Bargain Hunting for Charities

Gosh that sounds so stingy. When we are charitable, we don’t want to be cheap. This is our moment of giving, of generosity, not bah-humbugness. Alas, that is exactly what we should be. If we go to a restaurant for chicken wings, what would you think of the following prices:

4 chicken wings:            $8
6 chicken wings:            $8
8 chicken wings:            $8

Which would you opt for (assuming more is always better)? Naturally, it shouldn’t require much thought. So why not apply this to charity?

This is what Givewell does. (And I’m pleased to say, you can see the imprint of lots of research from Innovations for Poverty Action on their assessments and recommendations). You may remember I blogged about Givewell over the summer, and how there is no correlation between their assessment of organizational effectiveness and the horrid measure often used by those in search of a good charity, “general administrative and fundraising expenditures as a proportion of program expenses.”

When I give public talks on charity, I talk a lot about how to test what ideas work and why, and how randomized trials help us learn what we need to learn. I often get the obvious question: “Ok, so [blah] works, where do I send $50 to help some organization doing that?” That is a much harder question to answer. Alas Givewell does the hard work of combining the evidence from research and combining this with a scrubbing of the organization itself: how well they adhere to what the research says to do, how well they can absorb more funding, how well they monitor their activities to make sure money is spent well, etc. 

Givewell has just released its list of recommended charities, just in time for the holiday giving season. 

Their top two are:

Against Malaria Foundation: Fights malaria using insecticide-treated bed nets.

Schistosomiasis Control Initiative: Treats children for intestinal worms (helps improve school attendance!).

And their next six (in alphabetical order) are:

GiveDirectly: Cash grants to poor households in Kenya (trying to tackle the tough question of who knows best? Perhaps just giving cash away is best?)

Innovations for Poverty Action (disclosure: I am President of IPA) Research on how to fight poverty best, and to scale-up ideas proven most effective.

Nyaya Health: Healthcare in rural Nepal.

Pratham: Primary education in India.

Small Enterprise Foundation: Microfinance in South Africa.

 In the United States, Givewell recommends  KIPP Houston, an outstanding charter school facing budget cuts.

It is also pleasing to see that, through independent decision-making, we at IPA in our Proven Impact Initiative came up with a strikingly similar set of charities, as our Proven Impact Fund is going to support three of the seven above named organizations (not counting IPA, of course).

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  1. Jennifer says:

    I am delighted and suprised to see that Givewell are one of the first to comprehensively assess the charities we give to. However in the rise of popularity of sites such as Givewell how quickly will they capture the charity’s efficiency in absorbing the spike in donations?

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  2. Kat says:

    I realize it’s unrealistic to expect them to do an in-depth review of every charity, but I don’t really feel they do enough investigating to write off the charities they don’t recommend. Still seems quite worthwhile, but I would take their shallowly-investigated charity reviews with a grain of salt.

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    • Jared says:

      I’m confused as to whether you would have me take the reviews with a grain of salt or view them as worthwhile. I’ve already signed up for recurring contributions to one of the charities based on this article, so my question is rhetorical in nature.

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      • Kat says:

        I’m saying I think the reviews they have done are worthwhile. But their shallow reviews (if you look at their methods, they do a overview review first) may disqualify something for further review. I don’t think that something not being investigated is a reason to not to donate to it.

        Basically, I think the charities they recommend are indeed great, but not the only great charities in existence.

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  3. Joe010106 says:

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  4. William Douglas says:

    Statistical comparatives like this are not particularly helpful to the charity donor.
    Following Givewell’s recommendations would, presumably, result in no donations going into cancer research, which has so far consumed squillions of dollars without yet finding a cure – at a cost per life saved of ???, whereas we could be saving children from malaia at less than £2000 per life saved.

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  5. anon says:

    All worthy causes, I’m sure. I’m unemployed, have very little spare money to give, but I do make an effort on a small scale to give to the Salvation Army (the ubiquitous red kettle) or Rescue Mission (donations of clothing, household goods)… My rolled up change every month goes to the SPCA or Humane Society in my town. I’m sorry for the developing world, someday I will buy a poor family there a goat or something, but right now I’m more worried over local animals who need food and shelter… And why in the world would KIPP Houston would get my $10 a month??? When every September there is a school supply drive to get backpacks and, well, school supplies, to poor students right here?

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    • Nik says:

      It is simply the case that it is substantially more expensive to make improvements to the lives of the poor in the developed world. If your $10 could buy either a year’s worth of school supplies for a poor student in your city, or give 10 years of healthy life (and therefore full school attendance) to 5 children in a developing country, you should consider how moral making the former choice is.

      Obviously considerations of proximity, the desire to give to people close to and like you, may come more into play when the outcomes are more comparable, but there is really no comparing the achievable outcomes as things stand.

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      • anonono says:

        Ah. True, dat. I see it intellectually, but people look at you oddly when you say, “I can’t give to the food bank here this year, I’m sending my charity dollars to other countries, to those who could use it more”. When it’s people you actually know that need food…

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  6. Nik says:

    The methodology by which they arrived at the top two is very rigorous and widely supported; I’d recommend the information resources on Giving What We Can (http://www.givingwhatwecan.org/resources/), an organisation founded by University of Oxford ethicists which does not take donations but mobilises donors to give a sizeable amount to the most cost-efficient charities.

    However, GiveWell have been questioned from a number of sources about their high rankings of microfinance charities, when there is no empirical evidence to support the idea that these are cost-effective. Obviously microfinance is quite a new concept, in terms of gaining popularity at least, so this kind of literature may well come to vindicate these choices, but certainly has not yet.

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