Guardian article on charity evaluators GiveWell and Giving what we can

Guardian Voluntary Sector Network has published an article by me on charity evaluators (below), organisations that examine charities on their effectiveness. I spoke to GiveWell in the US and Giving what we can in the UK, an organisation best-known for asking people to donate significant amounts of their income. Both tend to recommend small healthcare charities serving the developing world, because they offer the best value (in terms of lives saved or improved) for money.

Charity evaluators are fascinating organisations, applying hard-headed analysis to good causes. Their recommendations are hard to get – it can take up to 100 hours to go through a GiveWell evaluation, and Schistosomiasis Control Initiative took on someone partly to deal with evaluators – but they can unleash a tidal wave of funds, usually to very small organisations (as these tend to do just one thing well, making them straightforward to assess). Against Malaria Foundation received $4m in four days as a result of a GiveWell recommendation, during the American ‘giving season’. A nice problem to have, but it may only happen once – GiveWell says charities should see such bursts of income as windfalls.

There is a broader point as well, that perhaps charities should be much more open about their results. Certainly that is what Rob Mather of AMF argues:

“The vast number of charities still publish anecdotal accounts,” says Mather. “That for me doesn’t cut it, because it’s storytelling.” He argues that, at a minimum, charities should publish all the donations they receive, anonymously if the donor prefers, then look at allowing them to allocate donations to specific programmes. “By doing some degree of project-based fundraising, you are engaging your donor base,” he says. “I believe the greatest single drag on people giving is cynicism.”

This article titled “How charity evaluators are changing the donations landscape” was written by SA Mathieson, for theguardian.com on Tuesday 11th June 2013 06.00 UTC

Charities often ask for donations by appealing to people’s hearts, not their heads. However, many large-scale donors, such as foundations and government departments, demand evidence that their money will be used well.

A new type of organisation, the charity evaluator, has started to assess voluntary sector organisations with similarly hard-headed techniques, using data and scientific research to advise individual givers where to donate. They typically recommend a handful of organisations each year rather than trying to rate lots – and those chosen can receive windfalls worth millions.

But there are drawbacks. Such recommendations, often of very small organisations, can take a lot of staff time to win, and are no guarantee of regular income. Furthermore, such charity evaluators currently focus on single-purpose organisations that work in the developing world, mostly in healthcare.

“Realistically for most charities, there is no chance of getting a GiveWell recommendation,” says Alexander Berger, senior research analyst for the San Francisco-based charity evaluator, founded in 2007 by two hedge-fund staffers. Robert Wiblin, director of research for Oxford-based evaluator Giving What We Can, says it tends to choose effective healthcare interventions first, before looking for organisations that deliver them well.

Giving What We Can was founded in 2009 by Oxford academic and ethical philosopher Toby Ord, who pledged to donate £1m of his estimated £1.5m lifetime income to charities. It has more than 300 members who have pledged to donate at least 10% of their income, worth an estimated 0m (£77m) over the coming decades, and they want this money to do the greatest possible good. GiveWell, with a similar results-based approach, reckons it directed .57m (£6.2m) in donations in 2012, nearly double the previous year.

Both evaluators currently recommend just three organisations – and the two that appear on both lists, Against Malaria Foundation (AMF) and Schistosomiasis Control Initiative (SCI), are both based in Britain, and tightly focused on specific inexpensive interventions that are proven to save lives. AMF has funded four million long-lasting insecticidal nets costing £2.50 each, while SCI has dispensed 100m treatments for schistosomiasis – an often-fatal family of parasitic worms also known as bilharzia – that cost less than 50p a year. Both are small and fund many or all of their overheads from alternative sources.

Rob Mather, AMF’s chief executive, says it received m in just four days at the end of 2012 as a result of receiving GiveWell’s recommendation in November: many Americans make tax-deductible charitable donations in a “giving season” at the end of December, which is the end of the tax year. “We don’t have any marketing budget, nor would we,” says Mather, describing the recommendations as “fabulous marketing – the best source of marketing is when other people talk about you”. Overall, he says AMF has quadrupled in revenue, to more than m for the year ending this June, as a result of the recommendations.

SCI, which similarly has no marketing or advertising budget, has taken on a new part-time member of staff (paid for through a special donation rather than general funds) to help deal with donors and evaluators. Professor Alan Fenwick, SCI’s director, previously did this work himself. He is also professor of tropical parasitology at Imperial College London, and SCI is effectively a ring-fenced fund within that university’s charities in the UK and US; it was founded with a £20m donation from the Bill and Melinda Gates Foundation and has more recently received millions from the Department for International Development (DfID) under a five year contract.

“It is a significant time commitment,” Fenwick says of the evaluations. “But it’s been good for us.” As well as extra money, working with the evaluators has led SCI to publish more financial data publicly, rather than responding separately to each donor. It has also been able to start dispensing medicines in new areas including Mauritania, Senegal and Zimbabwe – funding from DfID is tied to specific countries. “It allows us to do so much more and respond to smaller countries,” Fenwick adds.

The fact that donations pay for work that would not otherwise take place is rated highly by both charity evaluators. Robert Wiblin says that this is one reason Giving What We Can has not recommended larger, multi-programme charities –along with the fact that most do not provide detailed information on specific projects allowing assessment. But he adds that some are shifting in this direction, including Oxfam. Wiblin adds that Giving What We Can requires about 10 to 20 hours of a successful charity’s time, although it uses the detailed reports produced by GiveWell as part of its process.

Alexander Berger says it can take more than 100 hours to complete GiveWell’s application process, although much less for those rejected at an early stage. While it does not do independent checks, “the organisations would have to be literally lying to us” to defraud it, he adds.

GiveWell relies on charities applying to it, and provides a list of interventions it is interested in supporting – all but one involve developing world healthcare, although the other charity it recommended in November 2012, GiveDirectly, gives money to the very poor using the MPesa mobile phone payment service. Evaluators employ academic research and data on what works, which is plentiful for healthcare and economics, the latter providing support for GiveDirectly’s approach.

Berger says it is open to charities working in other fields in the developing world, while Wiblin sees possibilities in education and political empowerment: “It’s just more difficult to get an assessment of the impact those organisations are having,” he adds.

Evaluators’ recommendations may recur – but there is no guarantee. Alexander Berger says that GiveWell advises its recommended charities to treat donations as “a windfall lump sum”, as it considers its recommendations afresh each year. Charity evaluators appear to be growing quickly in terms of the funds they direct, although they make up only a small amount of total personal donations. And they could have a wider, beneficial, impact on charities, according to AMF’s Rob Mather. AMF links each donation to a project online, providing news, results and photos, with the aim of showing that each donation is well spent.

“The vast number of charities still publish anecdotal accounts,” says Mather. “That for me doesn’t cut it, because it’s storytelling.” He argues that, at a minimum, charities should publish all the donations they receive, anonymously if the donor prefers, then look at allowing them to allocate donations to specific programmes. “By doing some degree of project-based fundraising, you are engaging your donor base,” he says. “I believe the greatest single drag on people giving is cynicism.”

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