We haven’t done nearly as much empirical research on whether this view is appropriate as we would ideally like to, and in the future we may approach it with a more concerted research effort. For now, we’d point to the following as broad defenses of this view:

• Since the Industrial Revolution, it appears that quality of life has improved in nearly every measurable way. A simple illustration of this idea comes from a brief recent post we made showing broadly rising per-capita income and falling infant mortality in the developing world. A more thorough discussion is available in chapter 2 of From Poverty to Prosperity by Arnold Kling and Nick Schultz, from which we’ve excerpted the key tables. (Note that this chapter isn’t our “primary source” for this claim; we have picked up various perspectives on this question from GapMinder, general discussions, etc. and point to this chapter merely as a relatively accessible summary.) The Better Angels of Our Nature, a relatively recent book by Steven Pinker, provides a deeper and narrower investigation of the effect of these changes on violence.
• The developed world appears to be better off than the developing world on nearly every metric we can think of, such as life expectancy and reported happiness, nutritional status (particularly for children), civil rights and human rights, and education (including for women and girls in particular).
• In the past, there have been many concerns about new technology making the world worse in some way, but these generally don’t seem to have panned out. For example, sulfur dioxide emissions, which cause acid rain, spiked during the mid 20th century in the U.S. but now are at much lower levels, along with most other pollutants in the U.S. Persistent worries about the mass unemployment effects of automation also appear not to have panned out, though they continue to be raised.

  We don’t believe that avoidance of modernity-related problems can be taken for granted. In many cases it may take place because of concerted efforts to improve regulation and societal norms, and such concerted efforts may be needed to deal with various issues today. However, we also think it’s worth noting that concerted efforts to make the world a broadly better place seem to have become more common and more viable as economic development has progressed. Environmentalism, multiple civil rights movements, and large-scale foreign aid are examples of positive social changes that have emerged in the last two centuries and appear stronger in the developed world than in the developing world today. We’d guess that increased wealth and improved technology often improves people’s ability to coordinate around, and concentrate on, movements whose effects go beyond their personal lives.

• One of the most compelling cases for a way in which development and technology can cause harm revolves around “global catastrophic risks” such as climate change and nuclear war. However, from where we sit today, improved technology and economic development seem at least as likely to play a major role in mitigating these risks (via e.g. cleaner energy sources and more efficient overall economic activity to mitigate climate change, and greater economic interdependence and more effective security to mitigate military threats) as to worsen them. We will write further on this point in the future. It may be true that we would be safer from global catastrophic risks if we had never had any economic/technological development, but a faster rate seems safer than a slower rate from here.

We wish to note that we do not embrace the explanations for improvement sometimes associated with observations such as the ones above, explanations that often focus on the role of free markets to the exclusion of other institutions. We believe much of the improvement we describe may be attributable to the actions of governments, activist movements, and voluntary altruism (including philanthropy) as well as economic exchange. We believe that the exact dynamics by which the world has improved aren’t fully clear. My own take is that the concept of broad market efficiency is important here: as people become wealthier, better informed about each others’ activities, and generally gain more abilities and options, they become more empowered and motivated to tackle problems that they previously wouldn’t have been able to work on (or would have viewed as less pressing than other problems). To give a simple example, whatever good GiveWell does will be creditable partly to the huge number of other world improvements that have (a) given us the wealth and security to start a new venture; (b) given us education and tools to do our investigations; (c) addressed other problems that might have occupied our attention instead; (d) produced technology to run our lives and organization efficiently and find our audience (who themselves have similarly benefited).

If our overall view on this topic is broadly correct, it has some important implications.

First, it implies that a substantial part of the good that one does may be indirect: the people that one helps directly (by e.g. funding distribution of bednets) become more empowered to contribute to society, and this in turn may empower others, etc. If one believes that, on average, people tend to accomplish good when they become more empowered, it’s conceivable that the indirect benefits of one’s giving swamp the first-order effects.

If true, this is yet another source of noise (beyond the many we’ve identified) in formal cost-effectiveness estimates, and another reason not to take these estimates literally. It also implies that helping people who are well-positioned to contribute to society and/or help others is particularly valuable, relative to e.g. simple reduction of suffering for people who are not well-positioned to help others.

Second, it implies that helping to address any problem is a possible path to addressing many other problems. For example, if one’s only goal is to improve women’s education, it’s conceivable that the best option for doing so is to fund distribution of bednets (and if one’s only goal is malaria control, it’s conceivable that the best option is to fund women’s education).

Thus, even if one is convinced that a particular issue is the “most important” one to work on, this doesn’t by itself establish that one should directly fund or work directly on this issue. The nature of one’s practical opportunities matters greatly. If issue X appears to be of paramount importance, but issue Y has far more appealing giving opportunities for reasons related to room for more funding, one should consider donating toward issue Y.

Of course, a strong project aimed at the “right” problem is likely to have more impact than a strong project aimed at the “wrong” problem, but this isn’t always the choice that a donor faces (particularly a low-information individual donor). The details of what opportunities one has on each front are crucial.

So far, GiveWell has focused on the “easiest” interventions to have confidence in, figuring that being confident of accomplishing some substantial good is better than giving in an uninformed way, even if the latter is aiming at a cause that seems more important than global health. Going forward, we expect to be able to assess other ways of giving, from funding political advocacy to funding scientific research. But we expect to continue to put a substantial weight not just on the importance of an issue but on its tractability and its room for more funding.

The table and chart below present basic information about our growth in money moved and web traffic in the first quarter of 2013 (note 1).

Growth is at a slower pace than in 2012 (note 2). This may largely be a function of the fact that we are now growing from a larger base from which we can no longer expect percentage increases of the scale we’ve had in the past. Another possibility is that we’re reaching a “saturation point” and growth will now slow significantly. Our arithmetic growth has slowed slightly over the past year, though it is roughly consistent with what it was at this point last year; this is especially true when we consider changes in our ability to measure donations each year.

We believe that some of the apparent slowing in money moved growth is due to better measurement in 2012 than in either 2011 or 2013. We are able to most completely and quickly track donations that (a) go to GiveWell for the support of our top charities; or (b) go directly to AMF (AMF asks donors at the time of donation whether they gave due to GiveWell and immediately makes that information available to us). In early 2011, the majority of donations went directly to VillageReach. In early 2012, the majority of donations went to AMF and to GiveWell for the support of SCI; we were able to track all of these donations when they were given. In early 2013, we had a third charity, GiveDirectly, receiving (we believe) a significant portion of donations directly.

A caveat to all of the above is that this is based solely on small donors. While in the past we’ve seen that growth in small donors earlier in the year provides an indication of overall growth at the end of the year, because a significant proportion of our money moved comes from a relatively small set of large donors, we don’t place significant weight on this projection.

Website traffic tends to peak in December of each year (circled in the chart below). Growth in web traffic has generally remained strong in 2013.

Note 1: Since our 2012 annual metrics report we have shifted to a reporting year that starts on February 1, rather than January 1, in order to better capture year-on-year growth in the peak giving months of December and January. Therefore metrics for the first quarter of 2013 reported below are for February through April.

The funder is now holding another contest with a similar aim to the previous one: to “identify and support one new great idea” that “can improve the lives of the world’s most disadvantaged people.”

We’ve played with the idea of a similar contest ourselves, with the hope of unearthing giving opportunities that fall outside “traditional” causes. To date we haven’t felt that holding such a contest would be the best use of our capacity, but we’d like to do what we can to support such a contest when another organization is holding it. Therefore, we’re publicizing this contest via our blog.

If you have – or know someone who has – an extraordinary and unorthodox idea for improving the lives of the world’s most disadvantaged people, please consider submitting it to the Extraordinary and Unorthodox Prize (and contacting us with it as well).

Not all opportunities to accomplish good are opportunities to make money. Yet I believe that it’s useful to use a similar concept in the world of philanthropy – to speak of a “broad market” in which people are rewarded (though not always financially) for accomplishing good, and in which we therefore have some reason to expect that (a) the “easiest” opportunities for accomplishing good will get funded and carried out without our help; (b) finding opportunities to do good that aren’t already funded will be challenging.

The question of how efficient the broad market is (and how its efficiency varies from domain to domain) seems to me like a crucial one, and it is a question that we are constantly debating and looking for new information on. It’s equivalent to the question of how effective the world as it exists today is at “scooping up opportunities to do good,” and thus how difficult we should expect it to be to find outstanding such opportunities. When we started GiveWell, the seemingly low quality of dialogue around giving led me to expect extremely low efficiency; over the years, I’ve substantially (though not overwhelmingly) raised our estimate of how much “efficiency” already exists.

The remainder of this post will:

• Discuss why I’ve raised my estimate of “broad market efficiency” and what my current working view is.
• Elaborate on why one’s estimate of “broad market efficiency” is important.

First, a point of clarification. I generally view “market efficiency” as a spectrum: the more efficient a particular market is, the higher the level of intensity and intelligence around finding good opportunities, and therefore the more intelligent and dedicated one will need to be in order to consistently “beat the market.” The most efficient markets can be consistently beaten only by the most talented/dedicated players, while the least efficient ones can be beaten with fairly little in the way of talent and dedication. This way of discussing market efficiency contrasts with the “Are markets efficient, yes or no?” approach that some others take to the question.

When we started GiveWell, my basic picture of the world was that

• For-profit markets are relatively efficient. Therefore, if there’s an opportunity to do good that’s also an opportunity to make money, it’s very likely that someone will seize on this opportunity relatively quickly.
• Nonprofits accomplish good as well, but in the nonprofit world, funding almost exclusively chases “good stories” rather than good ideas. Therefore, there ought to be many opportunities to accomplish enormous amounts of good via nonprofit activities with a strong analytical case but no competitively compelling emotional pitch.

I still hold both these views to a degree, but several observations have complicated the picture for me.

• As we recently wrote, it appears that the most proven cost-effective interventions are often able to attract funding from major funders. While I do believe we’ve found some places in which more money is needed to deliver more proven cost-effective interventions, doing so has been far more difficult than I expected.

  And while I believe there exist good opportunities to fund more research and strengthen health systems (which could lead to more opportunities to fund delivery of proven cost-effective interventions), I also have not seen a large amount of obvious low-hanging fruit (outstanding, unfunded giving opportunities) in these areas. In particular, many of the interventions whose effects are easiest to study are the ones that have already been fairly well studied; to create good research on other interventions could be much more difficult. I believe there are exceptions to this pattern, but that it does hold as a general pattern.

• In 2012, we developed an interest in meta-research that grew out of our experiences reviewing evidence, and we noted at the time that we couldn’t identify any major foundations working in this area (based on our review of major foundations). We saw this as a promising but potentially ignored area. However, the more we investigated it and got involved in it, the more we saw that there are already many movements afoot that can be categorized as “meta-research” – and several major funders that are interested specifically in this area. Furthermore, it often appears to be the case that “meta-research projects” get funded by funders who don’t explicitly focus on “meta-research,” but instead focus on the field in question. (A future update will give more details on this.)

  The other funders focused on meta-research are roughly as new to the area as we are; we have uncovered some ideas that may qualify as “promising and un-funded”; and I still have the intuition that this is an extremely promising and under-resourced area. But it’s instructive that our best guess for a “promising but ignored” area turned out to have a non-negligible amount of interest from funders, once we looked more closely.

• We’ve also seen various “global catastrophic risks” highlighted to us as causes that are highly likely to be neglected, because the scenarios in question are highly “farfetched” and low-probability, and philanthropic investments are unlikely to pay off in any tangible way. Thus, it seems that funding these causes might require a highly analytical and genuinely altruistic bent. We’ve done some light investigation of global catastrophic risks, and have found some substantial activity on some of the more “farfetched” ones. For example, on asteroid impacts, tens of millions of dollars are being spent on asteroid detection and the expected lives lost due to such impacts has reached a fairly low level. On threats from epidemics, bioterrorism and other biological threats, the Alfred P. Sloan Foundation ran a program (archived link) for several years in this area, and reports having closed the program after seeing substantial increases in government funding (as a side note, we don’t find its causal attribution compelling):
  “Sloan’s Biosecurity Program has been very successful in bringing attention to the issues and challenges posed by biological threats. When our program began in 2000, the US government funding for strictly biodefense was approximately $50 million. The FY2010 budget is $1.09 billion.”

• We’ve generally struggled to find proposals for projects that are fully fleshed out and immediately compelling, yet un-funded. We believe this is largely because of the dynamics of the philanthropic sector in which proposals tend to be written only after there is strong interest from a funder, but in a less efficient “broad market” we’d have expected to find some strong, exhaustively argued yet un-funded proposals by now.
• In general, in interacting with major foundations (such as the Bill and Melinda Gates Foundation, Hewlett Foundation, CIFF and Open Society Foundations), we’ve encountered many program officers whom we perceive as well-informed, genuinely altruistic, and relatively analytical in their approach. It’s difficult to evaluate the quality of these people’s work, but they certainly don’t fit the stereotype of the “story-oriented donor.”

In general, it seems nearly impossible to find a promising area or idea that is completely ignored (though many may be underfunded relative to other areas and ideas).

It seems to me that there is a real sense in which people are “rewarded” nonfinancially for working on something with high altruistic value – whether through recognition from others, through pride in doing well at the job they’ve been hired for, or of course through altruism – as well as a real sense in which people are drawn toward areas that they perceive as neglected (foundation staff have cited the latter factor to us in many discussions). Even without any particular person taking a bird’s-eye view of the philanthropic world and making analytical, strategic calculations to find the most under-explored causes, an ecosystem with a large number of people who have various drives toward altruism and toward working on what’s neglected can be expected to produce some degree of “broad market efficiency” – a tendency to find and execute on the most outstanding and neglected ideas.

I am not saying that “all the good giving opportunities are taken” or that “philanthropic capital is allocated as well as it could be” – I very much don’t believe that. I believe that a great deal of giving is done with very little thought and goes to causes that are far inferior to the best ones out there; I believe that strategic cause selection is itself a neglected approach, and that it will lead to far more impact than we could achieve otherwise. Even if (as isn’t necessarily the case) the best $10 million worth of funding opportunities for a given cause are already funded, funding the next $10 million down in the most promising causes (as opposed to causes chosen with little reflection) could have enormous value. In addition, I believe that looking at existing giving opportunities doesn’t tell you the full story about a cause’s potential (as discussed previously), and raising the profile of the more important causes could generate outstanding giving opportunities that haven’t yet been surfaced.

What I no longer believe is that there’s any easy way to tell which areas are under-funded. All it takes is one or two idiosyncratic major funders to turn a cause area from under-funded to over-funded or appropriately funded. Thus, the mere fact that a cause is “wonky” (strong from an analytical perspective, but not from a storytelling perspective) or “wacky” (controversial, farfetched or otherwise unappealing to conventionally minded people) doesn’t guarantee that it will be neglected. When it comes to assessing what areas are neglected, there’s no substitute for doing the legwork of figuring out who’s working on them.

In theory, it would be ideal to examine all possible giving opportunities and compare the “expected good accomplished” for each. In practice, it’s important to have good rules for prioritizing which areas and projects to investigate further. And having a view on “broad market efficiency” is important for such prioritization. Our view on “broad market efficiency” affects (a) how easy we expect it to be to find good giving opportunities in a given cause (and thus how much effort we expect to put in before having a good idea of what’s available); (b) what sort of claims about giving opportunities we consider highly plausible vs. which will immediately raise our skepticism that a piece of the picture is missing; (c) what sorts of giving opportunities are outstanding enough, in the scheme of things, for us to prioritize them.

If we expected extremely minimal “broad market efficiency,” we might be looking for projects that fit just about all the criteria one could ask for – strong track record, strong upside, strong people, etc. – and we’d deprioritize causes in which these projects didn’t quickly emerge. If we expected extremely strong “broad market efficiency,” we might place high emphasis on our personal interests and experiences, reasoning that these would be the areas in which we’d be most likely to “beat the market.” Our current view is in between the two extremes. Our intuition is that some causes are extremely under-funded relative to others, and we expect strategic cause selection to have major payoffs. (Note that while we have raised our estimate of “broad market efficiency” we’ve also become more confident that strategic cause selection is extremely rare, perhaps even nonexistent, in the philanthropic world.) On the other hand, we expect exploring a given cause to take a good deal of legwork and learning, and we’re inherently suspicious of projects that look “too good to be true.”

Another reason one’s view of “broad market efficiency” matters is it represents one mechanism for what I sometimes term the “fungibility of good” – the idea that making progress on one problem often leads to progress on other problems. For example, reducing the burden of malaria may make it more likely (depending on the degree of broad market efficiency) that other philanthropists shift from addressing malaria to addressing other problems. Thus, even if cause X is more important than cause Y, making progress on cause Y may cause other philanthropists to reallocate their giving away from cause Y and toward cause X, and may thus have some value for cause X.

The “fungibility of good” is one possible contributor to “regression to the mean” in philanthropic opportunities, and one possible justification for placing weight on tractability (what one can accomplish within a cause) and not just importance (the value of progress on a cause).

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We’ve put substantial time into each of the following:

• Partnering with Good Ventures on “co-funding” with major foundations. Good Ventures has spoken with multiple major foundations (some conversations off the record, some on the record), asking for recommendations for particularly strong projects that Good Ventures might join in funding. It has committed $1 million to a project with the Gates Foundation and is in the process of considering other possible projects. We have sat in on most of the relevant conversations, advised Good Ventures, and published notes when possible to our website. We had hoped this experience would give us an opportunity to “learn from the pros” – to understand how established foundations go about sourcing and evaluating giving opportunities. To some extent, it has; for example, we’ve learned about the importance and pervasiveness of active funding among major foundations, and we’ve gotten a sense for what program officers do to find giving opportunities (it seems that the most common core activity is networking intensively with people in the field, while emphasizing their own strategic priorities). At the same time, we’ve found the giving opportunities themselves difficult to evaluate, both before and after execution. As discussed previously, the information that is easily available is often not in-depth enough for us to gain high confidence regarding the merit of the project without substantial further investigation (the case for these gifts relies largely on the fact that the partner foundation finds them worthwhile, as well as the learning opportunities they present to us).
• Top-level investigation of the history and current state of philanthropy. We wrote about our understanding of philanthropy’s success stories, and collected data on philanthropy’s current funding allocations. Since then, we’ve continued to look for more information about the history of philanthropy – we think it’s important to understand what the major success stories have been and how they came about – but we have found little. We are now exploring the possibility of recommending funding to produce more such history.
• Meta-research. Last year we expressed an interest in meta-research, or “improving the incentives in the academic world, to bring them more in line with producing work of maximal benefit to society.” We ended up spending much of our GiveWell-Labs-related time on this cause because we not only found it promising (and had significant starting context on it due to our direct experiences as consumers of research), but also found it to be a fairly nascent field. Thus, we had opportunities to explore opportunities and participate in meetings that would have been difficult with our level of experience in other areas.
  • We were originally interested in meta-research for the field of development economics, the field most directly relevant to our work. We joined a major funder in having preliminary exploratory conversations with relevant researchers (some were off the record, but some have notes posted to the “social sciences” section of this link) and I attended an April 2012 meeting at the William and Flora Hewlett Foundation regarding preregistration.
  • We recommended a quick grant to the U.S. Cochrane Center, and in the process of investigating it we turned up some evidence that medical meta-research is a promising (largely because neglected) area. We are now finishing a more thorough investigation of that cause.
  • We also put a small amount of time into exploring the idea of meta-research for the “harder” sciences (biology, computer science, etc.) We advised a volunteer, Paul Christiano, who has had multiple conversations (notes forthcoming) in the field of computer science, and I attended the first meeting (notes) of Vannevar, a group started by Dario Amodei to explore ways to make scientific research more efficient, collaborative and productive. Dario and I also had a preliminary conversation about the world of biomedical research.
• We advised Good Ventures on its investigation of the cause of drug policy reform, seeing it as an opportunity to start learning about politics without a major commitment. Two consultants were retained to look into this area, and we aim to publish a public version of their report in the next month. I’ve also had many informal conversations about the world of political advocacy, and am starting to form a plan for understanding it better.

Our major takeaways to date from these investigations:

• Due partly to the potential importance of active funding, it appears helpful to think of a “cause” or “sector” – rather than a “project” – as the most relevant unit of inquiry. We now plan on investigating a large number of potentially promising causes at very low depth, and investigating a smaller number at a higher level of depth.
• Most of philanthropy seems to use some combination of (a) direct service delivery; (b) funding of research; (c) political advocacy. We feel that we have done substantial research on, and attained substantial understanding of, (a), while we understand very little about how (b) and (c) work in general. It is a priority for us to learn more, generally, about how the world of scientific research works (which involves understanding the incentives and evaluation mechanisms for academics) and about how the world of political advocacy works (which involves understanding the basic tools that are used in advocacy and how one might expect their effectiveness to vary with different issues).
• It is very difficult to get a sense of what has worked, and failed, in philanthropy’s past. Our value of transparency is hopefully a step in the right direction for the future, but for our own learning we may find it necessary to do substantially more investigation of history.

Accordingly, for the next few months we expect to prioritize the activities of

• Investigating a relatively large number of causes at relatively low depth, and investigating a smaller number at high depth. (We are currently finishing a higher-depth investigation of medical meta-research.)
• Forming plans for improving our general understanding of scientific research and political advocacy.
• Exploring the possibility of funding journalists and/or historians to produce better data on what has worked and failed in philanthropy in the past. (More)

My instinct is generally to try the most “passive” approach that’s feasible. Broadly speaking, it seems that a good partner organization will generally know their field and environment better than we do and therefore be best positioned to design strategy; in addition, I’d expect a project to go better when its implementer has fully bought into the plan as opposed to carrying out what the funder wants. However, (a) this philosophy seems to contrast heavily with how most existing major funders operate; (b) I’ve seen multiple reasons to believe the “active” approach may have more relative merits than we had originally anticipated. This post discusses our observations on this front, and the implications. Note that Good Ventures has played a major role in facilitating and participating in conversations with other major funders, which is where most of our learning on this front comes from.

Brief summary:

• Major funders very frequently take a highly active approach to funding, in some cases going so far as to play a major role in creating partner organizations.
• In the nonprofit world of today, it seems to us that funder interests are major drivers of which ideas that get proposed and fleshed out, and therefore, as a funder, it’s important to express interests rather than trying to be fully “passive.”
• While we still wish to err on the side of being as “passive” as possible, we are recognizing the importance of clearly articulating our values/strategy, and also recognizing that an area can be underfunded even if we can’t easily find shovel-ready funding opportunities in it.

Since we launched GiveWell Labs, we’ve spent a fair amount of time talking to major funders. Unfortunately, in many cases we’ve been able to have these conversations only under condition of confidentiality, but we’ve posted notes from conversations when possible and we can share examples of patterns we’ve observed.

Perhaps the most vivid example of an “active” funder is the Bill and Melinda Gates Foundation, which we also perceive as one of the most generally impressive foundations we’ve interacted with.

• The Gates Foundation has been integral in the creation of many of the organizations it has made major grants to, such as GAVI (which has received several of its largest grants), Alliance for a Green Revolution in Africa, Innovative Vector Control Consortium, Foundation for Innovative New Diagnostics, and PATH Malaria Vaccine Initiative.
• On polio eradication, it describes itself as providing “technical and financial” (not just financial) resources.
• In a conversation with Cynthia Lewis of the Gates Foundation’s Tobacco Initiative, Cynthia emphasized that much of the Foundation’s work is “hands-on,” and also stressed that when going into a new area it may be necessary for a grantmaker to “create” the partner organizations it needs to fulfill specific objectives. When we asked her how one might go about this, she gave an example of an anti-tobacco organization whose team had been largely recruited by a program officer at another foundation. (At the same time, she characterized much of her own work as providing more “hands-off” funding to particularly strong organizations, indicating that there’s a time and place for both styles of grantmaking.) We will soon be publishing conversation notes from another conversation on this specific topic, which will give many more examples of cases in which various foundations were instrumental in the creation of partner organizations.

Other examples of “active funding” can be seen in our notes from discussing drug policy with Open Society Foundation representatives and in CIFF’s description of its approach to funding. An Atlantic Philanthropies document on political philanthropy states, “Once a grantmaker decides to support an advocacy campaign, there are several options for how to manage advocacy-oriented funding. Determine early on whether there is 1) a grantee, or coalition of grantees, that is already actively involved in a campaign or can easily take leadership; 2) a third party group that should be contracted to act as the manager for a new campaign initiated by the funder(s); or 3) the campaign would best be managed directly by foundation staff. Each approach has its own benefits and risks depending upon the issue and the funder(s).” In all three cases, it is clear that foundation staff sometimes intend to restrict funds and/or manage projects quite actively rather than simply providing funding.

When we first started work on GiveWell Labs, we contemplated a highly passive approach in which we would ask major charities – and major foundations – for the “best projects that aren’t already funded.” This approach seemed to face many obstacles. When speaking with major charities, we found that:

• Some groups (such as GAVI and PATH) emphasized the need for unrestricted funds to respond to opportunities as they came up, rather than pointing to specific un-funded opportunities.
• Other groups (such as GAIN and Micronutrient Initiative) listed many possible projects, at a very broad level, and asked us to direct them to the ones we were most interested in.
• In all cases, it’s been a consistent fact that there are no existing detailed writeups on the ideas ready for us to review. Rather, it seems to consistently be the case that detailed writeups on potential projects are developed for (and in collaboration with) potential funders. (Every project proposal we’ve ever seen from a large organization has been for a specific funder).

When speaking with major funders, we were often presented with more specific project proposals, about which more written information was available. However, in these cases, it wasn’t always clear to us that the projects we were looking at needed more funding to go forward. In the case of the PSI project that Good Ventures co-funded with the Gates Foundation, we initially believed there was a concrete funding gap and later changed our view. In the case of the Wellcome Trust, it was made explicit to us that there are rarely specific projects that are outlined and ready to go but not funded.

Without detailed writeups, and without a good deal of context, it’s very difficult to assess a potential project. Asking for a detailed writeup would be, to some extent, indicating and committing interest in the potential project. Because of this dynamic, it’s very difficult to a purely “passive” funder: one needs a sense of which sorts of projects one is most interested in.

This may also help explain the shortcomings of the “maximally passive” approach we took in 2007. (See our July 2012 blog post discussing this.) We had hoped that many charities would fully make the case for their impact to us, and that we would simply choose the best case. But when writeups are usually done for – and in collaboration with – specific funders, this sort of approach isn’t possible, and it’s necessary to have an idea of one’s criteria in order to even decide what to evaluate.

Another approach to “passive” funding is to focus on smaller, startup-like nonprofits rather than large charities and foundations, as Ashoka does. However, even when seeking out groups like this, we see possible advantages to being active:

• There are already multiple groups that take a systematic, “sector-agnostic” approach to funding smaller and more startup-like groups. (Ashoka, Draper Richards Kaplan, Echoing Green; Skoll Foundation at a later developmental stage.) We’re not sure whether we’d have substantial value-added over such groups if we focused on taking a similar approach.
• We’ve seen multiple cases in which a funder’s “active” strategy was crucial in finding – or even creating – a “startup-like” nonprofit. Some of these involved interactions with other funders from which we have not produced public information, but we can discuss cases that involved us directly. These are intended to give examples of how one’s active strategy can be crucial in becoming aware of (or even contributing to the creation of) a “startup-like” nonprofit; we don’t intend these examples to be interpreted as groups we’re actively considering funding.
  • In one case, we spoke to a professor about the Cochrane Collaboration, and after he saw our post on meta-research, he asked whether we’d be interested in a proposal for the creation of a meta-research-oriented group. He explained to us that he had wanted to write up such a proposal for a long time, but had not done so previously, because he couldn’t identify any funders that would likely be interested.
  • Dario Amodei has also been influenced by our discussion of meta-research. As an academic himself, he has considered trying to get involved in improving the system of academia. Our interest in this area has helped give shape to his interests, and has played a role in the creation of Vannevar, a group of scientists dedicated to making scientific research more efficient, collaborative and productive. According to Dario, the knowledge that a funder might be interested in his collected observations on academia – even though the interest was very preliminary and did not come with any funding commitment – has spurred him to conceptualize, and follow through on, a strategy focused on producing the sort of information such a funder might find valuable.

I think the above observations point to a potential disanalogy between the for-profit and nonprofit worlds. In the for-profit world, a business gets capital from investors but ultimately gets its revenue from customers (and if it can’t raise capital, it can often “bootstrap” to the point where it has something more impressive to show funders). In the nonprofit world, funders provide both the capital needed to get started and the ultimate verdict on whether a project succeeded. Thus, in the nonprofit world, it seems that the “what projects are people trying to start?” question and the “what projects do people think major funders will be interested in?” question are tightly integrated. Expressing clear interests (as we did with our meta-research post) can cause new opportunities to emerge; simply looking for “shovel-ready” projects may severely limit a funder’s options.

Another possibility that has occurred to me is that the role of “strategy development” may be structurally more common at foundations/grantors than at charities/grantees. Since foundations ultimately decide which strategies get funded, people who are oriented toward developing strategies may gravitate toward foundations.

In the nonprofit world of today, it seems to us that funder interests are major drivers of which ideas get proposed and fleshed out, and therefore, as a funder, it’s important to express interests rather than trying to be fully “passive.”

It’s possible, and perhaps desirable, that the nonprofit world of the future will work differently. If funders had greater commitments to transparency, and posted the proposals they chose not to fund, it’s possible that a database of “shovel-ready” proposals could emerge. We certainly intend to share the proposals we don’t fund, when possible, and to encourage others to do the same. But in the world as it exists, it seems important to recognize that articulating preferences and areas of interest is an important thing for a funder to do.

Partly for this reason, we’ve largely de-emphasized the kind of thinking we were doing in 2011 about “sector-agnostic” giving (looking across all issue areas for the most outstanding projects), in favor of the related idea of strategic cause selection. In strategically choosing causes, we want to place some weight on the criterion of room for more funding, and therefore we’d conceptually like to choose causes based partly on what projects are available to fund within them. However, we don’t believe that looking at the current set of “shovel-ready” projects is a reliable way to assess conceptual “room for more funding,” and we believe it may sometimes be fruitful and necessary to express interest in a cause despite not having a good sense of what projects are available within it. We will have to find other – and perhaps rougher – ways of estimating which causes are “overfunded” as opposed to “underfunded.” ]]> http://blog.givewell.org/2013/04/18/challenges-of-passive-funding/feed/ 5 http://blog.givewell.org/2013/04/16/is-the-world-getting-better/ http://blog.givewell.org/2013/04/16/is-the-world-getting-better/#comments Tue, 16 Apr 2013 16:19:43 +0000 Elie http://blog.givewell.org/?p=1822 [CLICK TO READ MORE]]]> I recently spoke with Robin Hanson and he proposed that donors invest their money in order to give more in the future.

One question that came up was whether the world is improving such that opportunities to cost-effectively accomplish good are running out.

I think there’s a strong argument that this may be the case, at least when it comes to improving the health and opportunities of the world’s poorest. The following charts illustrate that child deaths have been falling dramatically and population growth has been slowing as incomes have risen. (In the charts, the trails show each country’s changes over time, from the first year noted in the bubble with the country’s name until the present day.)

The graphs below come from Gapminder.org. The charts below only show several countries for several indicators, but they’re broadly representative of what has happened. To see more, click through to Gapminder.

As we begin to research other areas where philanthropy could play a role, we similarly want to learn from history about philanthropy’s track record. We’ve done some minimal work looking for literature, but what we’ve found was either not on the topic we’re most interested in (i.e., what has philanthropy accomplished?) or wasn’t at a sufficient level of depth to adequately answer the question “what role did philanthropy, as opposed to other factors, play in the outcome in question?” (For more, see our 2012 post on the best source we’ve found so far for this sort of information.)

Because we’ve struggled to find relevant literature, we’ve begun a project to investigate the possibility of funding someone to do a more thorough job of synthesizing what already exists – or to create better literature. We think it’s possible that we might seek to fund this type of work in the future. Such funding would be modest in size, at least to start, and would be thought of more as “costs of research” than as “top giving opportunities.” We would view this work, at least in the short term, as a potential way to increase our total “research capacity” by answering questions that we would otherwise try to answer internally.

Some examples of projects we might consider include:

• An annotated bibliography of what relevant materials already exist – materials written by academics and think tanks as well as materials available in foundation archives (e.g., the Rockefeller Archives house archival information from multiple foundations and make this information available to researchers).
• Literature reviews of topics covered by existing literature.
• A list of the 20 most important philanthropic “success stories” (policy changes, scientific/technical contributions, or other) of the last 25 years.
• A list of 20 major philanthropic failures (e.g., cases in which philanthropists spent large amounts of money with disappointing results).
• In-depth case studies of the above aiming to questions such as “What role did philanthropy play in this change?”, “What other, non-philanthropic factors played a major role?”, “Who (if anyone) was opposed to the change in question and how did they try to prevent it from occurring?” and “What was the social impact of this change?” These case studies could take the form of ~10,000-word “long-form journalism,” academic papers, or think-tank white papers.
• We could also imagine supporting work that’s more focused on reporting on events as they develop. For example, we could fund a journalist to visit NGOs and report back, much in the way we’ve done on our site visits to our top charities. Or, we could support a journalist to report on the ongoing way in which philanthropists develop strategies and how those strategies play out.

We’re very early in our investigations. We still aren’t sure whether this work would be best suited to academics, think tanks, journalists, or someone else, and we have little idea of what scope (or how much funding) we will eventually find worthwhile. As always, we plan to be fully transparent with the results of this work, so the output of what we produce will be publicly available.

What we’ve done so far and plans for 2013

Thus far, I’ve spoken with about 15 people including journalists, academics, and people who have worked (or work) at think tanks. The conversations have generally been short and we haven’t produced notes from individual conversations. What we have taken away from these conversations is a broad consensus that (a) there isn’t much information of the type we’re looking for already available and (b) this is an interesting project that people would be excited to participate in. The book that’s been most frequently recommended to me as fitting what we’re looking for is Steven Teles’s The Rise of the Conservative Legal Movement.

The people I’ve spoken with (who gave me permission to put their names in this post) are:

• Steven Teles
• Chris Hughes
• Dana Goldstein
• Felix Salmon
• Buzz Schmidt
• Dylan Matthews
• Rob Reich
• Linda Hirschman
• Stanley Katz
• Josh Freedman
• Benjamin Soskis. Mr. Soskis holds a PhD in history from Columbia University, with a focus on philanthropy. He is fellow at the Center for Nonprofit Management, Philanthropy and Policy at Geoge Mason University. He is currently working for us on a contract basis to survey existing literature on the history of philanthropy.
• Howie Lempel. Howie worked for the Brookings Institution for two years and is currently enrolled at Yale Law School.

While this project may become something much bigger, our goals for 2013 are to undertake several small projects (as a very rough benchmark, we’ve thought of potentially funding up to $250,000 this year) to see if we’re able to produce the type of information we’re looking for.

In general, the below statements broadly describe the values of the GiveWell staff who have final say over our research. There may be cases in which different individuals would give different levels of weight/confidence to the various statements than I have, but at a high level we expect these statements to be a reasonably good guide to the values underlying GiveWell’s research.

Values

We don’t believe it would be productive to try to produce a complete explicit characterization of the fundamental values that guide our giving recommendations, but we think it’s worth noting some things about them.

• We are global humanitarians, believing that human lives have equal intrinsic value regardless of nationality, ethnicity, etc. We do believe there may be cases where helping some people will create more positive indirect effects than helping others (for example, I stated in 2009 that I preferred helping people in urban areas for this reason, though this represents my view and not necessarily the view of others at GiveWell). However, we do not agree with the principle that “giving begins at home”: we do not assign more moral importance to people in our communities and in our country than to others.
• The primary things we value are reducing suffering and tragic death and improving humans’ control over their lives and self-actualization. We also place value on reducing animals’ suffering, though substantially less than on human suffering. (We do not have clear consensus views on how to weigh these things against each other.)
• We do not put strong weight on “achievements” (artistic endeavors, space exploration, etc.) as ends in themselves, though these may contribute to the things we do value (details above). We also don’t put strong weight on things like “justice,” “equality,” “fairness,” etc. as ends in themselves (though again, these may contribute to the things we do value).
• We are broadly consequentialist: we value actions according to their consequences.
• We are operating broadly in an “expected value” framework; we are seeking to “accomplish as much good as possible in expectation,” not to “ensure that we do no harm” or “maximize the chance that we do some good.”

There are many questions that we do not have internal consensus on, or are individually unsure of the answers to, such as

• How should one value increasing empowerment vs. reducing suffering vs. averting deaths?
• How should one value animal suffering in comparison to human suffering?
• Is it better to bring someone’s quality of life from “extremely poor” to “poor” or from “good” to “extremely good?”
• Is creating a new life a good thing? Can it be a bad thing? How “desirable” or “undesirable” must the life be for its creation to count as a good/bad thing? Should we value “allowing future lives to exist that would never come into existence otherwise” similarly to “lives saved?”
• Is it better to save the life of a five-year-old or fifteen-year-old?

We don’t believe it is practically possible to come to confident views on these sorts of questions. We also aren’t convinced it is necessary. We haven’t encountered situations in which further thought on these questions would be likely to dramatically change our giving recommendations. When we have noticed a dependency, we’ve highlighted it and encouraged donors to draw their own conclusions.

Worldview

We view the questions in the previous section as being largely “fundamental,” in that empirical inquiry seems unlikely to shift one’s views on them. By contrast, this section discusses views we have that largely come down to empirical beliefs about the world, but are very wide-ranging in their consequences (and thus in their predictions).

There are two broad worldview characteristics that seem, so far, to lie at the heart of many of our disagreements with others who have similar values.

1. We are relatively skeptical. When a claim is made that a giving opportunity can have high impact, our default reaction is to doubt the claim, even when we don’t immediately see a specific reason to do so. We believe (based partly on our experiences investigating charities) that most claims become less impressive on further scrutiny (and the more impressive they appear initially, the steeper the adjustment that happens on further scrutiny). As a result, we tend to believe that we will accomplish more good by recommending giving opportunities we understand relatively well than by recommending giving opportunities that we understand poorly and look more impressive from a distance.

We have written about this aspect of our worldview previously, and have done some rudimentary work on formalizing its consequences:

• A Conflict of Bayesian Priors? lays out the basic fact that we have a skeptical prior (by default, we expect that a strong claim will not hold up to scrutiny).
• Why We Can’t Take Expected-Value Estimates Literally does some basic formalization of this aspect of worldview and explores some of the consequences, defending our general preference for giving where we have strong evidence that donations can do a lot of good rather than where we have weak evidence that donations can do far more good. It also explains why we put only limited weight on formal, explicit calculations of “expected lives saved” and similar metrics.
• Maximizing cost-effectiveness via critical inquiry expands on this framework, laying out how it can be vital to understand a giving opportunity “from multiple angles.”
• We will likely post more in the future on this topic.

2. We believe that further economic development, and general human empowerment, is likely to be substantially net positive, and that it is likely to lead to improvement on many dimensions in unexpected ways. This is a view we haven’t written about before, and it has strong implications for what causes to investigate. While we see great value in directly helping the poorest of the poor, we’re also open to the viewpoint that contributing to general economic development may have substantial benefits for the poorest of the poor (and for the rest of the world). And while we are open to arguments that particular issues (such as climate change) are particularly important to the future of humanity, we also believe that by default, we should expect contributions to economic development and human empowerment to be positive for the future of humanity; we don’t feel that one must necessarily choose between improving lives in the short and long term. (This view is part of why we put more weight on helping humans than on helping animals.)

Because of this view, we are open to outstanding giving opportunities across a wide variety of causes; we aren’t convinced that the best opportunities must be in developing-world aid, or mitigation of global catastrophic risks, or any other particular area. Even if a particular problem is, in some sense, the “most important,” it may be possible to accomplish more good by working in another cause where there is better room for more funding. We will discuss this view more in a future post.