GiveWell

I think that for many of us, charitable giving is often an emotional decision:   we look at the “hard luck” stories in the handouts or are impressed by the presentations.   Other people make decisions about which charities to support on the basis of loyalty, personal connections, or faith.    I read that in the US, $427.71 billion was given to charities in 2018 but of course not all of this is from the general public (a lot came from the big foundations that they have there).

But some people are more analytical, and so there are “metrics” available such in the list compiled by Forbes.   There are also sites like GuideStar and Charity Navigator.  Into this mix comes GiveWell.   But who or what are they?

They’re US based (of course) and  describe themselves as “a nonprofit dedicated to finding outstanding giving opportunities and publishing the full details of our analysis to help donors decide where to give”.

Wikipedia gives them a good writeup, and notes that their point of difference is that they evaluate charities on the cost-effectiveness of the organisations that they evaluate, rather than traditional metrics such as the percentage of the organisation’s budget that is spent on overheads.    The latter assumes that a charity’s overheads ought to be kept low although this is regarded by many as very arbitrary (in that it fails to allow for the funding of effective systems and training).  Moreover, I suspect that “effectiveness” also involves a degree of judgment about overheads.

But GiveWell goes further.  We all know about intermediaries in the travel industry.  Instead of booking directly with a property or airline, you use an intermediary who gets a slice of the takings.  GiveWell not only advises Americans on what charity they should support, but donors have the option to send their  donations to them, and allow GiveWell to pass them on,  through their Maximum Impact Fund.

In fairness, they state that they don’t get a kickback or cut from the charitable donations but are separately supported.   However, I notice that they retain funds that are donated through them for a few months, so perhaps they get benefit from having the use of the funds for this time.

Philanthropy is big business in the United States (there was $1.7 trillion in the endowments of nonprofit organisations in America as of the end of 2017), so I suppose organisations such as GiveWell will exist (on the “follow the money” principle).  Just the same, they don’t sit comfortably with my view of the world.