizations (and have not yet heard back from WFP) and can’t yet report on the details. As we learn more, we’ll post updates to our blog.

The representative of MSF in the UK with whom we spoke stated to us that

  • MSF is working on the ground in Somalia providing care to those affected by the famine.
  • The scaling up of aid into Somalia, and to Somali refugees in neighboring countries, is being restricted.
  • MSF is urgently calling for obstacles to humanitarian assistance to be removed.

We have recommended in the past that donors support MSF in response to disasters and, for the time being, we recommend MSF again now. However, we continue to investigate the situation and are trying to speak with other organizations, and we will be publishing updates fairly soon.

Josh Rosenberg is a summer intern at GiveWell. He is currently an undergraduate at Pomona College.

A charity to watch: GiveDirectly

(updated on: ) | by Holden

Note: we sent GiveDirectly an early draft of this post and have made modifications after some back-and-forth.

We’ve been interested for a long time in the idea of simply giving out cash to the very poor, as a promising form of charity, and we’ve long been puzzled over why there don’t seem to be any charities focusing on this approach. In 2009, while acknowledging the potential drawbacks of cash transfers, we argued:

Which would you bet on to get water to people in Kenya: an organization funded by wealthy Americans (motivated by guilt and the wish to display generosity, among other things), or an organization funded by Kenyan customers (motivated by a need for water)?

Why do cash handouts seem to be so rare in the charity world? Perhaps it’s because extensive experience and study have shown this approach to be inferior to others. Or perhaps it has more to do with the fact that giving out cash fundamentally puts the people, rather than the charity, in control.

As of a few weeks ago, there is a charity focused on cash transfers: GiveDirectly. GiveDirectly plans to use the M-PESA system to transfer money using SIM cards, and hopes to give out 90% of its total expenses as cash transfers.

We encountered this group – and had some back-and-forth – before its launch.

GiveDirectly is a new organization and we have not done full due diligence on it: this is not a review. This post simply gives preliminary thoughts on a charity we consider to be worth watching. We have some concerns (see below) and the organization is too new for us to be able to assess these concerns and its general track record. That said, we think it’s worth noting a few things that stand out about GiveDirectly relative to other charities at this preliminary stage, and that we consider to be good examples of the sort of thing we’re looking for and trying to encourage. Most of these revolve around the idea of putting one’s plans on the record so one can be held accountable in the future.

Reasons to be optimistic

  • GiveDirectly has committed to a clear and exclusive focus on a promising intervention. It’s our view that cash transfers ought to be considered the “starting point” for charity: if we had no evidence about the effectiveness of any intervention, cash transfers would be the one we’d support because it most directly empowers low-income people. GiveDirectly states that there is also a substantial case in the literature that cash transfers are helpful, and it’s our impression that this is true (though our investigation of this literature is still in progress and we have not reviewed GiveDirectly’s page on the matter).

    We do think there are some interventions (for example, health programs) with a strong enough track record that it’s reasonable to bet on them over cash transfers. But we’re glad to see donors’ options increasing, especially when the new option is one of the most intuitive ways of helping.

  • GiveDirectly makes clear and specific statements related to room for more funding, i.e., the impact of marginal (as opposed to average) donations. It has committed to give away 90% of received funds as cash transfers and has provided documents for us (see below) regarding how much funding it has the capacity for. Along these lines, we like its statement on transparency:

    To us transparency means more than publishing financial statements. That tells you how we used money last year; real transparency means a clear commitment to how we will use the next dollar you give. It means focusing on providing one, easy-to-understand service; explaining exactly what it costs to provide that service; and doing so without vague language like “overhead” and “program expenses.”

  • Not only is GiveDirectly conducting a randomized controlled trial; it has pre-announced the design of the study. GiveDirectly appears relatively convinced of the merits of cash transfers (see above) but is still conducting a major study to examine the impact of its own work and see whether some versions of the program are more successful than others.

    Our #1 suggestion for making social science research more credible is to “pre-register it,” i.e., announce in advance what data will be collected and how it is intended to be analyzed, so that the final result can be compared with the initial plan and a reader can form their view of whether the results are an artifact of publication bias. We made this case to GiveDirectly and it sent us (see below) a template for the full survey it will be using and a plan for analyzing the data. Now that we have seen these and posted them publicly, GiveDirectly won’t be able to cherry-pick results in the same way that we suspect many studies do. (Of course it will still be possible for the researchers to perform different analysis than they had originally planned; but they won’t be able to sweep any unfavorable conclusions of their analysis under the rug.)

These are major points in GiveDirectly’s favor. We do have some concerns.

Our reservations

  • GiveDirectly is a new organization and does not yet have a track record. Its work could end up failing for many reasons – political, cultural, logistical – and right now its plans for monitoring, evaluation and transparency are just that, plans. We will become much more confident in GiveDirectly if it executes over the next couple of years, succeeds in meeting its commitment of 90% of expenses given out as cash, and continues to self-monitor and publish its data.

    (From GiveDirectly’s response on this point: “What readers should know about potential risks is that (a) while our organization is new, cash transfers are not (see discussion of conflict risk below); (b) we locate recipients prior to accepting donations, so there is little risk of our being unable to electronically transmit a donation; (c) we are therefore able to send 90% of donations to the poor as a commitment, not as a target, and would refund donations if we were unable to follow through.”)

  • We’re uneasy about the idea of giving out cash, transparently, to some people and not others within a community. Incitement of jealousy and conflict seems possible, and if power dynamics are imbalanced enough, we’re worried that more powerful village members may take the benefits away from others. We’ve discussed these concerns with GiveDirectly, and it appears they have taken some reasonable measures to put themselves in a position to assess the extent to which this becomes a problem, but we remain uneasy at the moment.

    (From GiveDirectly’s response on this point: “targeted cash transfers per se are not a new thing by any means, but in fact one of the most widely used and evaluated development interventions … cash transfers now cover between 750 million and 1 billion people worldwide (p. 10) and are one of most researched and evaluated form of development intervention (p. 30), though they remain uncommon in the charity world … What donors should know about us specifically is that we include detailed questions on conflict in our follow up surveys and also as part of our ongoing, independent impact evaluation, which will assess whether transfers increase serious conflicts (such as crime). In the follow up interviews we have conducted to date, we have learned that some people have complained about GiveDirectly because they did not receive a transfer, but we have not learned of any conflict between community members.”)

  • We wouldn’t be comfortable with GiveDirectly raising as much money as its stated capacity. In discussing room for more funding with GiveDirectly, we asked for a statement of the maximum amount that could be given out as (90%) cash grants in the short term. They responded:

    If one supervisor can add enough capacity each month to handle $0.5M for 4 years, or a total of $2M, then $2M per month is an upper bound on our capacity with a single supervisor (i.e. Jeremy). Based on that I’d say I’d start to worry if we were pulling in more than $20M per year — where by “worry” I mean hire more supervisors. I’ll be frank and say I don’t have an objective assessment of how many of these we can readily get our hands on; I don’t think 5 would be hard but I suspect 25 (to get us to $500M annual capacity) would.

    While GiveDirectly’s analysis is logical, we just wouldn’t be comfortable seeing a charity this new and unestablished raise more than a few million dollars (serving several thousand people at $500 per year) over the short term – the risks of poorly spending (or harmfully spending) those funds if its model hit unforeseen challenges would be too great.

    (From GiveDirectly’s response on this point: “Given that cash transfers have received arguably more extensive scrutiny than any other development intervention I think there is plenty of evidence to address such concerns, but of course readers should examine the evidence and decide for themselves.”)

Bottom line: GiveDirectly is too new for us to fully assess the concerns above, but it is definitely a charity to watch.

Attachments GiveDirectly has sent us:

A good volunteer is hard to find

| by Natalie Crispin

We’ve written before about how volunteers often end up costing charities more in time and resources than the work they do for the organization is worth. (Charities seem to justify taking on these volunteers because of they often become donors and informal fundraisers for the charity.)

In our experience, valuable volunteers are rare. The people who email us about volunteer opportunities generally seem enthusiastic about GiveWell’s mission, and motivated by a shared belief in our goals to give up their free time to help us. Yet, the majority of these people never complete useful work for us.

We ask new volunteers to first complete a test assignment that takes about 2-4 hours. The assignment involves fixing the formatting of our list of sources on two practice pages and allows us to get a sense of their attention to detail and commitment to volunteer hours. Of the 34 people who emailed us expressing an interest in volunteering between September 2010 (when we started keeping track) and May 2011, only 7 have completed the test assignment and gone on to complete valuable work for us.

Of the 34, 10 never responded to my email outlining what GiveWell volunteers do and asking them if they’d like me to send the first assignment. 13 responded to this email and I sent them the first assignment, but they didn’t complete it. The final 4 completed the test assignment, but didn’t send back the next (real) assignment I sent.

It seems rather surprising that almost 80% of people who take the initiative to seek us out and ask for unpaid work fail to complete a single assignment. But maybe this shouldn’t be surprising. Writing an email is quick and exciting; spending a few hours fixing punctuation is not.

Our overall success rate may be low, but I think the system works fairly well. Benefits include:

  • It allows us to concentrate our management resources on those individuals who provide a credible signal of their commitment and work ethic. This screen works well for vetting people interested in jobs and internships, as well as volunteering.
  • In cases where volunteers go through the initial screen but don’t turn into long-term contributors, they generally add value by giving us feedback on our work.
  • We’ve identified people who have added significant value. We’ve hired two volunteers: one who is now full-time staff member and another who contributed useful part-time work for about 6 months and is now working with us full-time for the summer. Another volunteer has taken the lead on a difficult and important research project that wasn’t a good fit for any of our staff.

We’ll keeping working with volunteers, not because the time is usually well spent, but because, in rare cases, it’s a great investment.

KIPP Houston has a 1.4 million dollar shortfall. How did this happen?

(updated on: ) | by Wendy Knight

KIPP is one of the most well-known and, we believe, effective charities in the United States: it has a long track record of improving students’ performance in school and Secretary of Education Arne Duncan has cited it as a model for education reform. In our recent analysis of KIPP, we’ve been surprised to learn that despite these accolades, some KIPP schools are considering cuts to core parts of the program (such as reducing Saturday school and the number of teachers available for after-school activities) and are being forced to significantly slow down the opening of new schools. KIPP Houston requires approximately $1.4 million to prevent these cuts and could use an additional $12-13 million productively to fund opening 3 new schools.

How does such a successful and acclaimed organization struggle to raise the funds necessary to continue expanding? We think a big part of the explanation comes down to the fact – which we’ve discussed before at length – that the issue of “room for more funding” (the question of how additional funding would affect a charity’s activities – i.e., the impact of the marginal donation, as opposed to the average one) is neglected by givers.

We came across the close to $15 million funding gap at KIPP Houston by probing the “room for more funding” situation for the KIPP Foundation, the national organization that we have been directing donors to. In the course of conversations on this topic, we ended up agreeing with KIPP representatives that

  • The KIPP Foundation itself doesn’t have short-term “room for more funding”: it is committed to executing against its Board approved budget only. This does require a significant amount of philanthropic funding annually, but current needs pertain to future years.
  • Specific KIPP regions do have room for more funding – and the KIPP Foundation doesn’t generally give grants to these regions (doing so isn’t in its model). The KIPP Foundation directed us to KIPP Houston as a specific KIPP region with a funding gap and capacity to expand.

Bottom line:

  • One of the most acclaimed and effective programs in U.S. education needs $1.4 million to avoid cutting core programs and an additional $12-13 million to continue its expansion.
  • This fact highlights the benefits of deeply analyzing “room for more funding,” something we’ve seen very little discussion of elsewhere in the context of charitable giving.

Details follow. (Note that we still recommend international aid organizations above U.S. organizations; this analysis is most relevant for donors who wish to focus on the U.S.)

Donors who want to support KIPP Houston directly can do so using our donate page for KIPP Houston.

Background

Over time, we’ve put more and more time and thought into the question of how to analyze a charity’s “room for more funding”, i.e., the question of how additional funding would affect a charity’s activities.

  • For the early years of our project, our analysis was loose and conceptual, as we looked at basic heuristics.
  • In December 2009, working with our top-rated charity VillageReach, we arrived for the first time at what we considered a “gold standard” room for more funding analysis, showing specifically how VillageReach would change its plans in response to different levels of total unrestricted revenue.
  • During 2010, we started revisiting our recommended charities looking for a similar level of understanding. One of the first charities to provide it was our top-rated U.S. charity, the Nurse-Family Partnership (NFP). NFP told us that existing commitments can sustain the organization through 2015 at which point the organization would likely need additional donations to continue operations.

    We believe that donations to NFP are good: they provide a long-term safety net to an outstanding organization, and they support the cause of more effective and accountable charity more broadly. Nevertheless, we don’t think it’s fair to consider donations to NFP, today, to be the best option if there are other organizations that would use them to fill a more pressing need.

  • The Knowledge Is Power Program (KIPP) is another U.S. charity we rate highly, and in response to KIPP’s question about how it could improve its rating, we responded that we’d like the best possible understanding of its room for more funding. KIPP Foundation representatives agreed to this and were extremely helpful. They were open that while the KIPP Foundation does not have the same type of long-term funding commitments that NFP has, and does require a significant amount of philanthropic funding annually, it does not have a compelling use for additional funds in the short term. But, the KIPP Foundation went on to clarify that, some of the regional networks (i.e., the actual KIPP schools) in the KIPP family do have pressing, if not urgent, financial needs.

    The KIPP Foundation does not have a mandate to directly fund KIPP schools. (For more on what it does, see our review of KIPP.) The KIPP Foundation told us that some of the regional networks have significant room for more funding. The KIPP Foundation referred us to KIPP Houston, which it believed could significantly benefit from additional funding.

KIPP Houston’s Room for More Funding needs as of July 2011

Based on this lead, we reached out to KIPP Houston, and in speaking with John Murphy, KIPP Houston’s CFO, it became apparent that it has a significant and immediate need for more funding. Specifically, KIPP Houston, which relies on money from the state for close to 85% of its annual operating budget, is planning for expected state budget cuts of 6% for the coming school year and 8.5% the following year, which would leave it with a budget shortfall of 4.7 million for the coming year.

Two notes on the data:

  • The actual deficit would be slightly lower in the upcoming year and slightly higher in the subsequent year, but the average deficit over the 2 years is $4.7 million and our understanding is that KIPP would (we believe appropriately) budget for the two years together.
  • We are relying heavily on KIPP Houston’s expectations for future state cuts. A two-year state budget cut of $4 billion has been passed by the legislature and according to a recent newspaper report (archived), a 6% cut across the board is expected in year one, while the subsequent year’s cut has not yet been allocated across schools, and we do not know when that will occur.

KIPP Houston told us that it expects to be able to raise an additional $1.7 million in donations (relative to what it had previously planned, a 50% increase from the previous year) and that it hopes to save $0.4 million by finding areas of potential savings (through operational efficiencies, etc.), thereby filling around $2.1 million of the funding gap itself. It could also use $1.2 million in bond income to fill the gap, though KIPP Houston told us that this would reduce its ability to expand in the near term because it had intended to put these funds toward expansion.

The remaining gap, estimated at $1.4 million, would need to be addressed through some combination of spending cuts to some of the items listed below; the final decision has not yet been made.

Potential cuts to KIPP Houston Operating Expenses in 2011-2012

Expense Maximum amount
“KIPP Unique” Expenses – These include program areas such as, Field Lessons, KIPP Time (extended day) and Saturday school. Specific changes in this area will be left up to the discretion of school leadership. $2.4 million
Putting a hold on the teaching fellows program (resulting in the replacement of fellows with teacher aides). Specific changes in this area will be left up to the discretion of school leadership. $0.5 million
Freezing administrative hiring for expansion of KIPP Houston’s network. $0.75 million
Reducing employee compensation plans, professional development and/or benefits packages. $0.75 million

We asked KIPP Houston what it would do if it were able to raise additional dollars above and beyond its new fundraising goal (and close some of the gap). Mr. Murphy indicated that since many aspects of the state budget are still up in the air, these decisions have not been finalized, but were KIPP Houston able to raise additional dollars towards its budget shortfall, it would likely reinstitute “KIPP Unique” expenses and employee compensation, benefits and professional development packages first (with much of the details left to the discretion of campus directors), items we see as core to KIPP’s operations. In addition, this tightening of their budget and the use of bond income also means slowing down expansion plans in the Houston area, resulting in fewer students being served by the KIPP program than intended. Mr. Murphy explained:

“We recently were able to purchase property for our 24-26th schools and it is literally right in the heart of our more than 7,000-student waiting list. We could start things up there right away, but right now we can’t afford the construction because our capital is minimized. Those three schools could serve approximately 1,600 kids, but right now we just have to hold off and wait.”

Conclusion

As we’ve written, even a charity with proven impact isn’t necessarily a good investment – a key question is the impact of the marginal donation (not just the average one). For years we’ve recommended the Nurse-Family Partnership and the KIPP Foundation to U.S.-focused donors based on their strong case for impact, but as our analysis of “room for more funding” has sharpened, we’ve discovered that neither has a short-term need for more donations – and this in turn led us to find a specific KIPP network (KIPP Houston) that does have short-term room for more funding. (Note that we still recommend international aid organizations above U.S. organizations; this analysis is most relevant for donors who wish to focus on the U.S.).

While donating to the Nurse-Family Partnership or the KIPP Foundation does mean supporting an outstanding organization that relies on philanthropic donations to operate – and therefore is making a positive impact – we think there is a huge opportunity for a U.S.-focused donor to support organizations like KIPP Houston, for which more funds will make the difference between expansion and cutbacks.
Now the question is, how much of that nearly $15 million funding gap can we help close?

Donors who want to support KIPP Houston directly can do so using our donate page for KIPP Houston.

Update on GiveWell’s web traffic / money moved: Q2 2011

(updated on: ) | by Elie

In addition to evaluations of other charities, GiveWell publishes substantial evaluation on itself, from the quality of its research to its impact on donations. This year, we have added quarterly updates regarding two key metrics: (a) donations to top charities directly through our website (b) web traffic.

Money moved

By “money moved” we mean donations to our top charities that we can confidently identify as being made on the strength of our recommendation. This update focuses only on “money moved” that comes through GiveWell’s website; we’ll report on all donations due to GiveWell’s research at the end of the year (when the majority of large gifts occur).

While money moved through the website is only a fraction of overall money moved (and is also far greater in December than in other months), we believe this is a meaningful metric for tracking our progress/growth (as opposed to overall influence).

The charts below show dollars donated and the number of donations by month. While there’s evidence of noise — May was an unusually slow month, June an unusually strong one — overall, growth in 2011 has been strong.


We report annually money moved to each of our recommended charities, but we don’t plan on including this information in quarterly reports because (a) there are some donations that have been made but we can’t yet to attribute to an organization; (b) overall we don’t feel these figures are very meaningful or good predictors of what the year-end allocation will be.

Web traffic

The table below shows quarterly web traffic to GiveWell’s website.

Quarter Visitors Y/Y growth
Q1 2009 20,681 –
Q2 2009 14,974 –
Q3 2009 18,418 –
Q4 2009 45,956 –
Q1 2010 48,027 132%
Q2 2010 33,173 122%
Q3 2010 27,729 51%
Q4 2010 68,870 50%
Q1 2011 89,588 87%
Q2 2011 102,506 209%

The charts below show our web traffic over time, including the latest quarter.