The Best News You’ll Hear All Year

The folks at Charity Navigator get a lot of heat from people who care about charity evaluation. Their approach, up till now, has been mostly of the lamentable fundraising is evil variety.

Despite the fact that the comparison they’ve been making between organisations was only loosely correlated to the effectiveness of the organisation (1), they’ve become one of the most influential forces in charity comparison. According to them, they get almost 3.3mn unique visitors every year.

You can’t beat a good idea

Image courtesy of freedigitalphotos.net

Things are about to change. Charity Navigator is taking an aggressive step in the direction of results based charity evaluation. They’re building their capacity, with help from the Hewlett Foundation, to evaluate the results of all the charities they collect information on.

Even better, once the results rating is live they plan to make it the most significant factor in their evaluations.

It’s going to be tough

They’ve got a pretty innovative approach. While GiveWell focuses resources on the most promising leads, Charity Navigator seems to want to cover all the charities it looks at. That is potentially wasteful, but maybe they’re betting that their comprehensiveness will give them some extra credibility as well as reach.

They’re planning to base part of their impact assessment on the quantity of feedback the charities get from their beneficiaries. Part will come from teams of trained volunteer charity evaluators, crowd-sourced from universities across the US. And part will come from the professionals – they’re going to incorporate GiveWell and Philanthropedia rankings. (Philanthropedia effectively polls informed individuals about the top charities in a sector).

Why it will be good

More than 3m people make their charitable decisions at least in part based on Charity Navigator’s advice. These people are interested in effective giving, but they’ve been given fairly incomplete advice so far.

While the new ranking system will not be perfect, it will be a huge step in the right direction.
1. The rankings will be better correlated with cost-effectiveness than the old ones.
2. By applying a similar methodology to thousands of charities at the same time, we’ll learn a lot about charity comparison.
3. The ranking system will incentivise charities to get engagement and feedback from beneficiaries.
4. The rankings will expose millions of people to the idea of results-based charity evaluation.
5. The volunteer charity evaluators will learn a lot about giving intelligently.

That can only be good for charity.

Why it probably won’t beat GiveWell

GiveWell’s approach differs from Charity Navigator’s in several key ways. GiveWell, quite rightly, doesn’t feel the need to evaluate every possible lead. They focus on the most promising ones and make sure they explore them thoroughly. That lets them treat charities with a level of nuance that will be very hard to compete with. Even after Charity Navigator turns results-based it may still not have the level of analysis GiveWell boasts.

But, more than that, Charity Navigator has been committed so far to some ideas about overhead costs that are unhelpful. Charity Navigator says that “charities exist to provide programmes and services” and therefore they should spend most of their money on the programmes themselves, and not on overhead. But charities don’t exist to provide programmes and services – charities exist to produce results through programmes and services. Some things in life are about the journey, not the destination. But, in a world of urgent human suffering, charity is not one of those things. When good management and effective fundraising are the best ways to make people’s lives better, then I expect the charities I fund to make use of them.

Why I hope it does

The stakes in this game are way too big to leave in one organisation’s hands. The value of information in charity comparison is staggering – making this stuff a common topic of conversation could plausibly lead to the near eradication of global poverty in a few decades. GiveWell has revolutionised the way we do and think about charity comparison. I’m curious to see how far that change can spread.

(1)They’ve been using some measures of financial strength, and more recently accountability and transparency. These are correlated with effectiveness, but not strongly.