Grantmaking with the doors open. Our website will make THOROUGH analysis of charities (the kind now exclusive to foundations) usable to all donors, large and small – and open the dialogue on how best to improve the world to anyone with an opinion.
We started as a group of donors exploring how to help people as much as possible with our donations. After several months of exploring this question part-time, we've found the issues so complex, and the relevant information so scarce, that we're determined to martial the resources to answer this question well – and unlike all foundations and advisors currently doing similar research, we want to share everything we find via the web so that nobody has to do it over.
A good resource will help individual donors – who account for the lion's share of giving – make decisions as informed as those of the biggest foundations. It will also change the competitive pressures on charities (rewarding them for effective and proven strategies, rather than savvy fundraising) and open the discussion of how best to help people to anyone with an opinion.
Transparency means making our materials not just available but useful. This means a well-designed, usable website that lets any donor examine our giving decisions at many different levels of detail, and discuss them in an open forum. If they like the way we make decisions, they can give through our fund (see our financial model), adding to our leverage and capacity; if not, they can use our information to draw their own conclusions.
Unlike most social media projects, we don't expect to build a tool and wait for end users to do the rest. We know we are researching complex social problems, and we seek to do the kind of analysis and evaluation that large grantmakers do (and currently do not share). Social media technology is not the end, but the tool that will eliminate the black box of grantmaking and bring a new level of openness and global dialogue to the difficult and important question of where to give.
We will operate as a grantmaker; like a community foundation or United Way, we will offer individuals the chance to have their donations pooled and managed for the greatest possible good. Unlike a community foundation or United Way, our focus is on global humanitarianism; and unlike any existing option for managed giving (including philanthropic advisors and private foundations), we will explicitly pursue total transparency in our decisions.
Thus, the research a donor pays for will be leveraged far beyond the individual donation: it will contribute to global dialogue and influence other donors, large and small. This is the kind of “money management” that makes the most sense when the goal is to improve the world: allow the work that goes into managing your giving to inform everyone else’s.
Since there are always more causes to explore, and there is always more research (and monitoring) to be done, we anticipate that transparency will not change the incentives for a donor who likes the way we make decisions to give through our fund. It will, however, ensure that we remain accountable to our donors, and the market will continually assess how good a job we're doing.
We have found nonprofits across the board (both charities and foundations) to be resistant to sharing good information about what they do and what the evidence is for its effectiveness. It seems that nobody wants to be the first to show imperfection.
We can change that equation, by offsetting the intangible benefits of hiding weakness with the very tangible benefits of significant unrestricted grants.
Social problems are complex; like all grantmakers, we will have to make difficult, debatable decisions. Nothing we publish will be immune to criticism – that’s exactly why we need to publish it and invite that criticism.
We will need money both for operating expenses and for making grants (see "Potential obstacles"). We will also need an excellent web designer to create a resource that is informative and thorough while also being useful, usable, and open.
We are also seeking connections at charities and foundations who share our commitment to transparency, and can help us get the information we need to assess the most effective ways of helping people.
Our key milestone is a useful, usable online donor resource with a large (though not comprehensive) scope; honest, fair, helpful reviews; and space for open discussion. We aim to have this by December (peak giving season) of 2007. After that point, the market will determine the future scope and direction of the project.
Our first need is to raise funds; as soon as we have enough committed, we will send out grant applications and focus on grantmaking research until November of 2007. At that point our focus will shift to organizing, summarizing, and designing a website around what we have.
We started as a group of donors exploring how to help people as much as possible with our donations. After several months of exploring this question part-time, we've found the issues so complex, and the relevant information so scarce, that we're determined to martial the resources to answer this question well – and unlike all foundations and advisors currently doing similar research, we want to share everything we find via the web so that nobody has to do it over.
A good resource will help individual donors – who account for the lion's share of giving – make decisions as informed as those of the biggest foundations. It will also change the competitive pressures on charities (rewarding them for effective and proven strategies, rather than savvy fundraising) and open the discussion of how best to help people to anyone with an opinion.
Transparency means making our materials not just available but useful. This means a well-designed, usable website that lets any donor examine our giving decisions at many different levels of detail, and discuss them in an open forum. If they like the way we make decisions, they can give through our fund (see our financial model), adding to our leverage and capacity; if not, they can use our information to draw their own conclusions.
Unlike most social media projects, we don't expect to build a tool and wait for end users to do the rest. We know we are researching complex social problems, and we seek to do the kind of analysis and evaluation that large grantmakers do (and currently do not share). Social media technology is not the end, but the tool that will eliminate the black box of grantmaking and bring a new level of openness and global dialogue to the difficult and important question of where to give.
This work is licensed under a Creative Commons Attribution 3.0 License.
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Great Idea
I like the idea a lot; however, I'd like to see more detail on the levels of transparency you intend to pursue. For example, what information would I find on a nonprofit organization through your database? Will this be reduced to a Givewell score (to feed our need for metrics), or will I find a database of information about the organization, designed to be more meaningful than the 990?
Grassroots.org is currently developing some tools that you may find useful (or we may find other ways to work together on some of the tech stuff) ...the Grassroots.org Nonprofit Toolbox. There may also be value in making your data available through an API; always a good idea in this world of web-to-web information flows. Perhaps organizations would see value in posting a GiveWell summary snippet on their websites, along with a Givewell badge that would link potential donors to contribute to the Givewell pool?
Good luck!
Dave.
How much transparency?
Short answer: we want as much transparency as possible.
Transparency means more than disclosure, though - it means making our information useful to as many people as possible, whether they have minutes or days. Our current website, at www.givewell.net , gives a very preliminary sense of how we plan to deal with this: each charity has a very brief (~2 sentence) summary on the associated "cause" page, and in cases where we were able to do full reviews ... we provide an Executive Summary (a few paragraphs), a full review (several pages), and finally all of the sources we have permission to share. The reviews use footnotes to link to the sources, so you don't have to read all our sources to check out the ones that most interest you: every claim we make is linked to the basis for it. Nothing we say needs to be taken on faith, except where charities have forced us to keep their own materials confidential.
So - we see transparency as not just a value but a challenge, something we've already worked very hard on, and intend to work much harder on. Doing it right - putting all the information we're going to find into a website that works - is going to take great tools, and I'll definitely have my eye on your project. (We're also specifically planning on using "badges" for recommended charities.) If you don't mind - what are you specifically planning on providing, and what about it is specifically good for nonprofits - are we talking about new tools, or help with existing tools (Drupal, vBulletin, etc.)?
Thanks
Thanks for the response; a pleasure to see that some of these profiles are being checked often :)
We're mostly working on doing new things with existing tools. Drupal, for example, and EGroupware, have both been around for years; but no one's integrated the two. Similarly, the Drupal CMS has tons of documentation (in the form of guides, screencasts, and even a few published books) aimed specifically at people like me; but there's nothing aimed at the end user, because no one thought a non-tech end-user would ever manage a Drupal installation.
So how does the non-techie figure out how to create a page? Or how to give their page an intelligent name, or design their content with a view to good information architecture and internet marketing / search engine optimization? We think the smallest nonprofits have a lot to contribute to the internet conversation, if only someone could host these tools for them and give them the right training and support, both for free.
In some cases, we're developing our own tools, both internally and externally. Figuring out how to sync Drupal data to Salesforce, writing a robust provisioning system, and creating yet another event management / registration system...they're all in the works. We (both internally and through partnerships) have a ton of open source consulting talent, especially with Drupal, so low-cost consulting for higher-end projects is also something we'd be interested in, though our main focus will be getting as many free tools to as many organizations as possible. There are some very cool things we're keeping our eye on (like Drupal + OpenID) that we'll probably get behind as soon as we have some breathing room.
We also go a little above and beyond our "normal" tech offerings for organizations we partner with for specific projects, so if there's something you think we might be able to help with, please let us know! :) What kinds of tools are you currently looking at?
Dave.
Interesting
That definitely sounds like a potential fit. We don't actually need to have our website overhauled until giving season (our target for having a usable resource) so our investigations have been very preliminary, but the approach that looks most likely is probably Drupal + some customization. We should talk more over email (I'll copy this into your contact form).
Good Idea
It will be interesting to see how this concept plays out in the "real world". There are some good ideas here, its just a question of how "catchy" they are to potential donors.
I, for one, will be watching wit keen interest.
A Potential Obstacle
It is alittle unclear how exactly you are going to force transperancy. It sounds like you are planning on having a large pool of donor money that you can then use to leverage organizations to be transparent, but how are you planning on getting individual donors to put you in charge of their money?
Furthermore, there are already numerous other organizations that analyze how much overhead a non profit has, so what would you offer above and beyond that?
I am raising these questions because I think what you are trying to do is really important. After having worked for an NGO in Cambodia I know how much donor money organizations can waste, and I really think the world needs transperancy, but its a tough one to tackle.
Why donors should go through us
Thanks for the questions. I've answered them separately.
You ask how we're going to get individual donors to put us in charge of their money. The answer is the same way that a United Way, community foundation, or philanthropic advisor does: by convincing them of the value of our analysis and our project. There are tons of donors who want their donations to be well analyzed, but don't want to do the analysis themselves, and are more than happy to outsource that part of it; that's why the model I'm describing is so common and works so well.
The difference is that we offer not just to do the analysis for them, but to leverage it, so that it can contribute to global dialogue and influence other donors as well. This is the kind of "money management" that makes the most sense when your goal is to improve the world: rather than buying exclusive access to information to make sure that only you benefit, fund public analysis so that everyone does. I think a lot of current advisors have a muddled analogy between investing and charity ... both are areas where it makes sense to outsource your research and analysis, but hiding what you find only makes sense in the investing context.
Effectiveness does not mean low overhead
Regarding overhead: would you evaluate a business based on how much of its money goes to "administrative expenses?" A great business gets great things done by spending a lot of money on great people (salaries), great infrastructure (IT, etc.), and thorough planning and self-evaluation. These are all "overhead." I think the current association of overhead with waste is totally misguided and even destructive - the charities we've spoken to often have too many "restricted funds" to do the things they know would allow them to help people as much as possible. Ideas are more valuable than dollars, and focusing on getting your money "straight to the people who need it" comes down to throwing money at a problem ... that doesn't work in any sector.
I think this emphasis is a product of the fact that there's so little information available about what charities ACTUALLY DO. Existing donor resources (we have a pretty comprehensive rundown in Appendix B of our business plan, available on givewell.net) aren't grantmakers, they don't have relationships with charities, and they really don't spend any time investigating them - they just grab the one thing that is available in public and standard form, the Form 990, and draw what they can from it. The Form 990 has practically no useful information on it (we pick it apart in our Appendix C if you want more on that), and so they end up promoting the measures of what they can measure, rather than measuring what matters.
The fact is, looking at what strategies a charity uses, and how they actually affect people (as opposed to its accounting), is incredibly hard work. The only way I know of to do it is to operate as a grantmaker with significant human and financial resources. There are plenty of grantmakers out there doing this every day ... our difference, of course, is our transparency.
Thanks again for your questions. Please let me know whether I've answered them well.
measurement
The reason there is so much emphasis on overhead is that it is an easily graspable metric. In our society people like to see quantitative measurement, even when what they are looking at (eg, a charity) can only be truly measured in a qualitative way.
Have you thought of more comprehensive metrics that could be applied?
Meaningful measurement
Yes, a lot. We discuss measurement extensively in our business plan, and I've summarized our thoughts informally in this post on The GiveWell Blog.
This is a really tricky issue. I completely agree with you (and disagree with many others) that having something measurable is essential. At the same time, truly meaningful measurement is frustratingly difficult and expensive. My belief is that we have no choice but to deal with that frustration: we can't be afraid to spend a lot of time, effort, and yes, money doing difficult studies and analyses, trying to figure out whether charities are actually impacting people's lives.
That's among the many things that will never happen as long as people associate efficiency with low overhead - and as long as the few foundations doing the hard, time- and money-consuming work of meaningful measurement have their doors closed. In other words, it's among the many reasons that a project along our lines needs to happen ASAP. Thoughts?
Yes!
I think this is GREAT. You push those foundations and charities into transparency!
I am excited to see this take shape. You have my support.
--ivan (quixotic1.com/Genocide Intervention Network)
Glad to hear it!
Glad to hear it!
Question
Charity as life goal, not epilogue
Thanks for the question. The idea of GiveWell is to bring the quality of analysis and due diligence normally available only to megadonors to small-to-medium donors, who account for the lion's share of giving.
So it shouldn't be surprising that this project wasn't started by megadonors, it was started by medium-size donors giving $5,000-$10,000 a year. That's enough that we wanted to do it well, and we recognized that getting the information and sharing it could create a lot of value. We're not billionaires, and if we were, the transparency part probably wouldn't have occurred to us.
Currently, the people leading the charge on effective giving are the ones who've already earned enough money that they don't have to answer to anyone ever again. They've demonstrated excellence at something (whatever they made their money in), but they're also at the end of their careers and they're not under any real pressure. We are a different model: young social entrepreneurs who want to be held accountable by donors of our own. The past ten years have shown which kind of person is more likely to really innovate.
Does that answer your question?
Great answer
Yes,it does, Holden, and answers it very well. Thanks