The data-driven approach: GiveWell
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Illustration: Eniola Odetunde/Axios
GiveWell sizes up nonprofits by gauging how effective each dollar spent is at saving or improving a life.
Why it matters: Donors who crave cost-effectiveness and bang-for-the-buck gravitate to GiveWell's annual recommendation list, which this year includes nine charities that support life-saving or income-generating measures in the developing world — primarily Africa.
Details: GiveWell's top picks are the Malaria Consortium, which gives prophylactic medicine to children in sub-Saharan Africa, and the Against Malaria Foundation, which supplies insecticidal nets to at-risk populations.
- A $7 donation to the Malaria Consortium will protect a child from the disease, GiveWell says, while $3,000-$5,000 will save a life.
- A $5 donation to Against Malaria will pay for a life-saving mosquito net.
Other charities on GiveWell's list include Helen Keller International, which spends about $1 to give a vitamin A supplement to a child at risk of deficiency, and GiveDirectly, which "gives cash to very poor families, mostly in Africa, to spend as they like," as GiveWell puts it.
- Four other charities that GiveWell recommends are dedicated to the treatment of parasitic worms in children. Clearing parasitic infections — in addition to its salubrious effects — "may lead to a large increase in lifetime earnings."
- The one new charity on GiveWell's list this year is New Incentives, which pays cash to caregivers in Nigeria to coax them to bring children to medical clinics for routine vaccinations.
- The charity spends about $47 "to provide an incentive to a caregiver to complete a baby’s immunization schedule," GiveWell says.
Background: GiveWell was founded in 2007 by a pair of hedge funders who were seeking to apply the same rigorous financial analysis and performance metrics to charities as they did to the fund they were managing.
- Last year donors who came through the GiveWell portal gave $150 million to the organizations on the nonprofit's list.
- "To put that in context in terms of philanthropic spending, the Rockefeller Foundation as a whole probably spends around $200 million a year, and so it's a huge amount of money in terms of philanthropic spending that's flowing based on these recommendations," says Neil Buddy Shah, managing director at GiveWell.
The bottom line: While some U.S. donors may prefer to support charities closer to home, those who favor the "greatest good for the greatest number" approach may favor GiveWell's philosophy.
- "Our starting point is zooming all the way back and saying, 'If we care about all human lives equally, what are the most cost-effective ways to improve people's lives?" Shah tells Axios.
- "And it just turns out that despite the fact that there are lots of worthy causes here in the U.S., the scale of disease and poverty is just on a completely different level in the poorest parts of the world."
