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GiveWell and Money Moved

January 13th, 2012

Without thinking about it much, I had assumed GiveWell tracked 'money moved' primarily so they could tell how they were doing. The more money their top charities receive that is directly attributable to GiveWell, the more of an effect they're having. While it does fill this role, after talking to Holden [1] my understanding is that's it's actually more useful than this.

Most reviews don't require substantial cooperation from the organization being reviewed. A restaurant reviewer shows up, ideally appearing just as any other customer, orders various things, and reports back on the experience. Consumer Reports buys a bunch of blenders, tests them against each other, and publishes a story on the best blenders. But charities are different: you need them to work with you to get the data you need to evaluate them. If you can say "in 2010 we moved over $1M to our top rated charity," they're going to be much more willing to do this work than if all you can say is "we're reviewing charities so people can see where they do best to donate." This is especially true when you intend to publish reviews that talk honestly about failings: charities are very cautious about admitting imperfection.

This is also why they push so much for people to give through their website: it lets them track how much money they're moving. I know many people aren't so excited about tracking, but this is a case where I think it's really helpful.

Update 2012-11-04: GiveWell just posted something similar.

[1] After Julia posted on picking a cause, he wrote to her and asked if she would like to talk. The three of us talked for about 45min last night, and he mostly convinced me that giving to AMF or SCI was better than to Oxfam, IPA, or J-PAL.

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