Donors wants to know which charities make the grade

It’s the giving time of the year. When a combination of the emerging winter and holiday season converge into a moment of fleeting caring in the US. It also happens to be the end of the tax year.

Charities make a significant amount of money during this time. An estimated 18% of all money raised during the year happens in December, that is more than double nearly every other month.

American University student Scott Weathers wants to know that his donations have the greatest impact possible.

The second year student (he shuns the label Sophomore since he plans to graduate in three years) began his philanthropic journey in high school.

His teacher would email leading humanitarians in order to engage his students. One such outreach to Howard G Buffett, son to Warren Buffett and agriculture philanthropist, led to an invite for Weathers and sixteen fellow students to fly out and discuss poverty with Buffett in person.

The experience of charitable giving inspired him to raise money for groups like Partners in Health. It also led to some questions about why he was supporting certain organizations. He wondered whether he was making an informed decision about his giving.

“I want people in high school to give the charity and do it to places that work,” he said.

There is an emerging trend in the business of doing good. Donors are starting to ask whether programs actually work. Charity raters are casting aside using administrative costs to evaluate charities, but donors are asking for more.

Some are going as far as to ask what is the most effective way to give. They want organizations to show that what they are doing is having an actual impact.

“A lot of people are excited about evidence-based giving,” said Michelle Hutchinson, executive director of Giving What We Can.

Giving What We Can brings together young people to create a life-lifelong culture of giving. Starting to think about giving away a certain percentage of one’s income at an early age makes it easier to continue doing so later in life, said Hutchinson.

An important part of the program is to encourage effective altruism. Giving to charities is one thing, but it is important to give in a way that maximizes impact. Doing so means that even the smallest donations can make a difference.

“Rather than using proxy measures like overheads, you want to get at the heart of things,” said Hutchinson. “The most effective charity is one that helps people the most.”

Groups like Giving What We Can, GiveWell and AidGrade are using published research studies to be more effective altruists. Slogging through the thousands of papers and mountains of data points takes time, but it is leading to recommendations that supporters say are best bets for donors.

GiveWell recently released its giving season suggested charities. Only three made the cut: GiveDirectlySchistosomiasis Control Initiative, and the Deworm the World Initiative. All three programs, according to GiveWell, provide sufficient evidence that money donated will have a significant impact on groups targeted.

The movement is succeeding. So much so that GiveWell did not include its top charity, the Against Malaria Foundation (AMF), in the 2013 holiday list because the $10.6 million that it helped raise still needs to be spent. AMF says it has been slow to distribute nets because it wants to avoid theft as much as possible.

Recommendations made by GiveWell are supported by strong evidence showing the impact of cash transfers, anti-malaria bednets and deworming pills. There are numerous studies on other areas that are still being explored, but it takes time to go through every paper.

AidGrade is taking a different approach. Rather than worry about the charities, the team at AidGrade just want to know what the research says and publish it.

A group of mostly volunteers help to find and code studies so that they can be run through a program that will track trends for a given program, like microfinance loans. The final product, called a meta-analysis, is a sort of average outcome for all the studies.

AidGrade operates on a shoestring budget of $100,000, hence its use of volunteers.

“Usually, one meta-analysis costs $75,000,” said founder Eva Vivault, a post-doctoral fellow at NYU. “We have done ten.”

She hopes that the project can address concerns of the external validity of rigorous studies. Critics say that research done on one project, in one place, at one time can only yield information about that exact instance. Supporters say that well designed studies can account for such circumstances and ensure that findings can apply elsewhere.

Taking all the information from different studies around the world on the same subject can help solve this problem.

Volunteers and a system of breaking up the tasks into small chunks allows AidGrade to do its work efficiently. Another ten analyses are already underway, but they need more money to do it. Still, the work takes time.

“We are in a little harder position because people want something quick, hard and actionable,” said Vivalt.

After a successful Kickstarter campaign the group that wants to analyze the business of doing good is trying to raise money of its own through an Indigogo appeal. They’ve managed to raise $26,00o of their $50,000 goal.

Weathers is an active member of Giving What We Can and AidGrade.  Both organizations and Give Well rely on impact evaluations to scrutinize what works. It is a level of skepticism that extends to the very studies they use.

“Impact evaluations are not a solution to development, but are solutions to better giving,” said Weathers.

Questions still remain regarding how much impact some of the largest charities are having on the world’s poor. The movement for more evaluations is slowly raising the bar.

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.