Comments on: Why GiveWell Matters

By: Matt

Matt — Thu, 03 Jan 2008 00:08:01 +0000

Don’t miss the part where he offers to donate to Metafilter. That’s priceless.

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Wed, 02 Jan 2008 15:26:41 +0000

Incredibly stupid move by Holden. You can find his comments on the situation here.

By: Gates Keeper

Gates Keeper — Tue, 01 Jan 2008 05:50:10 +0000

Anonymity is not for everybody …

http://metatalk.metafilter.com/15547/GiveWell-or-Give-em-Hel

By: Chris

Chris — Tue, 01 Jan 2008 05:46:28 +0000

There’s an interesting development concerning Givewell going on over at metatalk. Basically Holden got caught spamming and trashing other charities:
http://metatalk.metafilter.com/15547/GiveWell-or-Give-em-Hell

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Fri, 21 Dec 2007 17:49:55 +0000

Amit,
Love the analysis. Traditional econ recognizes externalities (W) to show that R>C can produce products in a free market even when W+R

I like the idea of thinking of R as an externalities and focusing on W.

Thanks for the input. I’d like to write this up as a longer post soon.

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Fri, 21 Dec 2007 17:31:21 +0000

Bruce,
I believe foundations have every right to not share their reasoning for funding their grantees. I just think they should want to share it because doing so will produce higher social returns on other donors money. Classic leverage.

Certainly there are some foundations that are exploring ways to talk more about their internal thinking. EMCF is doing some great stuff. But I think a “broad indictment” is actually perfectly accurate. Since the field as a whole does very little to make their institutional knowledge available to other donors.

By: Kevin Jones

Kevin Jones — Fri, 21 Dec 2007 01:33:42 +0000

that is to say, either/or definitions no longer fit; you could consider them Newtonian artifacts in a quantum, multidimensional and non linear world where risk return and impact are part of the equation around how you use your money in the world. There is a third dimension of impact; we all know externalities can no longer be kept off the balance sheet. the melting icebergs are a leading indicator that we need to change our ways, much less our accounting methodology.

By: Kevin Jones

Kevin Jones — Fri, 21 Dec 2007 01:30:43 +0000

not surprisingly, sean i think the definitions of investing and giving are outmoded social constructs, myths we’ve inherited that no longer do the job.

By: Amit Patel

Amit Patel — Thu, 20 Dec 2007 23:05:29 +0000

I think the difference between investing and giving is that with investing, you are primarily concerned with the return *you* receive, and you ignore the consumer and producer surpluses. Whereas with philanthropy you are primarily concerned with the total return, whether it goes to you or to others, so you want a measurement of that consumer/producer surplus.

If we call return to society W (not counting what the investor got back), the cost to the investor C, and return to investor R, then investing occurs when R > C (actually R/C has to be greater than other investments), ignoring W. However, with free markets we believe W >= 0, so the total effect W + R is greater than the money put in, C.

Traditionally with charities we think of R = 0, and we *hope* that W > C. Unfortunately, unlike with business, where R < C leads to businesses closing, a charity can operate with W < C indefinitely. Therefore W + R < C, and society as a whole is losing.

GiveWell’s argument seems to be that we need information about W, so that we can evaluate organizations and choose those that have a high W/C ratio. It’s very hard to know W, but at least having an estimate helps with comparisons.

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Thu, 20 Dec 2007 18:33:30 +0000

Right on Kevin. Here’s a question for you. Giving money away is the same as a -100% return. So is getting 1% of your donation back still a gift? Is giving $100 and getting $1 back different than giving $99? If they’re the same then is giving $100 and getting back $99 a gift? What about giving $100 and getting back $110?

Is there any bifurcation between giving and investing or is it purely a mental contruct?

By: Kevin Jones

Kevin Jones — Thu, 20 Dec 2007 18:03:05 +0000

creative destruction is a force that should be unleashed in philanthropy. glad to see it happening. now we need to get rid of the bifurcation of asset thinking from giving to investing.

By: Bruce Trachtenberg

Bruce Trachtenberg — Thu, 20 Dec 2007 16:38:42 +0000

Sean,
I also think it’s great that GiveWell is getting that attention, not just about themselves, but the need for donors to know how to evaluate a charity’s performance. But I also think the repeated knocks and broad indictments against foundations are unfair…especially since the same WSJ article you cite does refer to several foundations that are sharing their information:

“Another option is to visit Web sites and piggyback on the work of so-called venture-philanthropy firms, such as New Profit Inc., in Cambridge, Mass., Social Venture Partners in Seattle, and Venture Philanthropy Partners in Washington, which do much of the legwork needed to assess the effectiveness of their charitable giving. Or, donors can check out charities that get money from foundations that put a premium on effectiveness, such as the Edna McConnell Clark Foundation in New York and the Annie E. Casey Foundation, based in Baltimore.”