Friday, December 21, 2007

M&E for Philanthropy

The following shows what makes it so difficult to work with charities!

2 Young Hedge-Fund Veterans Stir Up the World of Philanthropy
Published: December 20, 2007
Holden Karnofsky and Elie Hassenfeld rank charities by analyzing the numbers in much the same way they did at their investment management company

In the fall of 2006, they and six colleagues created what Mr. Karnofsky calls a “charity club.” Each member was assigned to research charities working in a specific field and report back on those that achieved the best results. They were stunned by the paucity of information they could collect.

“I got lots of marketing materials from the charities, which look nice, you know, pictures of sheep looking happy and children looking happy, but otherwise are pretty useless,” said Jason Rotenberg, a former member of the club and now a $50,000 donor to the Clear Fund. “It didn’t seem like a reasonable way of deciding between one charity and another.”

GiveWell’s findings are available on the Internet, without charge, at In evaluating charities, Mr. Karnofsky and Mr. Hassenfeld press them for information, analyzing the numbers in much the same way they did at Bridgewater. The Smile Train, for instance, a charity that repairs cleft palates, was asked how much it spent in each region and each country to treat how many patients in each.Many in the field question how long GiveWell can survive. While 34 percent of wealthy donors who responded to a survey sponsored by the Bank of America said they wanted more information on nonprofits, almost three-quarters said they would give more if charities spent less on administration. And collecting information is costly.

As a result, most philanthropic advisory services like GiveWell have a hard time raising money. The Clear Fund has raised $300,000 since its inception this year, about half of which has gone to operating GiveWell.

The problem is that you want charities to measure impact. Although the cost of measuring is sometimes prohibitive, the potential cost of not measuring should be enough reason to make sure that you do measure.