‘World’s best’ development NGO knocked off its perch

Written by Jonathan Pryke

Like many Australians I like to give a portion of my income to charity. It would come as no surprise that I also have a strong disposition towards development NGOs and giving overseas. But I often find myself confused with my options of who to give to, how much to give them, and why. I don’t know how the various NGOs compare to each other on the grounds of effectiveness and robustly proven impact, and find the transparency of many opaque to say the least. But I don’t have the time or patience to figure it out for myself, which is why GiveWell appealed to me.

GiveWell is a US based non-profit “dedicated to finding outstanding giving opportunities and publishing the full details of our analysis to help donors decide where to give.” They conduct in-depth research aiming to determine how much good a given program can accomplish in terms of saving or improving lives per dollar spent. They also have an extreme dedication to transparency. Rather than rating as many charities as possible, like charity navigator, they focus on a few charities that stand out the most on the criteria of:

  1. Strong evidence of positive impact on people’s lives
  2. Highly cost-effective activities
  3. Room for more funding
  4. Transparency and accountability to donors

From the over 240 NGOs they have reviewed to date they recommend three charities that you should give to (on a 7:2:1 split). While I’m not completely starry eyed about GiveWell (there are some legitimate questions and concerns), overall their assessment criteria, commitment to transparency and general reputation (they have a pretty great list of supporters) makes them seem like a better place than most to figure out where to start giving. When I first looked into GiveWell towards the end of last year the same NGO had retained the top position on their rankings for the past three years, and looked like a very appealing choice for a donation.

From 2011 until the end of 2013 the Against Malaria Foundation held the top spot in GiveWell’s rankings. The premise for AMF is simple; they deliver long-lasting insecticide-treated nets (LLIN) in large quantities to other organisations, which then distribute them in developing countries. Malaria kills over one million people a year (70% of whom are children under 5) and infects half a billion more. With a single LLIN costing under $10 to purchase and distribute, and the average cost of saving a life through aid estimated (conditionally) at $2,000, they are no doubt a good investment. (Naturally GiveWell has impressively documented the impacts of LLIN distribution.) On the surface this all looks great, AMF has a great track record, solid endorsements and a lot of potential. So why did it suddenly fall from grace?

The problem is that scale appears to have caught up with this relatively small outfit. GiveWell’s endorsement alone channelled roughly an extra US$10 million to the organisation. This sudden influx of funding has prohibited it from conducting distribution agreements with domestic organisations as it has done in the past (their largest prior distribution agreement was in the tune of $1 million). Instead the AMF has reached a scale that necessitates partnering with developing country governments to contribute to nation-wide distribution schemes. So far negotiations with partner governments have not been successful, likely thanks to alternatives such as the Global Fund operating in the same space with less stringent reporting requirements.

GiveWell discusses their decision to remove AMF from their list in great detail on their website, stating that the “decision does not reflect a negative view of AMF, but rather reflects room for more funding related issues”. Once AMF does secure a distribution agreement GiveWell may consider re-adding it to their list. AMF has posted a response to GiveWell’s decision on their website, admitting their mistakes but claiming there is still room for more funding as an agreement is reached. Regardless of who is right or wrong between AMF and GiveWell, until a distribution agreement is settled upon the $10 million will remain unallocated. There is still a case to be made that spending the funds effectively later is better than spending them ineffectively today.

Until an agreement is reached, however, I think I’ll take a look at one of GiveWell’s current three top charities.

Note: AMF has also applied for tax-deductibility status in Australia through the Government’s Overseas Aid Gift Deduction Scheme (OAGDS) and (while being approved for deductibility in 9 other countries) been rejected, twice. They have outlined their dealings with the OAGDS scheme in this blog post. None of GiveWell’s current top charities have tax-deductibility status in Australia.

Jonathan Pryke is a Research Officer at the Development Policy Centre.

image_pdfDownload PDF

Jonathan Pryke

Jonathan Pryke worked at the Development Policy Centre from 2011, and left in mid-2015 to join the Lowy Institute, where he is now Director of the Pacific Islands Program. He has a Master of Public Policy/Master of Diplomacy from Crawford School of Public Policy and the College of Diplomacy, ANU.

6 Comments

    • Hi Julia,

      Thanks for the comment. I actually wrote about GiveDirectly recently after reading that same blog post. You can find the ‘in brief’ here: https://devpolicy.org/in-brief/cooling-the-hype-on-cash-transfers-20140325/

      I think the post is excellent, and also liked Chris Blattman’s response (which i discuss in more detail in the link above). But I do still like the idea of Cash Transfers of this nature setting a baseline of effectiveness that NGOs and donors must meet in order to justify their work.. Though I will concede on your point that ‘best buys’ are difficult to assess, GiveDirectly certainly doesn’t make analysis of effectiveness any easier.

      Cheers,

      Jonathan

  • Thanks Sarah and Patrick for the comments.

    To begin with my post was not intended to be an affront to Australian NGOs or the ACFID Code of Conduct. I routinely give to multiple Australian-based NGOs, and of course think that people should give to whatever charity makes them happy.

    That said I have to disagree with the point that we need not look beyond Australian NGOs for giving. As I stated in my blog post I am interested in effectiveness and robustly proven impact, not where the NGO bases its operations.

    The ACFID code of conduct is a great minimum standard for Australian NGOs, but it also has over 130 organisations signed up to it. Based on my rationale above, a Code that is self-regulated and applicable to organisations both large, such as World Vision, and very small, such as Openaid 1000 villages, is simply not enough to convince me to give. I want to be able to see an NGO’s impact through publicly disclosed independent evaluations, rigorous monitoring of ongoing projects, and a high level of transparency. And preferably I’d like to not have to look into all of that myself, bringing me back to why Givewell was originally appealing.

    On Patrick’s point that agencies supported by Givewell don’t do well with OAGDS and DFAT’s criteria, it is likely because they have no Australian presence and thus aren’t eligible for tax deductibility. But it’s impossible to tell. The OAGDS system is horribly opaque and does not give out information on why individual cases for tax deductibility were accepted or rejected.

    With regards to some of the world’s largest development NGOs not scoring well with Givewell that might be because large doesn’t necessarily equate to good. Or it could be because NGOs of that size have no incentive in cooperating with Givewell’s stringent requirements for a few extra million in funding. Givewell also has other requirements, such as ‘room for more funding’, that may also preclude some of the larger players.

    Does this mean we should all be flocking away from Australian NGOs to give to the charities Givewell suggests? Of course not. People give money to NGOs for all kinds of reasons and rationales. Mine is simply to give money to the world’s best development NGO, regardless of where they operate from. But given the story outlined above about AMF’s recent history that seems far easier said than done.

    • Jonathan,

      I would like to elaborate on why I think there is a criteria disjuncture. Give Well does not seem to distinguish between welfare and development very well. They note they preferred to keep handing out bed nets rather than putting sustainable market for them in place. Thus the sustainability of the program comes into question.

      There is strong bias towards technical evidence as against qualitative methods. From GiveWell’s website: “Anecdotes and stories – often of individuals directly affected by charities’ activities – are the most common kind of evidence provided by charities we examine. We put essentially no weight on these”. This represents a huge bias towards technical programs and away from social change programs, and a poor understanding of qualitative methods. Their example of economic empowerment is a case in point: rather than looking at changes in power relations or agency (which can be done in a defensible manner), they narrowed it down to changes income, which says little about empowerment.

      The AMF ‘success’: Give Well notes that they did not interact with partners as well as they should. This was given a lighter weighting, but for OAGDS (the report of which is on AMFs website) this criteria was given much greater weighting as was sustainability.

      I think my point is that a debate with regard GiveWell and the OAGDS criteria (which are not opaque), the 140 Code criteria, and the Accreditation criteria would be valuable. I still think there is a large criteria disjuncture, with the various Australian assessment criteria giving greater weight to sustainability, partnership, and qualitative evidence than Give Well – but that may be the subject for a different blog..

  • Interesting that agencies that do very well on GiveWells criteria do not seem to do well on DFAT’s accreditation or OAGDS criteria and vice versa; including some of the world’s largest development NGOs. There seems to be a criteria disjuncture going on here. DFATs criteria are publically available on their website so a comparison can be made. I think potential Australian donors may think of looking to DFAT accreditation and ACFID Code compliance as alternative measures.

  • An interesting blog which raises the important questions of transparency, credibility and who we choose to donate to. But why look overseas when Australia has the Australian Council for International Development’s (ACFID) Code of Conduct?

    The ACFID Code of Conduct is a voluntary, self-regulatory sector code of good practice that aims to improve international development outcomes and enhance transparency and accountability of signatory organisations.

    The Code sets out standards for accountability in program principles (including aid effectiveness and human rights), public engagement (transparency and ethical behaviour in marketing, fundraising and reporting) and organisation (including financial controls, governance and management of staff and volunteers). It is regulated through self-assessment, annual compliance checks and a public complaints system.

    ACFID does not present Code signatories in a league table. It is difficult and often unhelpful to compare a small NGO working to provide education or healthcare to a group of villages in Kenya, for example, to the multi-national, multi-cause NGOs that are familiar to us all, such as UNICEF, CARE or Oxfam. The diversity of ACFID Code signatories reflects the broad range of sizes, causes and unique approaches to development that exists in the Australian international NGO sector.

    People donating to NGOs working overseas may have a particular attachment to a country or continent or to a cause (eg. education or women’s rights). ACFID encourages the public to find an organisation that reflects their values and passions. Australians can be confident that Code signatories are commited to and tested against high ethical standards. We also suggest each person do their homework by reading their chosen organisation’s annual report, websites and other information and making their own choices.

    There is no need to look to overseas to find a group of international development NGOs committed to transparency and effectiveness when there are over 130 Australian NGOs who are signatories to the ACFID Code of Conduct.

    Sarah Burrows
    ACFID Code Quality and Effectiveness Co-ordinator
    http://www.acfid.asn.au

Leave a Comment