Grappling with How to Give Well

I'm sorry I've been so quiet in the last month. One reason: I was on vacation for a week and a half. I spent most of that at Pinewoods Dance Camp near Cape Cod. It is a place of such effervescent beauty in my heart that I can hardly convey it. My family went there for a week each summer in 1976--80---for me, ages 8 to 12. There beneath the trees and between the lakes, I imbibed English and American folk dance traditions. When my girlfriend (now wife) and I graduated from college in 1990, we leveraged our fancy degrees into summer jobs in the Pinewoods kitchen. She chopped vegetables and I washed dishes. We had not been back since. Last week, we returned with our own 8- and 11-year-old boys; my father, step-mother, and three step-nieces; and a surprisingly large circle of people who remember me from 35 years ago. It was a week for forgetting the burdens of real life, embracing one's musical side, and savoring the wistful happiness of the cycle of the generations.I'll try to catch up on my blogging queue now.Here's an intriguing dialog between two thoughtful people over the tough question of how to decide how to place one's charitable contributions. The superficial subject is whether to contribute to Freedom from Hunger, a U.S.-based microfinance group that specializes in bundling non-financial services along with credit and/or savings. The deep question is what constitute valid algorithms and evidence in deciding how to donate money.On GiveWell's blog, Eric Friedman tells the story of how he tried to search for charities rigorously, eventually picked FfH, and gave it more than $75,000:

By 2006, I came to realize that there wasn’t much high-quality information on which nonprofits performed best, so if I wanted to give, I’d have to make do without it. Inaction was unacceptable, so I developed a plan. I started with the American Institute of Philanthropy, which rates organizations on financial efficiency metrics such as percentage of costs that go towards fundraising and overhead. This provided a starting point to identify organizations that might be good, then I reviewed their websites to pick three that I liked. I knew that this was not a particularly rigorous screen, but it was the best I knew how to do at the time. In 2006, I gave $2,500 to CARE, $2,500 to Africare, and $1,000 to Freedom from Hunger.I figured that donations of this size might draw enough attention to have a serious discussion with their staff. I spoke with each organization, but was unsatisfied with all of the conversations. Whenever I asked them about how to provide the most help for people or evaluate them against other organizations, their responses were inadequate. They were filled with anecdotes about individuals they’ve helped and inspirational stories, but not much information that would genuinely help answer my questions. I was quite surprised when some of them actually asked what I liked most among their set of programs (e.g. education, clean water, healthcare, emergency relief, etc). Weren’t they supposed to be more knowledgeable than me about which of these is most effective?I asked if other donors asked these types of questions, and they said that it was rare. I asked if big, sophisticated foundations ask these types of questions. They didn’t either. I found that to be exceptionally odd....I also spoke with a couple of philanthropy consultants, who I expected to be better at evaluating organizations and selecting priorities. I was disappointed. Usually they would turn the question on me and ask what types of programs and organizations interested me....A turning point happened a few weeks later. My contact at Freedom from Hunger called me to see if I wanted to meet their CEO, who was going to be in my hometown for a conference. We had a great discussion for about an hour and a half in a hotel lobby, and it became clear to me that he understood what I was trying to do and thought about many of the same issues when running Freedom from Hunger. While I still didn’t know how to evaluate the quality of programs at different organizations, I found one that had shared many aspects of my philosophy....Based on the information I had at the time, there was no organization I believed in more than Freedom from Hunger.

But then Friedman discovered GiveWell. He had reservations about GiveWell's merciless (if that's the word) demand for proof of impact, but he decided to rely on its guidance nevertheless:

Eventually, we decided that there was one fundamental principle we should apply: giving was primarily about helping the less fortunate, not our friendships or personal interests. Breaking up with Freedom from Hunger would be hard. I explained our reasoning and they took it in stride, demonstrating that they care more about the less fortunate than their own institutional growth. They are a good group. But in 2010, we gave about $31,000 to GiveWell’s donor advised fund to ultimately be distributed as they recommended.

In reply, Chris Dunford, the longtime president of Freedom from Hunger---and probably the only head of a microfinance network group trained in research---gracefully accepted Friedman's decision while arguing that GiveWell's logic has a significant weakness:

GiveWell’s system overweights the one dimension of impact and seems to ignore two other key dimensions---scale and sustainability. The Cadillac programs in international development typically are small in scale of outreach to intended beneficiaries, because they are expensive. There is a trade-off between the high cost of proving and constantly assuring impact (though I believe this is crucial and therefore applaud GiveWell’s attention to this dimension) and the abilty of organizations to reduce their costs per person served in order to reach large numbers of people in need. Moreover, this trade-off is even more pronounced if the organization is trying to sustain its outreach over years or decades without endless dependence on philanthropic subsidy. I would argue that Freedom from Hunger does not qualify for better than “notable” rating by GiveWell, because we are trying to support a variety of local organizations to pursue a multi-dimensional balance between assurance of impact, scale of outreach and sustainability of operations over long periods of time. Being “notable” in each of these dimensions would be high praise indeed.

There is some resonance here with my "development as industry building" theme, the idea that one kind of success in development ventures is building dynamic, scalable organizations that enrich the economic fabric of which they are a part. Although such success is closer to the heart of economic development, in my view, it is harder to prove that any particular instance improves the lives of the poor. In the face of so much fluffy promotion in the world of philanthropy, I think GiveWell's almost myopic focus on full proof of the chain of causation is healthy. But having thought hard about one area, microfinance, I'm ready to give based on a broader conception of success.