GiveWell is (IMO) your best resource for evidence-based philanthropy. It started when a few hedge fund managers had a sizeable sum they wanted to donate to a worthy cause. Being in the finance industry they’re used to doing due diligence and seeking evidence that their investment will get the results they are hoping for. What they found was that almost no charities are able/willing to provide this level of evidence (instead relying on things like testimonials).
Realising the problem is a deep one and seeing a niche in the market they started GiveWell — an organisation dedicated to evaluating individual charities as well as causes and issues in the world of aid. Their recommended charities (2% of those they evaluated so far) give good evidence your donation will make a marginal difference. Their blog about the issues is essential in an area where there’s so little skepticism and so much marketing, misinformation, and misaligned interests.
Snippets from GiveWell’s report on VillageReach, their top rated charity, which shows the level of evidence they are aiming for:
VillageReach has provided estimates of the “incremental children vaccinated” projected for its six-year project.[78] These assume that “Total children forecasted to be vaccinated with new system is 80% in the first year, 85% in the second year, and 90% in the third year. The exception is Cabo Delgado where it is 90% for all 3 years.”[79] These assumptions do not strike us as overaggressive, seeing as the pilot project achieved 95% coverage in Cabo Delgado (see above). Also note that these estimates count only incremental children vaccinated while VillageReach is active in a given area, and thus could substantially underestimate impact if VillageReach’s work has lasting effects (as intended).
We have calculated the “cost per additional child vaccinated” based both on the Mozambique-only costs and on VillageReach’s overall costs as an organization, excluding contract engagements (i.e., all activities that unrestricted funds support).
The aggregate cost-per-vaccination over the duration of the project is $31.88 looking at only Mozambique costs,[80] and $58.28 when including other costs.[81] If, as discussed above, $15 per additional immunized child corresponds to $200 per life saved, these two estimates would imply around $400 or $800 per life saved, respectively. Note that the latter estimate assumes that VillageReach activities such as IT development will have zero impact aside from its contribution to VillageReach’s main logistics program in Mozambique.
GiveWell on some of the hype around microfinance:
- The large U.S. charities are rarely clear even about what their value-added is. To the extent that I’ve been able to see their due diligence on partners (most of which is unfortunately confidential), it seems focused on financial performance, with much weaker examination of social impact-related questions.
- Something as simple as the “repayment rate� turns out to be reported, by standard practice, in what we feel is a highly misleading way. We’ve been shocked at how hard it is even to get what we consider the “real repayment rate� out of a microfinance charity.
- We’ve also been surprised by how often people drop out of microlending programs, generally for negative reasons.
- All in all, the picture we have is of a sector that tells stories about helping people but largely measures and rewards financial performance. As a result, microfinance institutions seem to have strong incentives to maximize their scale and their profits, even if doing so isn’t good for the borrowers.
GiveWell on room for more funding:
If a charity’s core program is outstanding, is this enough reason to donate to it? We say no. There is still the question: how will the charity’s activities be influenced by additional donations?
There are several reasons that a charity may not use additional funds the same way it used past funds, or the same way as the donor hopes.
A successful program can rely on many factors besides money, such as skilled labor, political support, and appropriate target populations. Thus, more money can’t necessarily be used to do more of it.
- For example, we have argued that the surgery charity Smile Train has a shortage of skilled surgeons, not a shortage of funds, for its core program. More examples below.
- The programs donors want to fund don’t necessarily match the programs charities want to carry out. Thus, a charity may focus on one program in solicitations, when its intent is to use donations for another program or simply add them to reserves. We have seen charity representatives make explicit statements to this effect.[1] (We almost never come across a charity whose representatives state that it has enough money and doesn’t seek more donations).