Why it should be easy to dominate GiveWell’s recommendations

GiveWell’s charity recommendations – currently Against Malaria Foundation, GiveDirectly and the Schistosomiasis Control Initiative – are generally regarded as the most reliable in their field. I imagine many readers here donate to these charities. This makes it all the more surprising that it should be 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 GiveWell 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 GiveWell’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 targeting the wealthy, and focussing on regular or legacy donors)
  • an intrinsic motivation to do good
  • 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 ‘crowd out’ gifts to other charities. However, the logic of giving to GiveWell’s top rated charities is that they make (much) 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 GiveDirectly just spend the money you give them on fundraising? My guess is that it’s simply a bad look. If they spend too much on fundraising, it will irrationally scare off their existing and potential donors. Even if a charity should ideally spend most of its receipts on further fundraising in order to grow more quickly, the option simply isn’t available. The social norm against ‘optimising fundraising‘ is generally helpful, because intense competition between charities for donations would cause ‘rent dissipation’, and less total money would flow to charity recipients. But if your charity actually is much better than other charities, and so it’s good when you ‘take’ their money, this social norm does harm by preventing you from doing so.

So, if you are unlike most donors and are willing to have your money spent on effective fundraising, you can easily increase your impact several times over. Just help GiveWell’s top charities take their fundraising efforts ‘off the books’ by founding or giving to a separate organisation that does it for them.

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. If you would like to discuss the first steps required to make this happen, drop me an email (robertwiblin [at] gmail [dot] com) and I can put you in touch with a team already working on this approach, who could direct you towards legal and financial support.

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  • Mestroyer

    In a way, doesn’t GiveWell already do this?

    Also, what if next, someone creates a charity for raising funds for the fundraising charity?

    • robertwiblin

      GiveWell doesn’t do direct fundraising, as far as I know. While they could be a very good target for donations, I don’t believe they currently face a ‘funding gap’ for their plans.

      Fundraising for fundraisers might be a good idea. At the level above that, I think it ceases to make any practical difference to your behaviour which ‘level’ of fundraising you are doing.

    • Jess Riedel

      GiveWell doesn’t go out and contact people, e.g. distributing leaflets on college campuses or directly mailing requests for donations.  My understanding is that their promotion is essentially confined to their website and the substantial word-of-mouth generated.

    • http://www.facebook.com/profile.php?id=5310494 Sam Dangremond

      Turtles all the way down. 

  • IMASBA

    Charity is not a solution to begin with: if you have one rich man and one poor man, the rich man could be charitable and keep the poor man from starving, even “teach him how to fish”, but the rich man would still control the life of the poor man, add to this that in the real world the middle class are more charitable than the rich (as a percentage of income) when you take into account that the charitable gestures of rich people mostly flow back to them through tax breaks but also consumption of whatever it is they’re selling.

    When you’re a billionaire and want to improve the world the best things you can do are lowering your profit margin and paying more taxes, charity just gives you and your heirs a lot of power over other people’s lives, while no one ever voted you into any public office, and that’s usually not a good thing.

    The very existence of billionaires is part of the problem: if more went to the employees and less to the owners then many countries would not have any poverty at all.

    • robertwiblin

      None of the forms of charity suggested by GiveWell provide rich donors with any significant power over the lives of beneficiaries. They just provide people with the option of taking free cash, bed nets or deworming tablets if they like. The good done by those items surely outweighs any (negligible) loss of autonomy.

      If the money were given to governments instead, it would very likely be used in ways that delivered smaller welfare gains for people than, for example, bed nets.

      • IMASBA

        The donors choose what the poor people can get: they choose whether it’s a school or a hospital that gets built, that’s power, interference

      • B_For_Bandana

        GiveDirectly seems to solve this problem, by just giving needy people cash. But I guess you could argue that donors are still exerting power through their choice of which people to give to, and how much to give.

        It’s not hard to see why some radical leftists argue that violent revolution is the only just answer to inequality; the only resources and power worth having are those that the upper class will never give up voluntarily.

      • IMASBA

        “GiveDirectly seems to solve this problem, by just giving needy people cash”

        Ideally you’d want them to become independent, start businesses with that money (many donors express this), but then the rich donors just buy shares in those businesses and become the biggest benefactors of their own charity and you’re back at high income inequality.

        “the only resources and power worth having are those that the upper class will never give up voluntarily.”

        Yeah, there’s probably a lot of truth in that.

      • IMASBA

        To elaborate, just take the example of catholic hospitals refusing to perform certain procedures even though they are legal in the country in question. If the money required to run the hospitals went to taxes instead of the catholic church then people would have more treatment options and they would get to elect the people who can change the law to allow even more treatment options. Another example would be evangelical or muslim “charities” recruiting followers in Africa using the promise of aid, and using their clout to change local laws (the death penalty for gays in christian Uganda) or force children into combat training (muslim madrassas). A third example would be the American conservative billionaire Koch brothers (oil industry) donating science class material to American schools, with the material being filled with pseudoscience meant to make kids question climate change.

      • robertwiblin

        Minor losses of autonomy have to be weighed up against other benefits. If someone rich chose you and offered you free money, would you say you benefitted overall?

        If you think that governments do a good job of helping people, perhaps you should either donate your discretionary income to the government, or give it to an organisation that effectively advocates for higher tax rates on the wealthy.

      • IMASBA

        “Minor losses of autonomy have to be weighed up against other benefits. If someone rich chose you and offered you free money, would you say you benefitted overall?”
        First, ask Faust that question.
        Second, he question is not “would a poor man be better off in a rich man’s world if a rich man gave him some money?”. The question is “would a poor man in a rich man’s world, receiving some money from a rich man, be better off than his twin in an alternate world that is not a rich man’s world?”. In other words you should not take the world being a rich man’s world as a given that is somehow dictated by the laws of physics. When rich people fuel climate “scepsis”, buy politicians and are declared “too big to jail” then the effects of that on the lives of “the people” are far from “minor”.

        “If you think that governments do the best job of helping people, perhaps you should either donate your discretionary income to the government, or give it to an organisation that effectively advocates for higher tax rates on the wealthy.”

        Yes, those are very good suggestions, but we see very few of the financial elites actually do this, they either want to impose their (usually conservative) ideology on the masses or they think they are that rare enlightened despot that can take better care of the people than a democratic government of the people, by the people, for the people. And why wouldn’t they? Many people worship them like gods and they hold more power than a small country. 

        Other options would be to give more money to the people directly by lowering your prices or increasing wages per hour (perhaps combined with shorter work weeks so you reduce unemployment), but again, we do not see this happening in the real world unless it is forced.

      • http://juridicalcoherence.blogspot.com/ srdiamond

        Robert Wiblin,

        If someone rich chose you and offered you free money, would you say you benefited overall?

        You imply that nobody would refuse charity out of a sense of human dignity. Hardly the case. Perhaps you should answer, “Would you really accept a few pennies a billionaire threw at your feet?”

        Your next research project might assess how receiving charity actually affects the happiness of its victims.

    • http://juridicalcoherence.blogspot.com/ srdiamond

      The problem with charity is that it’s a drop in the bucket, while at the same time serving as an excuse for do-nothing (or worse) governments.

      Charity allows billionaires to portray themselves as benefactors rather than the bloodsuckers they are.

      • Margin

        “bloodsuckers”

        You really think all billionaires made their money illegitimately?

      • IMASBA

        Can you even make billions legitimately, I mean you can do it legally (according to laws written by rich people who get most of their campaign funding from other rich people), but many of today’s fortunes, all over the world were largely obtained through ways that were illegal just 20 years ago, many others still have hints of illegality attached to them (see the HSBC too big too jail case, or the Swiss banking industry). 

        In the end though no law can hide the fact that if you are a billionaire and you say you made your fortune legitimately you are really saying you contributed thousands of times more to the world than the average working person, which is flat out ridiculous (we’re just so used to our world that we can’t take a step back and see how ridiculous some “normal” things actually are) seeing as most billionaires pushed money around from behind a desk, instead of single handedly inventing the cure to a deadly disease (many years before anyone else was on the same level) or saving the world from an alien invasion. 

        There is no billionaire alive today who contributed thousands of times more to the world than a nurse, a scientist, a fireman or a teacher, this means billionaires trick the world into giving them many times more than they contribute to it, so yes, it does sound hypocritical when a billionaire then turns around and expects people to adore him for giving away a small part of his fortune to people who would never have needed the help if the billionaire had not usurped so many resources in the first place.

      • Margin

        IMASBA:I think we disagree about what “legitimate” means.To me, it means without stealing from people, breaking voluntary contracts, attacking people and so on.Somebody gave them that money voluntarily.

      • http://juridicalcoherence.blogspot.com/ srdiamond

        Illegitimately? Your word, not mine. Bloodsuckers = Parasites. That is, not “job creators” but wealth destroyers. See my “Capitalism and socialism express conflicting reciprocity norms: A reinterpretation of Marx’s theory of capitalist decline” ( http://tinyurl.com/blhdluc )

  • http://twitter.com/JasonKuznicki Jason Kuznicki

    The problem here is scalability.

    GiveWell rates these three very highly in part because each of them has been found to have room to grow. That is, additional dollars will do additional good at a reliable rate for a significant number of future dollars. Some other types of charities just don’t get as much out of each marginal dollar.

    A meta-charity — or worse, several of them — would both diminish the originals’ room to grow, as well as itself having a smaller room to grow. As a result, they would be unlikely to dominate the ratings for very long, if at all.

    • robertwiblin

      This seems like a problem with providing money for GW’s recommended charities directly as well. If their charities are about to exhaust their funding gap, no matter what you do, why bother doing either?

      This may be right, but I think it is unlikely. While AMF has limited ability absorb funds in the short run, there is still plenty of room to spend more money on bed nets around the world, because they depreciate over 1-3 years. Hopefully others will copy AMF’s model in the future as it seems straightforward and scalable. GiveDirectly also seems extremely scalable, though perhaps not right away. This is even more likely if there are more donors.

      Presumably GW could also find some other – albeit less effective -options if these ones exhausted their room for more funding in the near future.

  • Mitchell Porter

    The singucharity is near

    • Chad S Gibert

       No way, it’s far.

  • Jess Riedel

    This is more support for the general idea of breaking up the execution, evaluation, and fund-raising aspects of philanthropy. Laymen could donate to the executors based on the recommendations of the evaluators and spurred on by the fund-raisers.  People who spend more time thinking about this stuff could comfortably give to the evaluators and fund-raisers. If either the fund-raiser or executor becomes inefficient, the evaluators can publicly point this out.

    This would be similar to breaking up government into three branches, which in theory could always collude together to get complete power, but which cannot do so efficiently in practice.  The public nature of the checks increases the difficulty of secret and/or unconscious coordination within the different branches of philanthropy.  (And, unlike government, there can be competition within all three branches.)   This harnesses our signalling desires and forces us to accomplish more actual good in order to appear good.

  • Qiaochu Yuan

    Fundraising doesn’t create money out of nowhere; it diverts money away from other things. 

    • robertwiblin

      I note this, but don’t believe the welfare loss to donors is very large relative to the potential gains to the beneficiaries.

      • Margin

        Questionalbe.

        Hypothesis 1: People are selfish and accept only small welfare losses for altruism.

        Implication: Total donations are easily exhausted; fundraising cannibalizes other charity work.

        Hypothesis 2: People can be convinced by clever fundraising to accept higher welfare losses.

        Implication: The donor’s welfare losses are no longer trivial and not necessarily small relative to the gains.

      • http://juridicalcoherence.blogspot.com/ srdiamond

        Implication: Total donations are easily exhausted; fundraising cannibalizes other charity work.

        Doesn’t Wiblin respond to this argument adequately: “…may ‘crowd out’ gifts to other charities. However, the logic of giving to GiveWell’s top rated charities is that they make (much) 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.” Wiblin seems to be arguing it’s a good thing if GiveWell-approved fundraising cannibalizes the lesser charities.

        (My interest here being purely dialectical.)

      • http://www.facebook.com/people/Adam-Isom/100003587906339 Adam Isom

        The implication to hypothesis 2 is not even bullshit, it’s *obvious* bullshit.

        You’re confusing absolute and relative senses of welfare losses. Just because one has a nontrivial welfare loss does not mean it is not tiny compared to the total gains provided to recipients. Compare losing -1 units, which is trivial, to give what ends up being +1000 units, with losing -10 units–which we’ll say is “nontrivial”–ending up giving +10000 units.

  • sabril

     First someone needs to create a meta-meta-charity which evaluates and ranks organizations like Givewell.  That way, the charity you propose will be better guided.

  • Will

    I’m interested in the closed loop in your picture. A different model for this same sort of activity is a chain, in which seed funds fund fundraising which goes 100% to helping people. Then you could fundraise for your seed funds, but that would be separate. This would have the advantage of avoiding the “looks bad” problem, giving people who do not trust you the confidence that their funds are going to a trusted, vetted charity, while giving those who do trust you the chance to multiply their donations. Probably the loop should stop there – people who trust you to fundraise for more money for Against Malaria in an efficient way should also trust you to fundraise for more money for fundraising.

    • OwenCB

      I also jump to the chain picture, and I definitely want to see a better model for adding extra links.
      The issue is:

      Say our level 0 charities are those which spend their money on direct interventions (e.g. AMF).

      Level 1 charities are those which fundraise for level 0 charities. Level 2 charities fundraise for level 1 charities, and so on.

      Note that these all do okay on the trustworthiness issue, in that donors can see it’s only a finite chain until their money is used on direct interventions.

      If it’s always the case that spending a dollar on a level n charity raises, say, 2 dollars for a level (n-1) charity, then it seems I do best by just choosing the highest n I can think of. Of course in practice it’s probably easier to persuade people to donate to level 0s than level 1s, and level 1s than level 2s, so your ratios are going to decrease. But it’s not at all obvious how fast they should decrease — this is an empirical fact which could be really relevant for what we should do. It may well be that it’s inefficent to spend money to fundraise for anything above a level 0, but I could easily believe otherwise, in which case I’m quite worried that there’s a problem with the model.

      • http://www.facebook.com/people/Adam-Isom/100003587906339 Adam Isom

        But what on earth would be the benefit of a ‘level’ above level 2?

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  • Di

    There is a faint scent of moral ponzi scheme in that thought, depending on how far it is taken. It seems dubious to people that donating to a fundraising NGO is a good idea.

    I know cause I direct one. Never seen the funding come.

    Speaking of which, and taking in sabril’s joke about the Meta-meta-givewell

    Doesn’t is seem to be the case that, Ceteris paribus, one should donate to whichever effective altruist institution has received to this day less funding?

    So Which is it?  LYCS? GWWC? 80000h? GHO? IERFH? (do the swiss guys have an acronym already)?

    • Osuniev

      I’d say on the other hand, it seems to me that you should try to concentrate the donations to the smallest possible amount of charities. http://www.slate.com/articles/arts/everyday_economics/1997/01/giving_your_all.html

  • Robin Hanson

    I’m pretty skeptical that this high multiple applies to most big charities, who already choose to pay specialists to recruit new donors. 

  • VV

    Looks like a pyramid scheme.

  • VV

    You might ask: if fundraising is the best thing to do, why wouldn’t AMF,
    SCI or GiveDirectly just spend the money you give them on fundraising?
    My guess is that it’s simply a bad look. If they spend too much on
    fundraising, it will irrationally scare off their existing and potential
    donors.

    If that’s true then what makes you think that such irrational donors would donate to an organization devoted solely to fundrising?

    Maybe GiveWell’s top charities already do nearly optimal fundrising and your proposed fundrising charity would just dissipate charitable donations on its operational costs, without increasing the amount of money they receive.

  • Khoth

    Charities spending money on fundraising with justifications like “raises more than a dollar with each dollar it receives” is part of why we have inefficient charities in the first place. Charities often do contract out their fundraising to other organisations, frequently with pretty unimpressive results.

  • dmytryl

    Fund-raising may be close enough to saturation so that raising funds for a charity A takes from charity B. Meanwhile, money get diverted into pockets of overpaid rich white men at the advertisement agency.

    It’s difficult to calculate expected utilities correctly.

    Raising education in Africa seems definitely good but it’s value is difficult to calculate; fighting malaria is easy to estimate in proximate-cause saved lives, but alone it could eventually lead to larger number of deaths
    due to starvation. There’s always a multitude of beneficial and adverse scenarios that may or may not happen as consequence of the help in question.

    One scenario, evaluated *perfectly*, is like a drug efficacy estimate based on 1 patient. One scenario evaluated imperfectly is not even that. Worst of all, the distribution of utilities and dis-utilities of unevaluated consequences is not known, and consequently you can’t calculate how much you should scale down due to small sample size.

    • Paul Christiano

      If you have a prior over effect size for drugs, and you regress to the mean appropriately after observing your noisy estimate, then the best of the 1000 drugs is as good as it seems. You don’t need to do further correction for the fact that you tested 1000 things in this setting. The best drug will look particularly good because the best drug *is* particularly good, if you tested 1000 different things from a distribution with significant variance (and if the distribution of real effectivenesses doesn’t have significant variance, you end up regressing all the way to the mean). Am I missing some finer point?

      • dmytryl

        In general, you can’t assume the effects would be statistically independent. You may be testing entirely wrong idea or working on a disease that is particularly hard to beat. I agree it can in principle be done right, assigning reasonable priors to that as well, but just that – in principle.

  • http://juridicalcoherence.blogspot.com/ srdiamond

    Again from a disinterested perspective: The saturation/cannibalization issue seems most deadly. Wiblin suggests that the cannibalization of the inefficient by the efficient would be desirable, which seems no doubt true within his framework; but to suggest that increased fundraising would accrue preferentially to the efficient seems unwarranted. 

    In fact, the underuse of fundraising begs for a better explanation than the (hypothetical) irrational sensibilities of donors. It seems almost obvious that the charities have a tacit agreement in restraint of trade against cutthroat fundraising, precisely because of its being costly when they’re just counter-cannibalizing each other. The fact that charities aren’t supposed to be cutthroat–they’re altruists, after all–would seem likely to lay the basis for anticompetitive practices. (I don’t know whether such practices by charities are even deemed restraints on trade under U.S. antitrust law.)

  • Dan Shaw

    Suppose there is a charity that spends a lot on fundraising, and does so successfully.  If you donate the first dollar, you can tell a story about how your dollar got amplified, and you did more than a dollar’s worth of good.

    However, not all donors can have above-average effectiveness.  There are only so many dollars collected, and so many dollars paid out.  Your extra effectiveness is someone else’s decreased effectiveness.

    In the general case, you’re not donating the first dollar.  You’re donating an incremental dollar to an ongoing operation, so you have to look at the average effectiveness, and the fact is that much of your donation is spent on fundraising, not distributed to the beneficiaries.

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  • http://www.metamed.com/ Alyssa Vance

    A refutation of this post, with several of the points other commenters made:

    http://rationalconspiracy.com/2013/03/08/against-infinite-meta/

    • http://overcomingbias.com RobinHanson

      That is a reasonable critique, though almost entirely theoretical, like my reasons for skepticism. Would be nice to also see a more empirical critique.

      • VV

        Wiblin proposed a business model that doesn’t appear to be viable for theoretical reasons.

        Furthermore, if this business model was viable, why isn’t anybody implementing it already? It doesn’t require any especially deep insight and it’s not based on any new technology.

        I’d say that the burden of empirical evidence of the viability of this business model rests on Wiblin.

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