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Stephanie Crampin

The New York Times: ‘Putting charities to the test’

Read Giving What We Can, and in particular Toby Ord’s latest media feature in 

this article, ‘Putting Charities to the test’

 by Tina Rosenberg of the New York Times. Rosenberg illustrates Toby’s convincing case for the fact that, at the festive time of year where many charities receive the majority of their donations, considering the effectiveness of your donations could be more important than any other time.

She goes on to discuss the evaluation tactics of GiveWell and Giving What We Can, before pointing out some of the challenges that face the sentiment that cost-effectiveness should be the decision-making factor when considering which charity to give to. The article concludes with a message we all want made clear that the solution to the problem of complicit charities is to be an educated donor, and demand evidence that our charities of choice are spending their donations as they should.

“December is giving season. According to 

 of their annual contributions from individuals arrives between Thanksgiving and New Year.

“How do you decide where to give? People want to give where their money will be used effectively, of course... Overhead does matter. But it is dwarfed by a different question: Is this group’s work effective?

““When people think of giving, they look at the issue of whether a charity has a 10 or 20 percent administration cost, and that makes the difference for them,” said Toby Ord, a researcher in moral philosophy at Oxford University and founder of an organization based there called 

. “But in reality some things they could be funding are hundreds or thousands of times more effective than other things. People never guess there could be such large discrepancies. Instead of a 20 percent difference, there can be a 1,000 percent difference.”

 called “The Moral Imperative Towards Cost Effectiveness,” Ord poses the example of helping the blind... According to 

, the cost of training a dog is around $42,000. So if you had $42,000 to give, you could greatly improve the life of one blind person... But what if instead, you spent that $42,000 on eye surgeries for people with trachoma in Africa? Helen Keller International, which works to prevent blindness, says trachoma surgery 

 as $25 per person and is 80 percent effective. That same money, then, could restore the sight of 1,344 people. If you value all lives equally — and in a minute I’ll get to the fact that we certainly don’t — then if you are training a guide dog, you might as well be giving to a charity that wastes 99.93 percent of its money.

“Ord’s point is that if we care about what our money is doing, we should look for the most effective charities. (His group asks people to pledge to give 10 percent of income to the places where it will be most effective. He has decided he can live comfortably on $18,000 pounds (a little less than $30,000) per year and will give away everything he earns above that.)

“What are the “most effective charities?” Ones that:

Aim to solve the most serious problems (in the normal calculus, this means that providing bed nets to save children from malaria ranks above helping public radio stations or art museums).

Employ cost-effective strategies (trachoma surgeries, rather than training guide dogs, to help the blind).

Are competent and honest. The percentage of donations spent on overhead is one measure of these qualities.

Can make good use of each additional dollar. This is the hardest point to assess, but it asks whether the group has the program on the ground to use your money well, and whether your donation will make something happen that otherwise wouldn’t.

“Most individual donors lack the resources or training to determine which charities meet these requirements. So does Ord, for that matter, so he relies heavily on the research of a like-minded Brooklyn-based organization called 

Givewell “will always choose charities that work in the poorest places, as money goes further there. A tiny amount can do a lot (try getting eye surgery for $25 in the United States) and basic interventions are still desperately needed. “Nobody in the West needs a bed net,” notes Berger. “We’ve eradicated malaria. But a lot of problems we’ve solved continue to exist in other places.”

Rosenberg points out the downsides of basing our charitable decisions solely on cost-effectiveness:

“Following the numbers, however, is not always wise. The numbers measure service delivery, but charities sometimes do very useful things the numbers can’t capture. 

, for example, piloted the use of accompagnateurs in Haiti — community members hired to help people on AIDS therapy to take their medicines. That system is now being used all over the world, producing value that goes far beyond its measurable impact on the Haitian patients.”

She also brings up factors that might affect these decisions other than effectiveness:

“Even if you define effectiveness very broadly, it’s far from the only consideration in choosing a charity. “People care about what they care about,” said Katherina Rosqueta, the executive director of the 

 at the University of Pennsylvania, which helps philanthropists make more effective donations. “If someone cares deeply about closing the achievement gap in the U.S., they won’t be convinced to finance health care in the third world. It would be foolish to think that the only way a donor can do good is to go to the top-ranked, most efficient nonprofits.””

The parting words put at least the above concern into perspective:

“When we do give completely altruistically, we often give nearby — to our local soup kitchens or to help the victims of disasters like Hurricane Sandy. It is normal to value what happens near us more than what happens across the world. But Ord has an interesting response: how much more value do we put on a neighbor’s life than that of someone in Kenya or India? Is it worth 10 times more? Twenty? It’s surely not worth 1,000 times more — so put your money into bed nets.

“Charities are often complicit — they will sometimes choose ineffective strategies like canned food drives because they are more attractive to donors. The solution is to be an educated donor. Charities now publish the percentage of donations they spend on fulfilling their mission. We should demand evidence that they’re spending it right.”

William MacAskill

GiveWell’s Recommendation of GiveDirectly

GiveWell recently updated their recommended charities. The principal change was that they now have a third top-recommended charity, GiveDirectly, a charity that makes unconditional cash transfers to the very poor in Kenya. GiveWell gave GiveDirectly their #2 ranking - above Schistosomiasis Control Initiative but below Against Malaria Foundation.

My initial reaction to this recommendation was surprise, and, after reading the material available on their website, I remain surprised that they have 

 GiveDirectly to the #2 slot. This post explains why. In a follow-on post, I'll take the opportunity to make some more general comments on things that I find lacking or am concerned about in GiveWell's research and recommendations. Before I begin, I'll note that their blog and website does repeatedly mention that more information will be released soon, so hopefully the issues below will be addressed there. I'll also note that GiveWell takes direct criticism from others as both helpful and a sign of respect, which is exactly how I intend what follows. Finally, I'll caveat that the views below are my own first reactions; they aren't meant to represent the views of GWWC as a whole.

GiveWell mention that cash transfers face an unusually low burden of proof. If that's a low burden of proof for doing 

 good, then I agree. I think that cash transfers would be a reasonable standard of comparison by which to judge other charities - it would be an indictment on the charity if they were performing worse than cash transfers.

However, there are theoretical reasons why direct cash transfers should be less effective than the 

 intervention in the world. There are a number of ways in which we might be able to 'leverage' our resources to achieve a surprisingly large impact, discussed below. Cash transfers do not exploit any of these.

Let us suppose that those in extreme poverty are perfectly rational, with perfect information. Even if so, we should expect people - anyone, but especially those whose basic needs are not met - to use money in order to benefit themselves or their household rather than whatever would have the largest total benefit, including the effect on those around them. That certain goods have positive 'externalities' is not a reason for individuals to purchase them, whereas it should be a reason for donors to purchase them. So by purchasing and providing goods with high positive externalities, the best charities should be able to outperform cash transfers.

Far from being a purely theoretical point, positive externalities actually seem to be key for the best interventions. The best health interventions increase productivity, which benefits the individual but also benefits those around them. In addition, preventing one person from catching a contagious disease prevents them from passing it on to others. Furthermore, parents may not be motivated to invest the socially optimal amount in their children's health and education. Not only does a lot of the benefit of this go to their children into the far future, but higher productivity will help other future citizens of the country. 

 has found that income increases of the extremely poor are often spent making life more pleasant, such as by buying nicer-tasting food, rather than more, or more nutritious, food. This is discussed in an accessible way in the book 

GiveWell have data on how these cash transfers are spent: they could compare the positive externalities of tin roofs with healthcare. All of the points above have also 

 by GiveWell in one of their blog posts, which makes it surprising that this issue wasn't discussed in this release.

The extremely poor can't currently buy albendazole (a deworming drug) for $0.50. Those living in rural areas simply can't access it without using considerably more than $0.50's worth of time travelling. In contrast, thanks to economies of scale, a mass deworming program 

 able to provide albendazole and other drugs for ~$0.50 per treatment. One could respond that the market would provide albendazole if it there was demand for it, but it's unclear whether that's true in the situations in which deworming charities operate. This is at least worth discussing.

Like the issue of externalities, this concern holds even if we assume the extremely poor to be 'perfect' economic agents. But there are predictable ways in which they are not.

An important way in which the extremely poor differ from idealised economic agents is lack of information. How much can we expect the extremely poor to know about the health benefits of consumption of albendazole? Or even the difference between long-lasting insecticide treated bednets and untreated bednets? For the world's poorest people, reliable health information can be too expensive, or simply impossible, to access. This creates a large industry of local practitioners with no medical training who dispense unhelpful or even dangerous advice. For those who would like to learn more, this problem is also discussed in Poor Economics.

Healthcare is often regarded as a case where markets fail because the 'information asymmetry' between the consumer and supplier is so large. For this reason among others, government and non-profit providers play a much larger role in healthcare around the world than they do in most other markets. We should expect, and have plenty of empirical evidence suggesting, that the extremely poor are extremely poorly informed about medicines and healthcare. As a result, it is not foolish to hope that experts could do additional good by promoting or distributing medicines they wouldn't otherwise choose to buy.

This was the issue on which GiveWell focuses in their analysis, in their discussion of whether cash transfers increase alcohol and drug consumption. I personally would expect this to be a case where the poor behave closest to the standard economic model; with so little money, spending choices can be a matter of life-or-death, so the poor will likely think extensively about their purchases given the knowledge they have.

That said, the poor, like most of us, may 

 than we would like. This creates a kind of positive externality: as altruists we care about their future selves as much as their present selves, whereas they might care more about their present selves. There is some evidence, again discussed in Poor Economics, that the poor, under high stress and faced with constant temptation, struggle to save as much for the future as they would like.

I don't take the above theoretically driven concerns to demonstrate that GiveDirectly can't be one of the best charities out there. But they do make me initially skeptical. What surprised me is that GiveWell didn't address or even mention any other than the 'rationality' concern. There was only a discussion of whether the additional cash is used to purchase alcohol or other drugs, or whether it has unintended side-effects like causing jealousy among neighbours.

In addition to the doubts raised above, I had some other concerns with GiveWell's methodology.

My overall impression of GiveDirectly is that the evidence behind it is considerably more limited than either AMF or SCI. One salient instance of this is that, as far as I can tell, GiveWell rely on self-reported data in their assessment of where received cash is spent (where they suggest that 67% is spent on home improvement), in precisely a context where we would expect self-reporting to be misleading. Another is that, though there is extensive economic analysis of cash transfers, this has focussed on "income transfers" rather than "wealth transfers" (to use the distinction that 

), and we might see very different effects between the two.

2. Lack of discussion of cost-effectiveness

One factor that I found very surprising is that there was no almost no discussion of how beneficial the marginal expenditure of cash transfer recipients actually is. How beneficial is it to have a metal roof rather than a bednet? What are the long-term benefits, and benefits to others, of metal roofs, as compared to bednets? This is something on which GiveWell has said more information will follow, so I won't dwell on it. But given the crucial importance of the question, I'm surprised it wasn't discussed in the basic page.

More generally, I was very surprised by the limited discussion around "what do you get for your dollar?" Out of a roughly 8000-word page, only 450 words were dedicated to this question. GiveWell claims to agree with GWWC that one should give to the charities with the best "good out per dollar in" ratio; given this, I would expect them to consider "what do you get for your dollar?" to be the crucial question.

I look forward to understanding better the thinking behind this new recommendation as GiveWell releases more information on the subject. For now, at least, I'm unconvinced.

Giving What We Can

Why We Don’t Recommend Microfinance

 on economic empowerment to include our latest findings on microfinance as an effective form of giving. It's an intriguing solution to many development problems, and has been heralded by everyone from the UN to the Norwegian Nobel Committee as a wonderful new kind of economic empowerment. Unfortunately, however, there is little evidence to support such claims.

The few methodologically sound investigations of microfinance that exist, and you can count them on one hand, have largely shown that it makes little difference on a large scale - in contrast to the anecdotal success stories that have made microfinance so exciting for some people. One randomised control trial study in the Phillipines actually found that recipients' self-reported well-being decreased compared to the control group. The one bright spark - a study in Kenya which found that a microsavings scheme (as opposed to the normal micorcredits programmes) produced greater business investment and wealth for women - was based on a small sample size of 163, of which almost half didn't even participate in the scheme.

Despite the paucity of evidence behind it, microfinance has attracted a great deal of philanthropic and commercial interest. This makes it even less likely that there is a funding gap for those places with the greatest need and demand for such programmes.

So although there's not enough evidence to be sure, on the basis of what we've got, we have unfortunately had to conclude that we should not recommend economic empowerment as an effective form of giving.

Peter Hurford

The Community That Stays Together, Gives Together

, is a group that is united by taking a pledge to donate 10% of one's income to seriously affect extreme poverty in the developing world. However, donating is still widely considered an individual affair, despite criticism(1).

So why would people want to join together and make their giving public? Because it turns out there is value in joining together and creating a community around a common cause. In this essay, I will explore the benefits that members of a community get from associating with a group, specifically focusing on Giving What We Can.

Writing in his book Politics, Aristotle noted that people are social animals. Since then, much evidence from social psychology has been marshaled to back him up. People have a tendency to form groups with common causes(2), and frequently adopt the group as part of their personal identity(3) even to the point of thinking like the group(4) and assuming the group thinks like them(5). The power of a group is considered so strong that joining has typically been categorized as a fundamental human need(3,6).

But people don't stop there. Those who associate with a group will also act to benefit their own group at an individual cost to themselves(7), typically developing an "in-group / out-group" bias in their thinking(8,9,10) and sometimes going as far as seeing groups with opposing missions as a direct threat(11). Many people even derive their self-identity from the values of their group, placing large amounts of value and emotional significance on group membership(12).

By forming a community, people can group together to accomplish goals that no individual could do on their own, and having a strong group identity is fundamental to doing a joint job well(13). Communities are what built Wikipedia and Linux, and each tries to create identity and norms. By joining Giving What We Can, members endorse the values of the organization and put on a public face to spread their message to others in a coordinated way that they wouldn't be able to alone.

Countless examples exist of people coming together with a common objective of doing something hard, yet rewarding, and groups are an excellent place to do that - to keep everyone on task and motivated. Perhaps the most famous example is 

, founded in 1935 to create a group to support each other in staying sober. However, while AA hasn't yet been demonstrated effective or ineffective due to methodological flaws(14), another similar group demonstrates the ability of groups to curb behavior - Weight Watchers(15), a comprehensive diet plan that includes group support.

When people associate with a group, members of that group become the reference point for social comparison, and people continue to adopt in-group attitudes and beliefs as their own(16,17), especially when information comes from group members perceived to have expertise18 and especially when the group in question has positive values(19). Thus, getting someone to join a group with a strong identity of "my kind of people act this way" is one of the more effective ways to inspire behavioral change, and typically the justification for this change will come later(20,21).

Peer pressure can be dangerous - by falling into the wrong group identities, high school kids end up abusing drugs, alcohol, cigarettes, and stand an increased chance of dropping out(22). However, peer pressure can also be beneficial - by falling into the right group identities, high school kids will be less likely to cheat(23).

Many members of Giving What We Can were already committed to giving large portions of their income to charity before joining. However, just by being in the group, one is more likely to keep giving, and stay giving longer than one otherwise would without access to such a community.

In a group with a defined level of contribution, members will feel a social pressure to exert this level of effort(24). I think, given the benefits of donating to effective non-profits to those in extreme poverty, it's uncontroversial to describe membership in Giving What We Can as "peer pressure for the common good". Assuming members want to stay committed to this cause, joining Giving What We Can is a great way to make use of this peer pressure effect to stay a giver.

Lastly, joining together in a group like Giving What We Can allows people to present a unified voice of advocacy and also gives them the encouragement needed to stay motivated. But Giving What We Can also allows people to share information and come to better decisions. Membership involves a commitment to find the best opportunity for helping alleviate extreme poverty and 

However, extreme poverty is complex, and lots of new information and research comes out every day. It takes a lot to stay on top of it, and it would be difficult to expect any one person to do all of it on their own. Luckily, they don't have to. People can share research and other relevant information with a community and distribute the work, thus ensuring everyone stays on top of the latest trends.

Having a community publicly surround the cause of effective giving provides many benefits to those receiving the donation. However, a community can help those within the community as well:

It can provide a public face for better understanding and advocacy,

It can provide peer support to keep people motivated and engaged, and

It can provide a place to network and share information

Hopefully, Giving What We Can and related "effective altruist" organizations will grow and more people interested in helping those in extreme poverty will join up, making us all stronger together.

Covert Virtue: The Signal That Doesn't Bark

2: Deutsch, Morton and Harold B. Gerard. 1955. "

A Study of Normative and Informational Social Influences Upon Individual Judgement.

" Journal of Abnormal Social Psychology 51: 629-36.

3: Ashforth, B., Harrison, S. and Corley, K. 2008. "

Identification in Organizations: An Examination of Four Fundamental Questions.

Culture and Conformity: A Meta-Analysis of Studies Using Asch's Line Judgment Task.

" Psychological Bulletin 119 (1): 111-137.

5: O'Brien, Ed and Phoebe C. Ellsworth. "

More Than Skin Deep: Visceral States Are Not Projected Onto Dissimilar Others.

" Journal of Psychological Science 23 (4): 391-396.

The Role of Distinctiveness in Social Identity and Group Behavior

", In M. A. Hogg and D. Abrams (Eds.), Group Motivation: Social Psychological Perspectives: 1-15. London: Harvester Wheatsheaf.

7: Fowler, James H. and Cindy D. Kam. 2007. "

Beyond the Self: Social Identity, Altruism, and Political Participation.

" The Journal of Politics 69 (3): 813-827.

The Role of Social Groups in Political Thinking.

" British Journal of Political Science 18 (1): 51-76.

9: McCallion, Michael J. 2007. "In-Groups and Out-Groups." In George Ritzer (ed.), 

11: Muzafer, Sherif, O. J. Harvey, B. Jack White, William R. Hood, and Carolyn W. Sherif. 1954. 

Intergroup Conflict and Cooperation: The Robbers Cave Experiment

Understanding Party Identification: A Social Identity Approach.

13: Peteraf, Margaret and Mark Shanley. 1997. "

Getting to Know You: A Theory of Strategic Group Identity.

"Strategic Management Journal 18: 165-186.

14: Ferri, M., L. Amato, and M. Davoli. 2009. "

Alcoholics Anonymous and Other 12-Step Programmes for Alcohol Dependence.

15: Heshka, Stanley, James W. Anderson, Richard L. Atkinson, Frank L. Greenway, James O. Hill, Stephen D. Phinney, Ronette L. Kolotkin, Karen Miller-Kovach, and F. Xavier Pi-Sunyer. 2003. "

Weight Loss With Self-help Compared With a Structured Commercial Program: A Randomized Trial.

" Journal of the American Medical Association 289 (14): 1792-1798.

Social psychology of intergroup relations

17: Turner JC. 1982. "Towards a cognitive redeﬁnition of the social group." In 

, ed. H Tajfel, pp. 15-40. Cambridge, UK: Cambridge University Press.

18: Kameda, Tatsuya, Yohsuke Ohtsubo, and Masanori Takezawa. 1997. "

Centrality in Sociocognitive Networks and Social Influence: An Illustration in a Group Decision-Making Context.

" Journal of Personality and Social Psychology 73: 296-309.

19: Pool, Gregory J., Wendy Wood, and Kira Leck. 1998. "

The self-esteem motive in social inﬂuence: agreement with valued majorities and disagreement with derogated minorities.

Blog

The New York Times: ‘Putting charities to the test’

GiveWell’s Recommendation of GiveDirectly

Why We Don’t Recommend Microfinance

The Community That Stays Together, Gives Together

The Copenhagen Challenge Paper for Education - What does it mean for fighting poverty?

Toby Ord on morality and helping others

We are Recruiting!

Happy Birthday Giving What We Can!

Researching What We Should

New Malaria Vaccine Trial Provides Variable Results