They are not just a “site that collects and interprets data”, they collect actual money and disburse less of that money, to charities who are rated according to a highly questionable system, which was made up by people with little experience in charity and lots of experience in hedge funds.
Seems to me they are a self-inserted middle-man, whose business model is to leverage the human charitable impulse into an opportunity to scoop off a little or a lot of cream for their precious little selves. According to their financial statements in 2009 they took in ~$750K and gave out ~$110K. That’s quite some overhead.
I request more information. Your link goes to an “astroturfing scandal”, which was stupid but doesn’t obviously cast doubt on their metrics or sincerity (also, wow; remind me never to do anything wrong on the Internet where those people can see it).
As far as I can tell, GiveWell allows you to donate either to them or to their recommended charities, and makes it very clear which is which. I don’t know if they’re doing enough good to justify their operating expenses, but they don’t seem to be doing anything deliberately dishonest in that regard.
But If you can point me to other people who do the same sort of thing GiveWell does but better, and are easily accessible online, I’ll switch the links to them.
I’d classify it as an indicator of Holden Karnofsky’s sense of ethics, personally.
Charity Navigator also makes the claim of analyzing charities’ performance and I can’t speak to the relative quality of the two sites’ metrics, but Charity Navigator apparently only takes donations directly for itself. This is more transparent - $1 given to them is $1 to them, and $1 given to Charity X at Charity Navigator’s recommendation is $1 to Charity X. On the other hand, $1 to “Givewell and whatever charities Givewell recommends”, given to Givewell, will be divided up as Givewell pleases, and unless I’m missing something fundamental, it pleased itself to divide it $640K (Givewell) : $110K (donated) in 2009. I’ll admit to a complete lack of surprise at that.
Charity Navigator admits “We do not currently evaluate the quality of the programs and services a charity provides. As soon as we develop a methodology for doing so, we will. For now, however, we limit our ratings to an analysis of a charity’s financial health.”
As such, I don’t see them as really in the same business as GiveWell. They’re useful for avoiding getting scammed, but not for maximizing the efficiency of your charitable giving.
I’ve awkwardly added a link to Navigator in the article, but think I’ll continue to link GiveWell.
$1 given to Charity Navigator is $1 given to Charity Navigator; $1 given to charity X at Charity Navigator’s recommendation is $1 given to charity X.
$1 given to GiveWell is 85 cents given to GiveWell and 15 cents given to charities Y and Z. $1 given to charity X at GiveWell’s recommendation is $1 given to charity X.
This is a point in favour of GiveWell, by any measure.
Only if you assume that (a) donors are actually aware of an 85%:15% split in the charities’ disfavor; (b) approve of that. I would expect the naive assumption to be on the order of 90%:10% in charities’ favor, but maybe that’s just me.
So it’s “I’m willing to take your money for me, but if you want to give it to X, give it to X directly” vs “I’m willing to take your money for me to split between me and X, or you can give it to X”. Now on the face of it, that looks like X would get more money in the second scenario, as you point out. However there is an inherent naive assumption there that the split will be fair to X. If Donor A wanted to give $50 to Charity Navigator and $50 to charities through Charity Navigator, A has to give those amounts separately. If A wants to give $50 to Givewell and $50 to charities through Givewell, A may be tempted to just give $100 to Givewell under the assumption that Givewell will split it $50/$50. I suggest that donors who assumed that Givewell will be splitting at 50%/50% or better, have been if not deceived, at least permitted to operate under a false assumption where the one who could correct the assumption (ie, Givewell) benefits from not doing so. I think the split with potential breach of trust is more ethically dubious than the known split.
I’ll admit that it’s possible that Givewell have cleaned their act up since 2007. But they seem to have a significantly higher online profile than Charity Navigator, while also seeming to have a smaller number of charities rated and smaller amount of money donated due to their influence, which “smells funny” (or if you prefer, triggers heuristic estimates of suspiciousness) to me.
I don’t know what metric you’re using to determine whether CN or GiveWell has a significantly higher online profile, but “charitynavigator.org″ returns ten times as many hits on Google as ”givewell.org″
No doubt about it, Charity Navigator evaluates more charities, but they’re able to do so because they use a substantially less rigorous methodology. They carry out a fundamentally different function: they’re a watchdog group, aiming to avoid fraud, while GiveWell conducts research to try to find excellent charities, a much more difficult task. (Looks like Yvain makes this point above).
Because it’s younger and appeals to a smaller group of people that want to maximize their impact, GiveWell moves substantially less money than Charity Navigator (though it’s growing).
Edit: I’ve been a fan of the GiveWell project for quite some time, and have an informal agreement to join GiveWell as an employee in mid-2011. I’m a student and was commenting simply on my own behalf, without any discussion with GiveWell. After Holden commented, I emailed him to say that I had commented, and he recommended that I disclose my plan to work for them.
“we may use these funds for operating expenses or grants to charities, at our discretion” (source: http://www.givewell.org/about/donate )
This does not imply “we will treat the charities fairly” at all. It implies nothing about the numerical split.
My quick attempt to find charity navigator’s favorite charities: http://www.charitynavigator.org/index.cfm?bay=topten.detail&listid=100
There are several universities drowning in money on this list. That does not sound very efficient. Looking for an explanation, they seem to care too much about % operating expenses and so on, and not enough about real impact.
Doing the same for GiveWell (looking at US to make it more comparable): http://www.givewell.org/united-states/top-charities We have two charities. Both are evaluated based on marginal impact and measured effectiveness. The second, KIPP, is an extremely “cool” program.
Conclusion: It appears as though GiveWell recommends more efficient charities with better criteria. GiveWell also seems to behave in a manner that sounds better to Internet geeks, for example with their mistake list. This is sufficient explanation for their Internet popularity.
It is possible that Donor A may choose to donate fully to GiveWell for many reasons, including a prior assumption that it’s 50:50 or better without checking easily available facts. This reflects badly on Donor A, not GiveWell, and does not in any way make a case for calling GiveWell “ethically questionable”. The most you could possibly say is “GiveWell does not overly pander to the lowest common denominator enough” but these people are already donating their money to Make a Wish foundation or something equally silly.
I belabour this point because charities run solely on their appearance as ethical, and to the extent that your comments deprive GiveWell of possible donations on the basis of spurious claims, you’re doing a bad thing.
This is Holden Karnofsky, the co-Executive Director of GiveWell. As a frequent Less Wrong reader, I’m really glad to see the thoughtful discussion here. Thanks to Yvain for calling attention both to GiveWell and to the general topic of effective giving.
First off, much of this content overlaps with our own, so people interested in this thread might also find the following links interesting:
Giving 101 - our guide to the general key concepts of effective giving
I’m mostly posting to clarify a few things regarding the concerns that have been raised about GiveWell (by aeschenkarnos).
We regret the astroturfing that aeschenkarnos brought up. This incident is disclosed, along with other mistakes we’ve made, on our shortcomings list , which is accessible via a top-level link on our navigation bar.
Regarding the split between grants to charities and funds spent on our own operations:
Early in our existence, we relied on making grants of our own to charities. We weren’t able to point them to any benefits that would come from our recommendations (since we were new and had no track record of influencing donations), so rather than inviting them to be reviewed, we invited them to apply for grants (subject to certain conditions such as public disclosure of application materials). Grantmaking is no longer important to our process and we no longer solicit donations to be regranted, though we still occasionally receive them. That explains why the % of our funds spent on grants has fallen a lot, though it hasn’t hit zero.
At this point, we actively solicit donations to GiveWell only when dealing with institutional funders or with people who have a relationship with us. When dealing with the general public, we put the solicitation on behalf of recommended charities—rather than ourselves—front and center. Our top charities page, linked prominently from our front page and navigation bar and in other places throughout the site, links to “donate” pages for top charities ( here’s the one for our top-rated charity VillageReach ) that allow us to track donations, but otherwise take no part in the donation process (the money does not touch our bank account). These “donate” pages also are linked from charity reviews. The only way to get to the “Donate to GiveWell” page is under “About GiveWell.” If donors make a considered decision to support us rather than our top charities, we want them to be able to do so, but our site is designed to push the casual user to our top charities.
In 2009 we tracked ~$1 million in donations to our top charities as as result of our research, while our own operating (non-grant) expenses were under $300k. We expect 2010 to have a higher “donations to top charities” figure on similar operating expenses. We are still new and hope the ratio will improve substantially over time.
We have a policy of regranting unrestricted funds if our reserves go above a certain level; we don’t believe in building a massive endowment for ourselves. This is the only condition under which we regrant unrestricted funds. We don’t want donors to fear that we might blindly pile up reserves without limit (we won’t), but we don’t want to get into all the details of our “Excess reserves” policy on the Donate page, so we went with the language: “we may use these funds for operating expenses or grants to charities, at our discretion.”
Bottom line—grantmaking used to be an important part of what we do but it isn’t now; the % of our funds spent on grants is not a meaningful figure.
I agree with alexanderis that “number of charities rated” is higher for Charity Navigator primarily because its research is not as in-depth. I believe Charity Navigator would agree with this as well.
I believe that Charity Navigator has a significantly higher profile than GiveWell, overall, and know of no evidence suggesting otherwise. However, GiveWell does have a higher profile within certain communities, including Less Wrong. I attribute our higher profile on Less Wrong to specific individuals including Michael Vassar, Anna Salomon, Carl Shulman, Razib at GNXP, and multifoliaterose. I don’t believe any of these individuals have plugged GiveWell in ignorance of Charity Navigator (in fact I have probably discussed the differences specifically with each of them).
We’ve worked to find the best, most cost-effective charities (in terms of actual impact per marginal dollar) and write up all the details of our analysis. We welcome more comments and questions about our work, whether here, on our blog, or via email.
Alright. You’ve given an explanation here that seems reasonable to me, and you’ve continued to run GiveWell for significantly longer than I would have expected if you were just in it for yourselves. For what it’s worth, I’ll give you the benefit of the doubt and I wish you well in your mission.
I don’t know what financial statements you’re looking at, but if you look at the 2009 IRS form 990, it shows that they raised $374K and spent $340K. Of that, $110K was re-granted.
They did raise $768K in 2008, but they only spent $155K of it, and saved the rest. $250K of it was restricted for the their economic empowerment grant, which was distributed in early 2010.
Furthermore, I find your characterization of their business model misleading. I don’t know what Holden and Elie made working for a hedge fund, but I bet it’s a hell of a lot more than they’re making at GiveWell, so criticizing their selfishness strikes me as mistaken.
I don’t know if GiveWell publishes the data on where they get their money, but I’m fairly certain that very little of it comes from the general public in the way you’re suggesting. Their mid-2010 budget update (DOC), for instance, calculates when they would run out of money if they don’t get any donations that they aren’t already anticipating. Most of their funding, on my understanding, comes from the Hewlett Foundation and their board.
Edit: I’ve been a fan of the GiveWell project for quite some time, and have an informal agreement to join GiveWell as an employee in mid-2011. I’m a student and was commenting simply on my own behalf, without any discussion with GiveWell. After Holden commented, I emailed him to say that I had commented, and he recommended that I disclose my plan to work for them.
GiveWell is ethically questionable and taking them (and their metrics) at face value is dubious wisdom. Here’s why. http://mssv.net/wiki/index.php/Givewell
They are not just a “site that collects and interprets data”, they collect actual money and disburse less of that money, to charities who are rated according to a highly questionable system, which was made up by people with little experience in charity and lots of experience in hedge funds.
Seems to me they are a self-inserted middle-man, whose business model is to leverage the human charitable impulse into an opportunity to scoop off a little or a lot of cream for their precious little selves. According to their financial statements in 2009 they took in ~$750K and gave out ~$110K. That’s quite some overhead.
I request more information. Your link goes to an “astroturfing scandal”, which was stupid but doesn’t obviously cast doubt on their metrics or sincerity (also, wow; remind me never to do anything wrong on the Internet where those people can see it).
As far as I can tell, GiveWell allows you to donate either to them or to their recommended charities, and makes it very clear which is which. I don’t know if they’re doing enough good to justify their operating expenses, but they don’t seem to be doing anything deliberately dishonest in that regard.
But If you can point me to other people who do the same sort of thing GiveWell does but better, and are easily accessible online, I’ll switch the links to them.
I’d classify it as an indicator of Holden Karnofsky’s sense of ethics, personally.
Charity Navigator also makes the claim of analyzing charities’ performance and I can’t speak to the relative quality of the two sites’ metrics, but Charity Navigator apparently only takes donations directly for itself. This is more transparent - $1 given to them is $1 to them, and $1 given to Charity X at Charity Navigator’s recommendation is $1 to Charity X. On the other hand, $1 to “Givewell and whatever charities Givewell recommends”, given to Givewell, will be divided up as Givewell pleases, and unless I’m missing something fundamental, it pleased itself to divide it $640K (Givewell) : $110K (donated) in 2009. I’ll admit to a complete lack of surprise at that.
Charity Navigator admits “We do not currently evaluate the quality of the programs and services a charity provides. As soon as we develop a methodology for doing so, we will. For now, however, we limit our ratings to an analysis of a charity’s financial health.”
As such, I don’t see them as really in the same business as GiveWell. They’re useful for avoiding getting scammed, but not for maximizing the efficiency of your charitable giving.
I’ve awkwardly added a link to Navigator in the article, but think I’ll continue to link GiveWell.
I don’t see your point.
$1 given to Charity Navigator is $1 given to Charity Navigator; $1 given to charity X at Charity Navigator’s recommendation is $1 given to charity X.
$1 given to GiveWell is 85 cents given to GiveWell and 15 cents given to charities Y and Z. $1 given to charity X at GiveWell’s recommendation is $1 given to charity X.
This is a point in favour of GiveWell, by any measure.
Only if you assume that (a) donors are actually aware of an 85%:15% split in the charities’ disfavor; (b) approve of that. I would expect the naive assumption to be on the order of 90%:10% in charities’ favor, but maybe that’s just me.
Now, their donation pages for separate charities eg http://www.givewell.org/international/top-charities/villagereach/donate do state that the donation is direct to the charity, which is .a good thing.
So it’s “I’m willing to take your money for me, but if you want to give it to X, give it to X directly” vs “I’m willing to take your money for me to split between me and X, or you can give it to X”. Now on the face of it, that looks like X would get more money in the second scenario, as you point out. However there is an inherent naive assumption there that the split will be fair to X. If Donor A wanted to give $50 to Charity Navigator and $50 to charities through Charity Navigator, A has to give those amounts separately. If A wants to give $50 to Givewell and $50 to charities through Givewell, A may be tempted to just give $100 to Givewell under the assumption that Givewell will split it $50/$50. I suggest that donors who assumed that Givewell will be splitting at 50%/50% or better, have been if not deceived, at least permitted to operate under a false assumption where the one who could correct the assumption (ie, Givewell) benefits from not doing so. I think the split with potential breach of trust is more ethically dubious than the known split.
I’ll admit that it’s possible that Givewell have cleaned their act up since 2007. But they seem to have a significantly higher online profile than Charity Navigator, while also seeming to have a smaller number of charities rated and smaller amount of money donated due to their influence, which “smells funny” (or if you prefer, triggers heuristic estimates of suspiciousness) to me.
I don’t know what metric you’re using to determine whether CN or GiveWell has a significantly higher online profile, but “charitynavigator.org″ returns ten times as many hits on Google as ”givewell.org″
No doubt about it, Charity Navigator evaluates more charities, but they’re able to do so because they use a substantially less rigorous methodology. They carry out a fundamentally different function: they’re a watchdog group, aiming to avoid fraud, while GiveWell conducts research to try to find excellent charities, a much more difficult task. (Looks like Yvain makes this point above).
Because it’s younger and appeals to a smaller group of people that want to maximize their impact, GiveWell moves substantially less money than Charity Navigator (though it’s growing).
Edit: I’ve been a fan of the GiveWell project for quite some time, and have an informal agreement to join GiveWell as an employee in mid-2011. I’m a student and was commenting simply on my own behalf, without any discussion with GiveWell. After Holden commented, I emailed him to say that I had commented, and he recommended that I disclose my plan to work for them.
“we may use these funds for operating expenses or grants to charities, at our discretion” (source: http://www.givewell.org/about/donate ) This does not imply “we will treat the charities fairly” at all. It implies nothing about the numerical split.
My quick attempt to find charity navigator’s favorite charities: http://www.charitynavigator.org/index.cfm?bay=topten.detail&listid=100 There are several universities drowning in money on this list. That does not sound very efficient. Looking for an explanation, they seem to care too much about % operating expenses and so on, and not enough about real impact.
Doing the same for GiveWell (looking at US to make it more comparable): http://www.givewell.org/united-states/top-charities We have two charities. Both are evaluated based on marginal impact and measured effectiveness. The second, KIPP, is an extremely “cool” program.
Conclusion: It appears as though GiveWell recommends more efficient charities with better criteria. GiveWell also seems to behave in a manner that sounds better to Internet geeks, for example with their mistake list. This is sufficient explanation for their Internet popularity.
It is possible that Donor A may choose to donate fully to GiveWell for many reasons, including a prior assumption that it’s 50:50 or better without checking easily available facts. This reflects badly on Donor A, not GiveWell, and does not in any way make a case for calling GiveWell “ethically questionable”. The most you could possibly say is “GiveWell does not overly pander to the lowest common denominator enough” but these people are already donating their money to Make a Wish foundation or something equally silly.
I belabour this point because charities run solely on their appearance as ethical, and to the extent that your comments deprive GiveWell of possible donations on the basis of spurious claims, you’re doing a bad thing.
This is Holden Karnofsky, the co-Executive Director of GiveWell. As a frequent Less Wrong reader, I’m really glad to see the thoughtful discussion here. Thanks to Yvain for calling attention both to GiveWell and to the general topic of effective giving.
First off, much of this content overlaps with our own, so people interested in this thread might also find the following links interesting:
Giving 101 - our guide to the general key concepts of effective giving
March 2010 blog post on “selfish giving” (including “purchasing warm fuzzies”) vs. impact-focused giving
I’m mostly posting to clarify a few things regarding the concerns that have been raised about GiveWell (by aeschenkarnos).
We regret the astroturfing that aeschenkarnos brought up. This incident is disclosed, along with other mistakes we’ve made, on our shortcomings list , which is accessible via a top-level link on our navigation bar.
Regarding the split between grants to charities and funds spent on our own operations:
Early in our existence, we relied on making grants of our own to charities. We weren’t able to point them to any benefits that would come from our recommendations (since we were new and had no track record of influencing donations), so rather than inviting them to be reviewed, we invited them to apply for grants (subject to certain conditions such as public disclosure of application materials). Grantmaking is no longer important to our process and we no longer solicit donations to be regranted, though we still occasionally receive them. That explains why the % of our funds spent on grants has fallen a lot, though it hasn’t hit zero.
At this point, we actively solicit donations to GiveWell only when dealing with institutional funders or with people who have a relationship with us. When dealing with the general public, we put the solicitation on behalf of recommended charities—rather than ourselves—front and center. Our top charities page, linked prominently from our front page and navigation bar and in other places throughout the site, links to “donate” pages for top charities ( here’s the one for our top-rated charity VillageReach ) that allow us to track donations, but otherwise take no part in the donation process (the money does not touch our bank account). These “donate” pages also are linked from charity reviews. The only way to get to the “Donate to GiveWell” page is under “About GiveWell.” If donors make a considered decision to support us rather than our top charities, we want them to be able to do so, but our site is designed to push the casual user to our top charities.
In 2009 we tracked ~$1 million in donations to our top charities as as result of our research, while our own operating (non-grant) expenses were under $300k. We expect 2010 to have a higher “donations to top charities” figure on similar operating expenses. We are still new and hope the ratio will improve substantially over time.
We have a policy of regranting unrestricted funds if our reserves go above a certain level; we don’t believe in building a massive endowment for ourselves. This is the only condition under which we regrant unrestricted funds. We don’t want donors to fear that we might blindly pile up reserves without limit (we won’t), but we don’t want to get into all the details of our “Excess reserves” policy on the Donate page, so we went with the language: “we may use these funds for operating expenses or grants to charities, at our discretion.”
Bottom line—grantmaking used to be an important part of what we do but it isn’t now; the % of our funds spent on grants is not a meaningful figure.
Regarding Charity Navigator:
I believe Yvain is correct to say that Charity Navigator does not evaluate effectiveness (and admits this) and that GiveWell does. See also this recent New York Times article on planned changes at Charity Navigator and Charity Navigator’s disclosure of the full details of its current methodology.
I agree with alexanderis that “number of charities rated” is higher for Charity Navigator primarily because its research is not as in-depth. I believe Charity Navigator would agree with this as well.
I believe that Charity Navigator has a significantly higher profile than GiveWell, overall, and know of no evidence suggesting otherwise. However, GiveWell does have a higher profile within certain communities, including Less Wrong. I attribute our higher profile on Less Wrong to specific individuals including Michael Vassar, Anna Salomon, Carl Shulman, Razib at GNXP, and multifoliaterose. I don’t believe any of these individuals have plugged GiveWell in ignorance of Charity Navigator (in fact I have probably discussed the differences specifically with each of them).
We’ve worked to find the best, most cost-effective charities (in terms of actual impact per marginal dollar) and write up all the details of our analysis. We welcome more comments and questions about our work, whether here, on our blog, or via email.
Alright. You’ve given an explanation here that seems reasonable to me, and you’ve continued to run GiveWell for significantly longer than I would have expected if you were just in it for yourselves. For what it’s worth, I’ll give you the benefit of the doubt and I wish you well in your mission.
I don’t know what financial statements you’re looking at, but if you look at the 2009 IRS form 990, it shows that they raised $374K and spent $340K. Of that, $110K was re-granted.
They did raise $768K in 2008, but they only spent $155K of it, and saved the rest. $250K of it was restricted for the their economic empowerment grant, which was distributed in early 2010.
Furthermore, I find your characterization of their business model misleading. I don’t know what Holden and Elie made working for a hedge fund, but I bet it’s a hell of a lot more than they’re making at GiveWell, so criticizing their selfishness strikes me as mistaken.
I don’t know if GiveWell publishes the data on where they get their money, but I’m fairly certain that very little of it comes from the general public in the way you’re suggesting. Their mid-2010 budget update (DOC), for instance, calculates when they would run out of money if they don’t get any donations that they aren’t already anticipating. Most of their funding, on my understanding, comes from the Hewlett Foundation and their board.
Edit: I’ve been a fan of the GiveWell project for quite some time, and have an informal agreement to join GiveWell as an employee in mid-2011. I’m a student and was commenting simply on my own behalf, without any discussion with GiveWell. After Holden commented, I emailed him to say that I had commented, and he recommended that I disclose my plan to work for them.