Thursday, December 20, 2007
On Dec. 17 I wrote about effective charitable giving and the difficulty of evaluating charities. An article in today's New York Times, describes a new organization that seeks better - or different - information about charities. Two young hedge fund analysts, Holden Karnofsky and Elie Hassenfeld left the investment management company where they met to work full-time for the organization they created, GiveWell. The organization seeks data on charities in a particular sector and then analyzes the data to determine effectiveness. GiveWell's website says its goal is not to evaluate accounting data (money spent) but to evaluate results (lives changed). Another charity created by Karnofsky and Hassenfeld, the Clear Fund, supplies funding for GiveWell and also contributes to charities GiveWell identifies as effective.
Karnofsky and Hassenfeld say that they started GiveWell out of frustration with existing information. They worry that charities can manipulate data presented on 990s, the usual tool for evaluating charities, and that charities' own materials often don't provide the information the researchers want to find. Getting the data they want is difficult and time consuming, but this year they've already made recommendations in two areas: employment assistance for disadvantaged adults in NYC and saving lives in Africa. For the NYC research they examined information provided by 19 charities and recommended 5. For the Africa/health research they contacted 197 charities, received information from 59 and selected 12 finalists. The slow and intensive research process will limit the number of areas discussed, but for those areas selected for review by Givewell, the resulting information should be most helpful.