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Stephanie Crampin

Halfway through Living Below the Line

It's Live Below the Line week! To find out why I'm living on a pound a day, see 

. I and the rest of the team have been 'living below the line' for two days now, and are very grateful to all our wonderful sponsors, who have managed to put the GWWC team at the top of the team leaderboard, with over £15,000 raised and being donated to SCI, to help them continue treating neglected tropical diseases in the poorest countries, and in one of the most cost-effective ways.

I planned my meals out before going shopping, making sure that I bought enough to avoid hunger pangs. Interestingly, I found out that if I voided the big bunch of bananas I had scanned and put them through separately, I was actually able to afford more!

I started off with a 45 minute run (quickly deciding that keeping this up all week might be a bad idea), followed by banana cooked into porridge, made with water. Oddly this was better than the cereal I'm used to.

Lunch was jam sandwiches and a banana, taking me right back to school packed lunches.

Getting peckish and cold during the day, I managed to consume a can of rice pudding and a fair amount of diet cola too. A coffee meeting in the afternoon became a meeting where I sat and politely sipped water- I think that this sort of thing will prove the most annoyingly restrictive part of the week.

Dinner was the most entertaining meal of the day, and surprisingly tasty due to the lack of fresh ingredients. I don't know if I can call it chili, but I made a stew out of kidney beans, mushy peas, passata, tomatoes and brown sauce.

I realised too late that value canned products come without easy-to-open lids, and, lacking a proper can opener, managed to prize them open with an attachment to a corkscrew that my dad had shown me how to use four years ago. I never thought I would need to use that information. I made enough dinner to last me all week, and with 100g of spaghetti the meal cost 32p. At the end of day one I didn't feel hungry at all, and was fairly confident that the week would go smoothly.

A pattern has emerged in my diet: porridge, sandwich, chili. Fortunately, I enjoy it.

So far I am halfway through and on track for completing the week as planned.

This week is supposed to be a challenge. Yes, I have planned it. And yes, I'm regulating my meals quite carefully, but what has been brought home to me is quite how much I have, rather than how little.

This is partly in the sense that while my diet is restricted, I still have all the other luxuries I am used to, including electricity, clean water, and free medical care.

I can only imagine the fear and hopelessness that someone forced to live without basic utilities would feel, cutting into their meagre food budget only as a last resort. The fact that I am used to frankly spending so much on food and other luxuries has helped me to realise that this week is only really about dipping my toe into the ocean of poverty.

I hope that by doing this challenge I can raise awareness of Schistosomiasis Control initiative, so they can continue to do great and effective work to help people for whom poverty is a reality.

The Giving What We Can team is currently topping the Live Below the Line leaderboard for fundraising, having raised £15,000, or enough to deworm 30,000 children for a year. To support SCI's amazing work further, please sponsor me or anyone else from the team.

The Giving What We Can team who are living below the line:

Tom Ash

Opportunity to intern with Giving What We Can 

Recruiting now; apply by 9am (UK time) on Thursday the 16th of May.

If you're here, you probably have a good idea of what Giving What We Can is about. Our mission is to find the charities which most effectively help those living in poverty and move as much money to them as possible, in part by encouraging people to pledge to donate 10% of their lifetime income to this end. That's a big project, and we're growing fast. To support this growth we now need someone to help manage our finances and fundraising, so if you'd like to join the team this is your chance!

The position we're recruiting for is Finance and Fundraising Manager. In this role, you would work closely with the director of our Operations division, which supports the different organisations within the Centre for Effective Altruism, including Giving What We Can and our sister charity 

. If you work for us you'll be part of a focused team of intelligent, enthusiastic, driven colleagues. Everyone involved in CEA is passionate about their work, making the office an inspiring place to be.

The current Finance and Fundraising intern has helped to write budgets, set up a new charity in the US, and create financial procedures and book-keeping systems almost from scratch. In doing so, he's made a major difference to the success of Giving What We Can and the Centre for Effective Altruism family that it belongs to. If you follow him, you would do so too.

We're looking for someone who can start soon, and ideally commit to at least six months, though we're flexible about time commitment. To find out more about this opportunity, please see our 

. If you're interested in the position, we invite you to 

. And if you know anyone else who you think might be keen on this role, do share this blog post with them.

Carolina Flores

Dan Pallotta: the Way We Think About Charity is Dead Wrong  

There are a lot of persistent myths about how charities should be evaluated and what operational standards they should follow. In 

 (also shown below), Dan Pallotta argues that these misconceptions are very harmful to the growth of charities and hence to how much of a difference they can make in the world.

First of all, he highlights the following five differences in the rules we apply to the non-profit sector and to the rest of the capitalist economy, and considers the negative consequences of these constraints :

The entrenched idea that making money helping others is immoral (whereas making money selling useless consumerist goods is a respectable career) creates a stark choice between making money and working in the non-profit sector. This leads many talented professionals who could make a valuable contribution away from the non-profit sector.

When donating, we would prefer the money we give to go straight to the needy, but that might be counterproductive: if some of the money donated is invested in reaching out to get more donations by raising awareness of the project, it is possible to raise a lot more funds and therefore have more impact.

There is a negative reaction to trying out new ideas – which may fail – in the non-profit sector, because this means that some of the money donated might not reach the intended target. However, in any enterprise, without innovation – which entails the possibility of failure – you can’t grow; without growth, impact is diminished.

In the non-profit sector, there is much less willingness to wait before a project shows results, but many good ideas – with the potential of having a large impact - may take time to implement.

As charities can’t pay profits to attract capital, they are kept out of the multi-trillion capital funds that would allow much more ambitious projects to be set up.

Overall, Pallotta believes we are prone to ‘confusing morality with frugality’, which leads to the widespread conception that the percentage of overhead costs is a good measure of a charity: one should donate to the charities with least overhead, because those are the ones that put most of their money in direct intervention. But this is self-defeating. Overhead – in the five forms outlined above - can be an important part of the cause by making it grow. For example, by investing more in fundraising, one can multiply the value raised. Even though a smaller percentage of the funds goes directly to the cause, a bigger amount ends up being used for that purpose, and this means that we can make a much bigger difference.

For these reasons overhead is not the best measure of a charity. Obviously, money must go into the cause, so there is some grain of truth to the anti-administration perspective; but the overall impact of a certain intervention is what is most important. This means that we should look at an overall metric, such as QALYs/dollar, which takes into account not just the internal structure of a charity and the relationship with donors but also the impact of the intervention that the charity implements. This measure allows us to focus on helping as many people as we can.

Giving What We Can

What We've Been Reading

This week's list of recommended reading includes: 

Financing Global Health 2012: The End of the Golden Age?

; IHME’s fourth annual report on global health expenditure, a 

, an account of how efforts to relieve problems caused by the earthquake in Haiti did more harm than good, and an 

 on the recent permission given for aid money to be spent on the military>

This "is IHME’s fourth annual report on global health expenditure and includes preliminary estimates for health financing in the most recent years. In this year’s report, IHME built on its past data collection and analysis efforts to monitor the resources made available through development assistance for health (DAH) and government health expenditure (GHE). It confirms what many in the global health community expected: After reaching a historic high in 2010, overall DAH declined slightly in 2011, with some organizations and governments spending more and others spending less."

Guest post from David Barry about deworming cost-effectiveness

"This is a guest post by David Barry, a GiveWell supporter. He emailed us at the end of December to point out some mistakes and issues in our cost-effectiveness calculations for deworming, and we asked him to write up his thoughts to share here. We made minor wording and organizational suggestions but have otherwise published as is; we have not vetted his sources or his modifications to our spreadsheet for comparing deworming and cash. Note that since receiving his initial email, we have discussed the possibility of paying him to do more work like this in the future."

"A shocking account of how the world failed Haiti"

David Cameron gives green light for aid cash to go on military

"Hundreds of millions of pounds from Britain's aid budget are expected to be diverted to peacekeeping defence operations as the government moves to build up support on the Tory benches for overseas development. Amid deep unease among Conservative MPs at the size of the £10bn aid budget, which has increased while defence spending has been cut, David Cameron said on Wednesday that he was "very open" to the idea of pooling more resources."tart out by joining forces with an established organization who's already working on what you care about. Seriously, unless you're already ridiculously rich + brilliant or ludicrously influential, going solo or further fragmenting the philanthropic world by creating US-Charity#1,238,202 is almost certainly a mistake. Now that we're all working together here, let's keep in mind that only a few charitable organizations are truly great investments -- and the vast majority just aren't. So maximize your leverage by investing your time and money into supporting the best non-profits with the largest expected pay-offs."

Cost-effectiveness of nets vs. deworming vs. cash transfers - GiveWell Blog

"This post discusses how we see the relative "bang-for-the-buck" - good accomplished per dollar spent - of three interventions: Distribution of insecticide-treated nets to fight malaria, the intervention carried out by our #1 charity (the Against Malaria Foundation). Unconditional direct cash transfers, the intervention carried out by our #2 charity (GiveDirectly) Treating children for parasites (soil-transmitted helminths and schistosomiasis (also knows as bilharzia, bilharziosis or snail fever)), the intervention carried out by our #3 charity (the Schistosomiasis Control Initiative)."n.co.uk/world/2012/dec/23/africa-counterfeit-medicines-trade)

"International health experts are warning of a mounting health crisis in parts of Africa because of an influx of counterfeit medicine from Asia that is playing havoc with the treatment of diseases such as malaria."

"Precise data is hard to track down because of the informal nature of African health systems. But several recent studies warn that as many as one-third of malaria drugs in Uganda and Tanzania are fake or substandard, with most believed to originate in China or India."

An Economist's Guide to Year-End Charitable Giving Freakonomics

"The end of the year is a giving season for many (I suppose a cynical economist might think tax deductions has something to do with it). Most of us like to make sure we're making well-researched and wise decisions when it comes to our money, be it reading the online reviews before a purchase or investing our savings. By contrast, donating to charities can seem like a "black box." Many of us our rely on what feels right or seek out an organization in an area we have a personal connection to, but examining some bad habits about charity giving might help make sure our dollars go farther this giving season."

"Bad Giving Habit #5: Giving to things that advertise well, rather than to what works

I've seen hundreds of charities and aid organizations in my work as a development economist and with my work with the non-profit I founded, Innovations for Poverty Action (IPA). IPA evaluates the effectiveness of poverty interventions around the world, and then works to scale-up the ideas most cost effective. Knowing if an organization is having an impact can be difficult, but there are a couple of shortcuts you can take."

Lee Bishop

Why I Give: Lee Bishop

I’ve always wanted to help others and donating to charity is probably the easiest way to do that.The general consensus seems to be that it just isn’t feasible to donate a large proportion of your income to charity, especially in the difficult economic climate at the moment.

I earn a decent, but very modest wage which is several thousand pounds below the UK average, and I donate slightly over 10% of that to charity. I have the advantage that I have always been frugal with my money and charitable giving has been part of my life since my first part time jobs. I even donated a proportion of my student loan when I was a ‘poor’ student. Now that I’m working full time I’m donating much larger amounts, but I’m also earning more so I feel wealthier than ever.

It was only recently, perhaps in the last couple of years that I really started thinking about which charities were best to donate to. When I read a BBC article about Giving What We Can and did some research into cost-effective giving it was a massive eye opener. It is astonishing that in such a generous country, where so many people give so much money, that so few people feel they understand which charities are the most cost-effective or best to give their money to. People will always be driven to give to causes that are close to their hearts or have touched them personally, but there can be huge differences between even similar charities in terms of the good that you can achieve by donating.

By donating 10% of my income I can save lives with money that I don't need. There is nothing I could spend my pledge money on that would give me the sense of satisfaction or well being that I experience through giving. Supporting the most cost-effective charities has got me into work on Monday mornings when the prospect of stacking shelves, painting railings or calling customers didn't ignite me with passion.

I am still able to do all of the things I love despite my pledge, including attending football games and going out for Indian food. I have just spent the Easter Weekend in the Lake District and I’m going on holiday abroad twice this summer. When I look at how much money I have to spend each month, I simply don’t factor in the money I give to charity, in much the same way as I don’t count money I know will go to the tax man.

In addition to my pledge I also fundraise for charity around once a year. In May 2012 I ran the Edinburgh Marathon to raise awareness for Giving What We and money for 

; 6 months after having open heart surgery.

I could give more than I do, but I've found a level of giving that I am at peace with and can maintain. I would really like to help people realise that regular cost-effective giving (at whatever percentage the individual is comfortable with, be that 10% or 1%) can make a phenomenal difference to those who need it without requiring a complete lifestyle change.

Rob Wiblin

Should we fund nutrient fortification for kids in the developing world? Part 2

Today we are releasing another part of our evaluation of Project Healthy Children, this time generally looking into how worthwhile micronutrient fortification of staple foods is. For those who don't have time to read the 

Micronutrient deficiency is a serious problem in the developing world, with many groups, in particular children and pregnant women, failing to get all of the nutrients they need for ideal health and development.

The most problematic deficiencies identified are in iron, vitamin A, iodine and zinc. Which deficiencies are present differs a lot by region.

Mass fortification, in which micronutrients are put into staple foods, appears to be one of the most effective ways to quickly reduce such deficiencies. There are numerous case studies showing fortification apparently improving the nutritional status of a population.

It is hard to quantify the benefits provided by micronutrient fortification, but several groups have tried. We have not yet critiqued their research methods, but present their results.

The 'benefit-cost' ratio of food fortification is usually reported at 5 or higher, and in some cases over 20. The reported cost of saving a 'year of healthy life' ranges widely by location and trial, but in many cases falls between $20 and $100 per year of healthy life.

Nonetheless, the quality of evidence on micronutrients, fortification and health is patchy. While all of the claims above seem reasonable, there is reason to be cautious in interpreting the data available.

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.

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 