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Rob Wiblin

Why give now

​A common question that comes up in the effective giving community is whether we should give to the best charities we can find now, or invest our money in order to give away a larger sum to the best charity we can find in the future.

 of this topic is available on an old blog post of mine, and a fuller treatment of the considerations at 

While this is a tricky question to answer, our current recommendation for donors focussed on global poverty is to give now.

Improving health today has significant flow-on effects to the future, by ensuring people and their children are healthier, and better able to learn, work and make their countries prosperous. The earlier in time these health improvements are achieved, the more people benefit from these flow-on effects.

The short-term 'social rate of return' from containing contagious diseases today 

 between 15-30%. We are skeptical about how these figures are produced, and intend to scrutinise them properly in future. Nonetheless, the short-term return probaby exceeds expected returns on the stock market, which have in the past fallen between 4-8%.

On balance, we don't expect unfunded poverty-reducing projects to be more effective than our current recommendations in the near future for three main reasons: 

In general, the world is getting richer, and poverty declining.

The worst global health problems, which we believe provide the most promising giving opportunities, are being resolved even more quickly than poverty is declining.

While better information about charity effectiveness is being produced, there are also a growing number of donors drawn to take up these opportunities.

While we are not investment advisors, the expected returns on investment are 

 in coming years. We are currently at long-term lows in interest rates, which are correlated with low returns on both bonds and equities. Past returns in markets like the US tend to overstate the true expected returns in future due to survivorship bias among stock indices. Many stock markets in the 20th Century (for instance, Russia or Argentina) returned nothing to investors! All things considered, we anticipate a modest return of under 4%, which makes it easier for the 'return on investment' to be trumped by other considerations. 

It is possible that your will-power for serious giving will vary over years or decades. Leaving money in your own account, even for enthusisatic donors, means that you risk spending it on yourself during a moment of temptation. Forming the habit of giving each year means you are more likely to stick to your giving goals.

We find these reasons quite compelling. ​However, we understand that reasonable people may disagree with this conclusion. For example, they may be more optimistic about the prospects for better giving opportunities to be identified using emerging strategies, like 

, or novel technologies such as vaccines for important diseases. 

 on Rational Altruist provides a well-thought through alternative view. For this reason, we are in the process of setting up a Donor Advised Fund (DAF) that would help combine the best of both approaches. Giving to our DAF means that:

You gain the tax benefits of donating this financial year.

It will be invested and earn some interest until it is donated.

It is easy to donate money to using a regular direct debit.

The money is out of your hands, so you can be sure it will be given to an effective charity (DAF's are legally required to dispurse funds to a registered charity).

You no longer have to think about what to do with it, and can delegate the decision to Giving What We Can's trustees.

However, you can still influence who it is given to, if you would like.

It is clear that you're keeping to the pledge, whereas if you are saving your money, it might appear that you have dropped out.

Unfortunately, to begin with, it will only be available to UK members but we hope to expand to other jurisdictions in the future. This blog will feature more information about how to give to our DAF in the near future, and 

 will track any changes in our advice on when to give.

I look forward to hearing your view on the relative merits of giving now, versus investing and giving in the future!

Sally Murray

Is it Good to Campaign for Increased Government Aid to Cost-Effective Interventions?

Wouldn't it be very cost-effective to fund a charity that effectively campaigns for more or better aid? Let's imagine there exists a charity, Advocaid, whose sole purpose is to campaign for developed country governments to increase their funding of a highly cost-effective aid intervention- 

's distribution of insecticide treated bed-nets (ITNs). And let's say Advocaid are pretty good at what they do: for every marginal dollar they receive in donations, they generate $10 of developed-country government aid for AMF's programs. Brilliant! If Advocaid exists already, it should be our number one recommended charity. It it doesn't exist, we should create it! Right?

Unfortunately, there remain several reasons to doubt that Advocaid would be more cost-effective than AMF, and even reasons to think it could do harm. In this and my next blog post, I will explain one of the most important and counter-intuitive reasons: the counter-factual of health aid spending on a particular project.

Remember Advocaid works by raising government aid for ITN distribution. We have to ask, "Where do this government aid come from?" and "How would the money have been spent had Advocaid not been successful in moving it to ITNs?"

The money can either come from somewhere within the government's budget for health aid, other areas of the aid budget (beyond health), the government's non-aid budget, or tax-payers. We tried to work out which is the case. It turns out, it's very difficult to tell.

On the one hand, it seems likely that governments' aid budgets are sensitive to perceptions of aid effectiveness, and that a campaign that successfully shows the merits of ITN-delivery would affect such perceptions- ITNs becoming something of a 'poster child' for the potential of international development in general, for example (we should like to ask from RESULTS and the Global Network for NTDs, both of whom work in aid advocacy, whether they have any evidence for such dynamics). In this case, the money Advocaid raised would come from non-aid aspects of the national budget, or from tax-payers.

On the other hand, in the short run at least, a country's aid budget is usually set 'in advance' by the government, and a second body or process then decides how that set amount of money will be distributed amongst competing projects. At least in the short run, then, increasing funding for ITNs should result in less funding for other, competing, aid interventions.

Perhaps you can see where this is going. If money raised for ITNs is effectively shifted from other aid projects, then the result of Advocaid's work is not just that ITNs gets more, but also that other aid projects gets less (or, their funding expands by less than it would have done). To estimate the good done by Advocaid, we need to subtract the harm done from this latter process from the good done by the former.

In email conversations with us, USAID representatives have claimed that, in the US at least, the projects that would receive less funding as a result of successful advocacy for a health aid intervention (including ITNs, but also 

 and so on) would tend to be other health interventions. This is because the budgets of broad sectors like 'health' are fixed in advance of the advocacy; the advocacy only moves money within them.

Not only do we not know how well this model generalises across countries, we also still have a 'long-run / short-run' problem: we don't know whether, despite short-term costs to competing aid projects, in the long run, successful advocacy for ITNs would lead to improved perceptions of the cost-effectiveness of health aid (or aid), and hence increased budgetary support for health aid (or aid) as a whole.

We are going to ignore this long-run uncertainty for now and explore short-term dynamics, mainly because we can with a little more ease.

Our initial research suggests that health aid programs tend to be highly cost-effective, with a mean and median cost-effectiveness similar to that of ITN-distribution. If this is indeed the case, a charity like Advocaid simply moves money from one highly cost-effective intervention to another, and may thus do little good, or even do harm. Thus, our initial enthusiasm would sadly be unwarrented, and in general, we should be wary of recommending charities that work in the field of aid advocacy.

, I will explain how we estimated the cost-effectiveness of health aid. Since our estimation is extremely tentative, the above blog post certainly should not be considered the final word on the cost-effectiveness of aid advocacy.

Was Tutankhamun a billion times more important than you?

 on how we ought to deal with future gains to health when doing cost-benefit analysis for 

, and in our other projects. Typically, cost benefit analyses discount future costs and gains at somewhere between 3-7% every year into the future. We propose that while this makes sense for financial assets, it is quite inappropriate for dealing with health improvements and other similar welfare gains. The main reasons put forward for using a discount rate to lower the importance of the future relative to the present are:

Opportunity costs are a sound reason to discount the value of an organisation's financial returns, because they can always be invested and turned into a larger amount in the future. However, this does not apply to health, quality of life, or financial gains which go to other parties. A person who is healthier earlier in time might be able to use that health to earn extra money sooner, and invest it for longer. [1] However, any such return will go to that individual, rather than the charity or government deciding how to spend their money to deliver the greatest benefit. This failure of program recipients to reinvest returns in valuable activities rather than short-term consumption spending is noted in Poor Economics (2012) as a prime reason why programs haven't lifted people out of poverty at the expected rates. To account for this, such benefits should be treated quite differently. Other benefits to quality of life may not even be possible to reinvest in this way in principle.

Another reason to discount is that far future benefits are more speculative, and changes to the world in the meantime can disrupt your project or make it irrelevant. For example, a vaccine development project that hopes to deliver a vaccine in a few decades faces a higher risk of being defunded or the disease in question disappearing, than does a similar project that expects to deliver a vaccine in a matter of years. This is a good reason to discount future benefits and costs, but the appropriate rate will vary dramatically depending on what you are looking at, and will not necessarily be the same every year into the future.

A third reason offered is that in practice we must avoid infinities, or at least very large numbers, in our results. The details are in the full version, but the bottom line is that a) a proper model will not usually produce infinities or very large numbers b) where one does, this is actually informative, and finally c) a discount rate does not necessarily prevent enormous numbers anyway, for instance if population growth exceeds your discount rate.

The final reason offered is that we should apply a discount rate to account for 'time preference': things in the future are inherently less important. This is the hardest point to debate because people do not agree on the appropriate method for settling disputes on such moral questions. However, Toby and I strongly disagree with discounting due to pure time preference. Some of the reasons we offer to doubt the wisdom of this approach are:

Time preference appears similar to arbitrary prejudices regarding whose interests count that are generally rejected today, such as racism and sexism.

The discount rate people apply to their self-regarding preferences is extremely sensitive to the setup of the experiment, and can mostly be explained without appealing to time preference.

In any case, the discount rates people apply when trading off their own 'self-regarding' pleasures across time are probably not relevant when comparing benefits across different people, for which we should adopt a more impartial position.

Surveys show people have much lower discount rates when asked explicitly about their other-regarding preferences.

If applied consistently to the past, a modest rate of time preference of just 1% per annum would imply that Tutankhamen was more important than all 7 billion humans alive today. This seems both immoral and absurd.

Most of those who developed discounting for cost benefit analysis strongly opposed doing so to account for 'time preference', which Roy Harrod described as "a polite expression for rapacity and the conquest of reason by passion."

While you may not find all of these points persuasive, I hope that they collectively will give you reason to doubt that pure time preference is appropriate, especially at the high rate at which it is often applied today. Our approach would be to apply a discount rate to financial assets in the normal way, model the opportunity costs and uncertainty that applies to non-financial returns explicitly, and not apply any rate of time preference. As always, I look forward to revising our position in response to your constructive feedback.

[1] Health earlier in life does allows you to 'invest' in your future health through exercise and so on, but this is a small effect, and only applies within the same life, not between lives.

Stephanie Crampin

Living Below the Line

Between 29th April and 3rd May 2013, I and at least 8 other 

 will take part in live below the line to raise money for 

. We follow the Giving What We Can team from last year, who raised over half of the £20,363 generated for SCI by the campaign. We have our work cut out for us, but have already made it to second place on the leaderboad, so are stepping up to the challenge!

First and foremost, why are we supporting SCI (and for the second year in a row!)? SCI treats Neglected Tropical Diseases. These are extremely prevalent in the developing world, affecting over a billion people. Most are caused by parasitic worms that live inside the body. They cause symptoms ranging from general malaise through to kidney damage, intestinal damage, disfigurement of the limbs, blindness, and death. However, they are comparatively easy and very cheap to treat, using the 'rapid impact package' that SCI administers. The treatment only needs to be administered once per year per person, and it only costs 50p to do this. For more information on why SCI is an extremely cost-effective charity, 

The Live Below the Line challenge involves simply living on £1 a day for 5 days. £1 a day is the UK equivalent of the International Extreme Poverty Line of 

 (purchasing power parity adjusted), determined in 2005, which is essentially the average poverty line found in the poorest 10-20 countries. The reason is clear enough; to experience firsthand a bit about how the world's poorest live.

I say how they live- I will certainly not starve, and the change in diet almost certainly won't affect my exercise or work schedule for the week. I won't let it. The challenge lies in the planning it takes to get in enough calories to stay compos mentis, and frankly, how boring and restrictive it will be. There is nothing sexy or interesting about living off Tesco value rice and canned spaghetti for any length of time, and doing this will certainly give an insight into just how much choice I normally enjoy.

I'll admit that there is something about the fact that these will be the worst of my problems that sits a little uncomfortably with me. My food budget will indeed be restricted to that of people living below the poverty line, but I will still have my safe and furnished accommodation, an abundance of clothes, and access to any medical care I might need. Not to mention a wealth of ideas and support on how to make the most of the week's allowance, including cheap, mass produced food in supermarkets, and menu plans from Global Poverty Project. The title of the campaign itself is '"Live" below the line', which is somehow not right, as for me, to live is to experience something with such depth and intensity that you know firsthand what a certain lifestyle is like. I will not get that from the week I have coming up.

These thoughts do give me a sense of perspective though, on just how bad things could be, and how great SCI are. SCI help people for whom the poverty line is not just something they can google to work out how it is calculated. These people cope with the restrictions it forces on them every day, and get sick as a result of diseases that could be treated for a year for just 50p. We are doing it for them, so please support the Giving What We Can team as part of this year's campaign. Your money will be helping people who really live below the line every day.

Should we fund nutrient fortification for kids in the developing world?

Today we are putting up the first in a series of pieces on the charity Project Healthy Children. The key work on this has been done by Sally Murray, Nikki Naylor and Ellie McDanielle at the London School of Economics. The next piece we will release next week will be on the merits of nutrient fortification in general. We are currently working with the charity to collect and write up further information. A summary of the

At Giving What We Can, we evaluate the cost effectiveness of charities fighting poverty in the developing world. Currently, our health team are investigating the charity Project Healthy Children (PHC), a not-for-profit organisation that works to help governments in low income countries to implement food fortification programmes. We were interested to see whether PHC would be a charity we could recommend, as they had come to our attention for operating a very low cost strategy for effectively increasing micronutrient consumption in the developing world.



This report is a summary of our findings at this stage. For those who don't have time to read the whole thing, the bottom lines are:

   

Project Healthy Children aims to ensure that foods in the developing world are fortified with necessary micronutrients through partnerships with government and industry. They want fortification to happen earlier, and be more comprehensive than otherwise.

They appear to have a sensible model for pursuing this goal. First they research what nutrients are needed and foods consumed, then they design and implement regulations that require all staple foods to be fortified. The cost of this fortification is borne by industry or consumers and is very small.

They consult for free with affected industry to ensure they do properly fortify food. They also promote monitoring and evaluation to ensure that foods being bought by people are indeed fortified as intended.

The cost of providing all of this advice to a country is in the order of $300,000-650,000, which could lead to an annual cost per person in the country of under one cent.

However, we currently have various doubts. We worry that recipient countries may have pursued fortification even in the absence of PHC. We wonder why they have not already managed to raise the relatively small amounts of money they require from other donors. We would like their monitoring to include tests for deficiencies in the population both before and after the fortification process goes ahead. We will push ahead with our research to resolve these remaining doubts.

PHC published lots of helpful information on their website, which can be found at: 

Jonathan Courtney

The world's most cost-effective rats?

 is a remarkable organization which trains rats to detect cases of Tuberculosis in Tanzania [1]. While not everyone will agree that the giant rats used by APOPO are cute, they definitely seem to be effective. Once trained, these little guys can screen around 40 samples of sputum for TB in under 7 minutes [2]. That's the same amount as a full day's work for a lab technician! So how do these rats perform so well? The key is a combination of specialized training and the rats' attuned sense of smell.

The training process begins at a young age, by socializing the rats with human activity, allowing them to be comfortable with a wide array of stimuli. Next, the researchers establish a 'clicking' sound as a conditional reinforcer associated with a food reward. This association mechanism is used in the later stages of the training, where the rat will be rewarded for pausing over the samples positive for TB. After the rat has learned to consistently detect the unique smell produced by the TB positive sputum, they move onto the final testing apparatuses, where they test 10 samples in quick succession.

This may seem all well and good you might say, but isn't it a bit too low-tech to be effective? Surely advanced lab equipment is a better solution for detection of TB than rats. Not so! In fact, these little guys are arguably superior to contemporary advanced medical technology, both in their cost and in their effectiveness. In several of the trials run by APOPO, the rats select samples that were not marked TB positive in the original lab test, but after checking again in the lab, in fact TB positive, but were simply missed in the first round of lab tests [3]. Indeed, tests performed by the rats were found to be more accurate than the standard practice of microscopy [4] [5]. So not only are the rats more accurate than standard lab work, they are also far more cost effective.

A TB detecting rat takes about 9 months to train, the total cost of which is around $2,000 USD [6]. Compare this to a fairly simple Gene Xpert, a device designed to detect the unique genetic information of the TB bacteria. These devices cost around $17,000 [7] and a further $15-20 per test for the lab workers in Tanzania [8]. The rats are not only faster than standard technological methods (can accomplish in 7 minutes what usually takes a researcher a day) they function at at least one eighth the cost. Since the rats work approximately 60 times faster than the average lab worker at detecting TB [9], they are approximately 480 times more effective than standard methods [10]!

The data seems to have surprising results - rats, not advanced medical technology, may be the way to go in identifying positive cases of TB. This may turn out to be a great opportunity to 'push the rope sideways' - to do a great amount of good by finding an intervention which is supported by evidence, but has been overlooked by other funders because it's such an outlandish way of helping people. We're currently in conversation with APOPO to learn more about their work, and will keep you updated!

http://www.apopo.org/en/tuberculosis-detection/about

[2] As cited in Apopo's information video: 

http://www.youtube.com/watch?feature=player_embedded&v=VrzpEfCUnjc#

http://www.globalpost.com/dispatches/globalpost-blogs/global-pulse/giant-rats-detect-tuberculosis-apopo

[4] Weetjens Bart J, Mgode Georgies F, Machang'u Robert S, Kazwala Rudovic, Mfinanga Godfrey, Lwilla Fred, et al. African pouched rats for the detection of pulmonary tuberculosis in sputum samples. Int J Tuberc Lung Dis. 2009; 13:737-743.

[5] Amanda M Mahoney, Bart J Weetjens, Christophe Cox, Negussie Beyene, Georgies Mgode, Maureen Jubitana, Dian Kuipers, Rudovic Kazwala, Godfrey S Mfinanga, Amy Durgin, Alan Poling. Using giant African pouched rats to detect tuberculosis in human sputum samples: 2010 findings.

The Pan African Medical Journal. 2011;9:28

http://www.finddiagnostics.org/about/what_we_do/successes/find-negotiated-prices/xpert_mtb_rif.html

[9] Referring to the 40 samples in 7 minutes cited above: (480min[8 hour work day]/7min[per sample] = 60)

[10] 60[times more samples per hour] x 8[less expensive] = 480. The numbers in this, and the previous note should be taken with a giant-rat sized grain of salt, as they are built on many crude generalizations, including the notion that the rats could work 8 hours a day. While the '480' figure doesn't, by any means, explain the complexities on both sides of the equation, I think it's fine so long as we treat it as a rough first pass.

How to  create the world's most effective charity

Giving What We Can's charity recommendations - currently 

 - are generally regarded as the most reliable in their field. I imagine many readers here donate to these charities. However, it is surprising that it is potentially pretty easy to start a charity more effective than any of them.

All you would need to do is found an organisation that fundraises for whoever Giving What We Can recommends, and raises more than a dollar with each dollar it receives. Is this hard? Probably not. As a general rule, a dollar spent on fundraising seems to raise at least several dollars. It's a pretty simple and fast multiplier that obviously beats putting your money in the stock market. An independent organisation raising money for Giving What We Can's top charities should do even better than a typical fundraiser, thanks to:

the strength of evidence, which is especially compelling to big donors;

the independent recommendation, which looks particularly credible and removes the perception of any ulterior motive;

a willingness to maximise (for example by focussing on regular or legacy donors);

the freedom to choose which of the three organisations they promote, depending on who they are talking to.

Putting your money into fundraising, rather than just giving it directly, does impose additional costs on the donors you inspire, and may '

' gifts to other charities. However, the logic of giving to Giving What We Can's top rated charities is that they make better use of money than most other individuals or organisations. So if you have a fundraising ratio significantly above 1:1, these downsides shouldn't much matter.

You might ask: if fundraising is the best thing to do, why wouldn't AMF, SCI or DtW just spend the money you give them on fundraising? There are many possible answers; in part it might discourage people from donating, if they believe that their money will only be invested into more fundraising, rather than spent on directly helping people. Also, the charities do engage in fundraising activities, both themselves and through external help, but would potentially be ineffective fundraisers, as their efforts are naturally spent predominantly on their work addressing diseases overseas. This is what they are good at, and efforts on their part to raise more fund would take up time and energy as well as money to research the most effective means of fundraising.

 and are willing to help out by having your money spent on effective fundraising, you can therefore easily increase your impact several times over. Just help take the pressure of fundraising off Giving What We Can's top charities by founding or giving to a separate organisation that does it for them.

Getting good at raising money for these other organisations is one of the things GWWC aims to do. Because we aren't concentrating on the ground work abroad, we may be in a better position to do that than the charities themselves. We might also seem more objective in fundraising for them than they do themselves. If you agree these kinds of fundraising organisations could the be the most promising charities out there, you can help out organisations like GWWC or GiveWell by getting involved as a volunteer, or donating to them.

Alternatively, maybe you could start up a fundraising organisation yourself. This isn't actually an impractical plan. Starting up a lean and effective fundraising organisation is difficult, but much easier than building a global team to distribute insecticide-treated bed nets. Any bright and energetic person in a rich country who went and received the necessary training would have a decent shot at getting such an organisation off the ground, and by doing so, you will be using your skills where they can help Giving What We Can's charities the most, whilst leaving them to do what they do best.

Learn about how to fundraise. For a popular introduction to learning to sell, check out 

. For evidence-based advice on raising money for charity, we recommend 

There are lots of ways to fundraise. Think about which methods might suit you best given your skills and connections. The highest average fundraising ratios are for 

Test it out. See how much you can raise per hour. And how much could this approach be scaled?

Create a business plan and raise money from effective givers.

If you would like to discuss the first steps required to make this happen, and how you could coordinate with others already taking this approach, including our sister organisation 

Krisztina Csortea

Last chance to have your say on AidGrade

Today is the last day you can vote on which topics you want AidGrade to cover next! It's your chance to steer research towards issues you think are important. There are roughly 40 options and you can choose three, AidGrade plans on covering 20 of them. The potential research areas include everything from micro health insurance to rural roads. You can find the survey 

And why should you vote? If you are reading this blog, you most likely care about effective aid. AidGrade, like GWWC, evaluates and recommends international development programmes on the basis of effectiveness. You can read more about what AidGrade does 

. Helping AidGrade select new topics is a great opportunity to bring more attention and donations to development issues you care about!

Julia Wise

Tradeoffs

Economists love to think about tradeoffs (or opportunity costs, as they call them). Any money we spend can't be spent on something else, so if I use $2.50 to buy a strawberry milkshake it means I'm not using that $2.50 to get the chocolate one or the mint chocolate chip one.

That's pretty easy to think about. But it also means I'm not getting a bus fare, a light bulb, or anything else with that $2.50. And if I buy that strawberry milkshake, according to standard economics it means there's nothing else in the world I would rather buy with that money.