Stephanie Strom at the New York Times writes up a great profile in “2 Young Hedge-Fund Veterans Stir Up the World of Philanthropy”:
Their efforts are shaking up the field of philanthropy, generating the kind of buzz more typically devoted to Bill Gates and Warren E. Buffett, as charities ponder what, if anything, their rigorous approach to evaluation means for the future…
Read the full article here.
Sally Beatty and Rachel Emma Silverman at the Wall Street Journal discuss GiveWell in their article, “Doing Due Diligence On Your Donations”:
Donors can readily compare charities from a financial perspective: how much an organization spends on administrative costs or fund raising, for instance. But givers, especially younger, business-minded ones, now tend to want more information on how successful a charity’s programs are in addressing the issues the charity sets out to resolve, from feeding the homeless to securing employment for the disabled. That’s especially important as the number of charities continues to grow, with about 1.4 million to choose from…
… And there are a growing number of groups whose aim is to make charity-effectiveness evaluations open to the public. GiveWell, for instance, was started this year by two former hedge-fund researchers who were frustrated by the lack of available information on charities’ results and impact. They research and grant money to organizations in specific topic areas that the group deems effective and post the results on their Web site. For example, when researching job-training charities in New York, GiveWell asked groups to provide data on how many people took advantage of the programs, what skills they were taught, what percentage of clients found jobs, what kind of jobs they found, and how long workers kept their jobs, says 26-year-old co-founder Elie Hassenfeld.
The article ends with this advice,
It’s also smart to see if the charity’s progress has ever been evaluated by a third party, rather than just the charity itself. Check the charity’s Web site or annual report for specific details on how it gauges its results. If the information isn’t there, call the charity and ask. Be wary about giving, however, if a charity doesn’t answer your questions or provide annual reports or other filings.
When the Wall Street Journal tells donors to be suspicious of nonprofits who won’t provide details of how they gauge their results, you know there’s a sea change coming.
When I first wrote about GiveWell in February and said, “Why are the young members of the GiveWell project doing more to improve our shared knowledge base than The Ford Foundation?” and when I wrote in April that, “Fringe players like Holden (Karnofsky) are actually the real change agents (in philanthropy).” I never thought that by the end of the year, the New York Times would be quoting a GiveWell team member saying:
“There are huge foundations out there whose job it is to find great organizations doing great things,” said Robert Elliott, a club member who is now the Clear Fund’s chairman, “but when you call them and say you’d like to leverage the information they’ve already collected to make a smart donation, it’s a closed book.”
The IRS is focusing more and more on accountability and efficiency in the philanthropic sector. But with GiveWell being featured in the New York Times, Wall Street Journal, Chronicle of Philanthropy and Chicago Tribune in the last week, you have to start thinking about the cultural norms that these reports are creating.
When the LA Times wrote about the Gates Foundation investment policy earlier this year, the article created more movement on “aligned investing” in the foundation world than the IRS would ever accomplish through years of committee meetings.
Will the next LA Times exposé question why foundations are not sharing their philanthropic knowledge with the public and why two 26-year-olds with no philanthropic experience and a tiny budget seem to be doing the most to help donors?