What is this career path?
This career path involves attempting to found non-profits that contribute to the cause of ending global poverty through international aid, and that implement evidence-backed, cost-effective programs, with a high level of transparency and monitoring. This will initially involve aiming to build up expertise, as well as finding an idea and a founding team, before ultimately raising funds and attempting to grow the organization.
For more, see GiveWell’s list of criteria.
Potential for impact
Sometimes, evidence-backed interventions are discovered within the field of international development before there is a non-profit focused on implementing them. A current example where gaps still exist is micronutrient fortification.
Moreover, there are several large foundations which want to fund non-profits which can efficiently implement such interventions, including GiveWell, CIFF and the Gates Foundation. But GiveWell claims that it’s hard to identify people able to run such programs, particularly people able to solve on-the-ground logistical issues.
This suggests there’s an opportunity for a team with the necessary skills to create and scale up such a non-profit relatively quickly, which would have a substantial impact. For instance, GiveWell reviewed Against Malaria Foundation (AMF) in 2009. By 2013 it had caused AMF to gain over $10 million in donations, and it will likely reach over $50 million in 2017. $10 million is enough to pay for about two million malaria nets, which are expected to save several thousand lives – and AMF only has two staff members.
Moreover, these kinds of non-profits often serve as pilots for larger programs, implemented by governments, and so can help to accelerate a larger scale-up.
Charity Entrepreneurship founded Charity Science Health, which has also received a grant from GiveWell.
For more information, see:
- GiveWell’s list of the charities they’d be most excited to fund.
- An analysis of the cost-effectiveness of founding a new GiveWell-recommended charity.
- Charity Entrepreneurship’s intervention reviews.
We’re not sure how easy it is for an individual to target these opportunities. Often they are taken by experts who happened to be in the right place (although AMF is an exception). If you’re not already one of these experts, it may be hard to get yourself to the forefront of the field before the opportunity is gone. However, we suspect it’s still possible to work in generally promising areas, and to build the right sort of network and skills, in order to substantially raise your chances of being able to found an effective non-profit in the future.
Charity Entrepreneurship’s success so far is encouraging, since the founders are young and don’t have a background in development.
This is not a path you take for the earnings – many non-profits rely heavily on volunteers. The median salary for a non-profit CEO in the US is probably in the range of $50-$80,000 per year (perhaps slightly larger after including bonuses and insurance).1 However, the median is lower than the mean due to a large number of small charities. For non-profits with a budget of several million dollars, typical compensation is $100,000-$130,000 per year.2
Being the founder of a non-profit can provide many networking opportunities because it allows you to speak for the organization – there are many opportunities for founders to attend conferences and generally get access to interesting people. To run the non-profit, you’ll also need to work with other organizations, funders and supporters, who will contribute to your network. Finally, you can use the non-profit itself as a vehicle for advocacy by using it as a model for others. For instance, GiveWell have helped to encourage greater transparency by being extremely transparent themselves.
Founding a new project is highly demanding and it’s generally clear whether you’re succeeding, so it will force you to learn new skills and develop as a person. In particular, you’ll learn a package of very useful transferable skills, such as fundraising, strategy and management. And you’ll learn how to apply these independently, which is a sought after combination.
As mentioned in the ‘advocacy’ section, being a founder is great for building connections. Launching a new project is also very impressive on your CV. So, overall we think this is an excellent option for career capital.
We think this is a high-variance path, in that most non-profits fail or stay small, while a small number have a big impact. It could be valuable, therefore, to embark on this path in order to learn more about your degree of personal fit.
Working to found a non-profit will also help you to learn a huge amount about the relevant cause area, and other opportunities within the cause.
You can enter this path whenever you have a sufficiently good idea and enough credibility to attract funding. In practice, founders have often first accumulated substantial expertise in relevant areas. For instance, the founders of GiveDirectly met while studying postgraduate degrees in economics and the founder of SCI is a Professor of Tropical Parasitology. Rob Mather, the founder of Against Malaria Foundation, had a successful background in business, giving him a network, sales skills and enough financial capital to initially self-fund. Alternatively, getting a job at Evidence Action generally requires an advanced degree and several years of experience doing project management in a related area.
So, we expect that in order to have a good shot at launching a project, good preparation would be:
- A Master’s or PhD in a relevant area.
- Several years’ experience of project management, including some ‘on the ground’ experience (or other experience that builds entrepreneurial skills).
- It may also be useful to do something like consulting in order to build some savings and a network of potential funders. Consulting could also be a useful bridge job between university and a project management position.
During this time, you could hope to identify some promising ideas and potential co-founders. For more see our interview with effective non-profit leaders on how to enter the sector.
However, note that the barriers to entry might be coming down. The amount of money available for these opportunities has risen dramatically in the last couple of years. Charity Entrepreneurship’s success so far could be evidence of this.
What does it take to succeed?
Successful non-profit entrepreneurs are well-rounded, very intelligent, motivated and have a deep expertise in their program area. Like for-profit entrepreneurs, we suspect they have a bit of a ‘break the rules’ independent attitude.
In some ways, non-profit entrepreneurship is even harder than for-profit entrepreneurship, because your business model will be more complex (fundraising and program implementation are separate, and it’s difficult to measure success) and there is less money available. So, we think this is a highly challenging path.
The work is potentially highly satisfying, since you can make a big difference, while doing varied, high-status and challenging work. On the other hand, you’ll need to put in long hours and face a high risk of failure. If you can accept this stress, then we think it can be a very rewarding path.
GiveWell are also happy to speak to non-profits who might one day satisfy their criteria.
- Interviews with effective non-profit leaders
- GiveWell’s charities we’d like to see.
- See all our resources on non-profit entrepreneurship
- Charity Entrepreneurship’s intervention reviews.
Notes and references
- The 2012 Watkins Uiberal Report found that (LINK): The median salary for executive directors/CEOs is between $50,000 and $75,000. CEO salaries correlate with organizational budget size. For small organizations, the median salary is between $30,000 and $50,000. Among medium-sized organizations, 36% of CEOs have salaries between $50,000 and $75,000, while 50.5% earn more than $75,000 and 13.5% earn less than $50,000. Among large organizations, 14.2% pay salaries of $100,000 or less; 38.1% pay between $101,000 and $150,000; and 47.7% pay more than $150,000. Note that this is significantly lower than the median figures reported by the prominent Charity Navigator Annual Survey. This is because Charity Navigator focuses on “mid to large” US charities, which pay substantially higher salaries. ↩
- For instance, the 2014 NPT Salary and Benefits Report, found that: Operating budget less than $499,999 — Average CEO salary: $60,206; Operating budget from $500,000 to 999,999 — Average CEO salary: $81,991; Operating budget from $1,000,000 to $2,499,999 — Average CEO salary: $103,704; Operating budget from $2,500,000 to $4,999,999 — Average CEO salary: $125,899; Operating budget from 5,000,000 to $9,999,999 — Average CEO salary: $153,858; Operating budget from $10,000,000 to $24,999,999 — Average CEO salary: $184,926; Operating budget from $25,000,000 to $49,999,999 — Average CEO salary: $226,023; Operating budget more than $50,000,000 — Average CEO salary: $317,024. LINK ↩