Tips on disaster relief giving

With the tragedy in Nepal, I turned to GiveWell, as usual, for some guidance on how best to contribute to the relief effort. GiveWell doesn't have any specific research for Nepal, yet, but they reposted their general tips on disaster relief giving.

5. Give to organizations that are transparent and accountable. In general, we’ve found that relief organizations disclose very little about what activities they undertake and how they spend relief funds (more at our reports on the 2010 Haiti earthquake and the 2011 Japan tsunami). In general, when a disaster strikes, the first organizations we turn to are:
  • Doctors Without Borders (MSF), which has distinguished itself with well-above-average transparency in both of the cases listed above. In the case of the 2011 Japan tsunami, it straightforwardly disclosed that it was not seeking more funding for use in the relief effort, and was one of the only organizations to do so. We believe it’s worth rewarding MSF for its unusual transparency, and if it doesn’t use your money on this disaster, it will likely use it to address a less-publicized crisis.
  • The local Red Cross. The Red Cross generally takes a leading role in a relief effort and (it seems to us) is assigned credit/blame for how the overall effort goes, to a greater degree than other nonprofits. The American Red Cross will often redirect donations to the local Red Cross, minus a sometimes-substantial fee.
We wrote more about these two options when we made recommendations about how to respond to the 2011 Japan earthquake/tsunami.
 

I didn't realize American Red Cross took a big when redirecting donations to other countries. That seems...uncharitable.

And, as always, this is a useful reminder.

6. Think about less-publicized suffering. Every day, people die from preventable and curable diseases, in many cases because they lack access to proven life-savers such as insecticide-treated nets. Their day-to-day suffering isn’t well-suited to making headlines, and they generally don’t attract the attention and dollars that disaster relief victims do – yet we believe that donations targeting these populations do more good than disaster relief donations.

Giving Tuesday

Just in time for Giving Tuesday, GiveWell has updated its list of top charities:

Our top charities are (in alphabetical order):

We have recommended all four of these charities in the past.

We have also included four additional organizations on our top charities page as standout charities. They are (in alphabetical order):

In the case of ICCIDD, GAIN-USI, and DMI, we expect to learn substantially more in the coming years (both through further investigation and through further progress by the organizations); we see a strong possibility that these will become top-tier recommended charities in the future, and we can see reasons that impact-minded donors could choose to support them today.

...

Based on this allocation, for any donors looking to give as we would, we recommend an allocation of $5 to AMF, $1 to SCI, $1 to GiveDirectly and $.50 to DtWI for every $7.50 given.

It's worth reading through the entire post to understand how they make their decisions and to learn about key principles such as diminishing marginal returns and the funding gap.

The psychology of charitable donations

One of the better Planet Money episodes in recent memory: Why Raising Money for Ebola is Hard. Doctors Without Borders in Africa is overwhelmed with the latest outbreak. Donations would help, but they are at a trickle.

As Atul Gawande and many others have noted, containing Ebola in its current form is actually quite straightforward.

This relatively weak transmissibility makes the standard public-health technique of contact-tracing effective in halting the disease. Track down the people who’ve been in contact with a sick patient; measure their temperatures and check on them daily for twenty-one days; if any turn up with a fever or looking sick, put them into isolation. Once you get anywhere upward of seventy per cent of the contacts under such surveillance, the disease stops spreading.

Thiss podcast dissecting why so few people donate to help fight Ebola helps to unpack the donor psychology behind fundraising for disasters:

  • The Planet Money episode notes that 90% of donations for disaster relief occur within 90 days of the disaster. But that's contingent on the disaster being sudden, massive, and prominent in a short period of time. Sudden and dramatic disasters, like 9/11 or the Haiti earthquake, are ideal for spurring a massive influx of donations. But a disease that starts with one person and spreads slowly like Ebola can't concentrate world attention the same way, no matter how many people it spreads to over time. The bitter irony is that when this round of Ebola first broke out, donations would have had the greatest leverage because the disease could've been isolated contained much more easily then.

  • People react to visible evidence of severity. Slow building disasters like Ebola lull people into complacency. People have a finite store of charity, and Ebola hasn't generated any iconic horrific imagery to push donors over their emotional tipping point.

  • People don't understand exponential math that well. This outbreak of Ebola may have an R0 or “R-nought” of 1 or even as high as 2. That means it could spread at an accelerating rate. “Should the outbreak continue with recent trends, the case burden could gain an additional 77,181 to 277,124 cases by the end of 2014.” That's still not as intuitive to most people as the tens of thousands of people who died in Haiti the first day of the earthquake.

  • People don't like to contribute to preventative measures, they want their money to make things better immediately. For example, as noted in the podcast, it's almost impossible to raise money to head off a famine that everyone can see coming. People won't donate until people are actually starving.

  • Africa is far away from America and many other first-world countries. Disasters close to home draw more donations. Out of sight, out of mind. I suspect most Americans don't personally know anyone who has been killed by Ebola.

  • Given the irrational lumpiness of charitable donations for disasters noted above, when massive galvanizing disasters do occur, we should capitalize on the spike in charity and allow the organizations on the receiving end of that aid the freedom to hold back some of the funds to allocate to future disasters. Charities would operate more like insurance, or an endowment. The Red Cross tried this after 9/11, but donors erupted in outrage and the head of the Red Cross had to resign.

Not to be glib, but it almost feels like Ebola could benefit from a staged dramatic event to serve as a catalyst to mobilize world sympathy. Or Ebola needs its version of the Ice Bucket challenge, a meme which spurred a vast outpouring of donations for ALS without any precipitating disaster. 

Wisdom of the crowds doesn't seem to apply when it comes to allocation of charitable donations.

GiveWell doesn't have any article about the most worth charities combatting Ebola, but Vox linked to a list from the U.S. Agency for International Development. Among the list is Doctors Without Borders/Medecins Sans Frontieres (MSF), and they've posted a page on their efforts to combat Ebola. That's my choice. GiveWell says of MSF: “We have a positive view of MSF and have recommended them for disaster-relief donations in the past.”

Is giving directly best?

I've written before about effective charity, specifically focusing on optimal strategies for doing the most good. GiveWell still ranks GiveDirectly as its top charity right now.

In the Stanford Social Innovation Review, Kevin Starr & Laura Hattendorf express their doubts.

But is GiveDirectly’s model, as Slate put it: “the best and simplest way to fight poverty”?

No. It’s an experiment—an important one, but an experiment nonetheless. We hope we’re wrong, but our hunch is that it is more of a 1-year reprieve from deprivation than a cost-effective, lasting “solution to poverty.”

Poor people are poor because they don’t have money, and so we think unconditional cash transfers should be judged primarily by how much money recipients are making a few years out from the windfall. GiveDirectly’s work in Kenya is too new to know that, but cash-transfer enthusiasts like GiveWell point to other studies of other cash-transfer programs and predict a slam-dunk.

We looked at those studies, and we’re puzzled as to why GiveWell’s analysts, who rightly prize impact and cost-effectiveness, chose GiveDirectly as one of their “Top Charity” trinity. In the most relevant, longer-term study that GiveWell cited—a program working with unemployed youth in Uganda—recipients of an initial $382 grant had a 41 percent greater monthly income 4 years out. This sounds like a big return on the donor’s dollar.

It’s not. Working out the cost-effectiveness of income-generating funding can be confusing, and we at Mulago find it useful to benchmark grants by calculating the amount of additional income over 3 years, divided by the amount of grant money it took to generate it: the income bang for the donor buck. Of the baseline income of those youth, 41 percent turns out to be $11 per month. By that calculation ($11 per month x 36 months ÷ $382), the unconditional cash grant produced $1.03 of additional income over 3 years per donor dollar, essentially a wash.
 

Chris Blattman responds with several points, two of my favorites being the following.

1. Victory! If it’s becoming standard to judge interventions by their cost effectiveness, then I can’t be more thrilled. Same goes for GiveDirectly. You can think of cash transfers like the index fund of development (making GiveDirectly the Vanguard). If the NGOs (money managers) of the world can outperform the index funds, then the world becomes a better place.

...

3. Scalable? Whether these other interventions prove as scalable or replicable as cash is another question. Too many NGOs search for solutions to help 1,000 people a year not 1,000,000. But I’m confident some alternatives to cash will prove promising. Some already are, from vaccines to election monitoring, if only because they solve the problems cash cannot. I’m more skeptical we’ll see better alternatives for pure poverty-alleviation, but we’ll see.
 

I'd never thought of cash transfers as the index fund of charity, but it's a useful analogy. If you can't do better than giving someone cash, then give someone cash.

In Asian cultures, the most common wedding gift is cash. When I was younger that seemed like a gift for the creatively deficient, but at its heart is also a genuine pragmatism that signals the unselfish nature of the giver.

Giving this Black Friday

My Twitter timeline sounded like one long anti Black Friday diatribe today. I would certainly never think of venturing out on Black Friday to an actual store to find the angry mobs. The best deals can almost all be found online anyway.

If the sheer consumerism of it has still got you down, though, an antidote is to use this day to contribute to a charity. I've written before about GiveWell, a site that analyzes charities for how much actual good they do with each dollar you contribute. At the time, its top choice was Against Malaria Foundation, but even GiveWell noted at the time that eventually AMF would run into diminishing returns.

That time has come, at least according to GiveWell. Its new top-ranked charity is the one that was in second place behind AMF before: GiveDirectly. From GiveWell's review:

GiveDirectly (www.givedirectly.org) transfers cash to households in the developing world via the M-PESA mobile phone-based payment service. It targets extremely low-income households and aims to deliver at least 90 cents directly to recipients for every $1.00 in total expenses. (More)

GiveDirectly is a recommended organization because of:

  • Its focus on cash transfers: delivering 90% of all expenses directly to extremely low-income people in the developing world. We feel that this intervention faces an unusually low burden of proof, though donors' intuitive reactions to it may vary widely. The evidence that such transfers increase short-term consumption, especially of food, is very strong, and there is more limited evidence that such transfers may be invested at very high rates of return (e.g. ~20% annually). (More)
  • Its documented success, to date, in reaching its 90% target, and what we perceive as a strong (and evolving) process for ensuring that cash is well-targeted and efficiently delivered. (More)
  • Its strong transparency and commitment to self-evaluation. Among other things, GiveDirectly has two high-quality studies of its impact ongoing, and has taken the unusual step of making the details of these studies public before data is collected. (More)
  • Room for more funding - we believe that GiveDirectly can use substantial additional funding productively, both for its core work of delivering cash and for investigative work on refining its (new and unusual) approach. (More)

What's interesting about GiveDirectly is that it marks a shift in thinking around charitable contributions. Many Americans are conditioned to distrust direct cash transfers, having long been told that doling out cash to the homeless on the streets is tantamount to handing over a bottle of booze or a drug-filled syringe.

The latest research on direct cash transfers, however, is promising. The shift from health interventions to direct cash transfers reminds me of the difference between active and passive investment management. Health interventions would seem to require more overhead whereas cash transfers should, in theory, be lighter weight to administrate.

But more than that, the shift away from a paternalistic model of giving feels like a form of giving predicated on faith in those less fortunate. Rather than prescribe how the recipient receive your contribution, let them choose how best to spend the donation.

Not all are believers, though, so two forms of cash transfer exist: conditional cash transfers (CCTs) and unconditional ones (UCTs).

But it highlights the virtues of no-strings grants (UCTs). They work when lack of money is the main problem. The people who do best are those with the least to start with (in Uganda, that especially means poor women). In such conditions, the schemes provide better returns than job-training programmes that mainstream aid agencies favour. Remarkably, they even do better than secondary education, which pushes up wages in poor countries by 10-15% for each extra year of schooling. This may be because recipients know what they need better than donors do—a core advantage of no-strings schemes. They also outscore conditional transfers, because some families eligible for these fail to meet the conditions through no fault of their own (if they live too far from a school, for instance).

Does this mean that governments are wasting time and money by monitoring and enforcing conditions, when handing over cash would be just as good? Not so fast. Perhaps because cash is all-important to unconditional schemes, they tend to be more generous and expensive than CCTs. The grants of the Kenyan programmes, for example, are the equivalent of two years’ local income. In contrast, the stipend of the world’s biggest conditional scheme, Brazil’s Bolsa Família, is worth 3% of average Brazilian incomes. For $1,000, therefore, you could help one poor Kenyan a lot, or three poor Brazilians a bit—even though Brazil is a far more expensive country. Which is better? The answer depends more on the recipients than on the programmes: whom do you want to help and what problems do they face?

Moreover, CCTs can focus on something which UCTs leave to chance: helping the next generation. Healthier, better educated children earn more throughout their lifetimes, so the requirement to attend school or clinics should cut future poverty. UCTs aim to reduce poverty now. So conditional and unconditional schemes are not always comparable. That said, a lot of effort has gone into making comparisons, and the results are now emerging. CCTs have their drawbacks but—at least where governments are concerned, and if you take a broad definition of poverty reduction to include health and education—they usually do a better job.

If you're not sold on cash transfers, GiveWell's other top-rated charity is of the more familiar health intervention model: Schistosomiasis Control Initiative (SCI), which treats children for parasite infections in sub-Saharan Africa. They're not registered as a charity in the U.S. but you can contribute to them through GiveWell.

Earning to give

From "Join Wall Street. Save the World.

Jason Trigg went into finance because he is after money — as much as he can earn.

The 25-year-old certainly had other career options. An MIT computer science graduate, he could be writing software for the next tech giant. Or he might have gone into academia in computing or applied math or even biology. He could literally be working to cure cancer.

Instead, he goes to work each morning for a high-frequency trading firm. It’s a hedge fund on steroids. He writes software that turns a lot of money into even more money. For his labors, he reaps an uptown salary — and over time his earning potential is unbounded. It’s all part of the plan.

Why this compulsion? It’s not for fast cars or fancy houses. Trigg makes money just to give it away. His logic is simple: The more he makes, the more good he can do.

He’s figured out just how to take measure of his contribution. His outlet of choice is the Against Malaria Foundation, considered one of the world’s most effective charities. It estimates that a $2,500 donation can save one life. A quantitative analyst at Trigg’s hedge fund can earn well more than $100,000 a year. By giving away half of a high finance salary, Trigg says, he can save many more lives than he could on an academic’s salary.

Fascinating article.

Among other tidbits of note: GiveWell, which analyzes charities for actual effectiveness in changing lives with each of your donated dollars, rates Against Malaria Foundation as the single most worthy charity. Their second ranked charity is GiveDirectly, which essentially just transfers your donation to a poor household in Kenya. They have only 2 employees and 8% overhead.

As for Peter Singer, he is fully supportive of earning to give. 

And [Singer] embraces earning-to-give as among the most ethical career choices one can make, more moral than his own, even. “There is a relatively small group of philosophers who actually have a big influence,” he says from his home in Australia. “But otherwise, the marginal difference that you’re going to make as a professor of philosophy compared to somebody else is not all that great.”

Some further discussion of this article here