Why Charity Entrepreneurship?

Co-authored by Kieran Greig, Joey Savoie and Katherine Savoie.

A number of considerations suggest that charity entrepreneurship aiming to start an evidence-based, cost-effective charity is a very high impact thing to do. The main ones are:

Experts agree with this proposition.
The evidence exists to identify a cost-effective intervention.
The charity market doesn’t efficiently capitalise on existing evidence-based, cost-effective interventions.
There are sufficient structures in place to research, pilot, test and scale a new evidence-based, cost-effective charity.

There are also lesser considerations suggesting that charity entrepreneurship is a very high impact thing to do. These lesser considerations include:

There is reason to believe that GiveWell top charities may in future lack room for more funding.
There is reason to believe that founding a new evidence-based, cost-effective charity could spread effective giving to more people.
Some Charity Science staff and board members feel they’re well suited to act on all of the above considerations.

Experts agree with this proposition

In the past some GiveWell staff have been positive towards charity entrepreneurship. For instance, Holden Karnofsky mentioned charity entrepreneurship is a high impact altruistic career choice. There are prominent voices within the EA community who feel that founding what could become a GiveWell top charity is a high impact thing to do (see here). In addition, 80,000 hours has long thought that founding an effective global poverty nonprofit is a high impact career choice. These views are supported by private conversations with people outside of effective altruism but heavily involved in evidence-based charities and by the views of some staff and board members of Charity Science. However, we put the most significant weight upon a recent GiveWell blog post which calls for high quality charities to work on a number of priority interventions and strongly suggests that they think this is a high impact thing to do.

The evidence exists to identify a cost-effective intervention

Randomized control trials by IPA and J-PAL, the transparent and rigorous research by GiveWell, and the systematic evaluation by the Disease Control Priorities Project have significantly contributed to an existent evidence base that allows for the identification of a number of cost-effective interventions. It seems likely that communication with knowledgeable people will help fine tune proposed interventions and groups exist to partner with in order to evaluate the effectiveness of the proposed interventions. Gapminder complements these resources by allowing for the analysis of macro trends. We put the most significant weight upon GiveWell’s identification of a number of priority programs where an evidence-based, cost-effective charity could exist and feel that this list makes for an excellent place to begin research from. With these available resources it seems likely a group could identify an evidence-based, cost-effective intervention.

The charity market doesn’t efficiently capitalise on evidence based cost effective interventions.

Very few charities are started to be high impact and evidence-based, with Evidence Action’s method being a notable exception. Even some of GiveWell’s top charities weren’t started to be highly effective but rather as a result of circumstances came upon what was a cost-effective intervention. Most charities are instead founded off exciting ideas or pet theories rather than a search of the scientific literature and understanding of what experts think a high impact charity is. Moreover, few people with utilitarian values and an empirical epistemology have founded a charity.

This notion is heavily supported by GiveWell’s identification of multiple priority programs which don’t have a promising charity that focuses on them. This includes cases where charities working on priority programs don’t have satisfactory evidence for their track record or are hesitant to share information. GiveWell also notes that they would be excited to see more charities attempt bednet distribution, deworming programs and cash transfers.

That so few charities are attempting these evidence-based, cost-effective interventions makes us think that the existing charity market is far from efficient. Luke Muehlhauser notes this might be because most people don’t seem to care what their donations achieve and that it’s difficult to know what a donation does achieve. Elsewhere, GiveWell mentions other factors contributing to this, including that most charities don’t focus on directly delivering a small number of programs, it’s rare to rigorously evaluate the outcomes of programs and the prevailing culture is one in which criticism is frowned upon and a lack of transparency is the norm. The resulting inefficiencies within the charitable market suggest the counterfactual of an evidence-based, cost-effective charity would be a significant period of time where no group acted in a similar manner. It also suggests that there may be low hanging fruit in the area of evidence-based, cost-effective charities.

There are sufficient structures in place to research, pilot, test and scale a new evidence-based, cost-effective charity.

Significant interest expressed in this subject within the EA community, private conversations with others in the EA community, the possible use of an EA incubator and possible funding from EA Ventures makes us feel it likely that adequate support exists for this project in its earliest stages. GiveWell’s interest and possible funding from the Open Philanthropy Project, Good Ventures, the Global Innovation Fund, Evidence Action, the Gates Foundation and the Children’s Investment Fund Foundation makes us feel it likely that this project will receive adequate funding in its early and middle stages. In addition to the previously mentioned sources, the possibility of partnering with IPA or J-PAL makes us feel it likely that there exists adequate support for the testing stage of this project. Lastly in combination with previously mentioned funding sources, the possibility of becoming recommended by GiveWell, Giving What We Can, The Life You Can Save and Charity Science makes us feel that there will be adequate funding for this project in the scaling phase. With all these available resources it seems likely that an evidence-based, cost-effective charity could achieve a large scale.

Evidence that a lack of room for more funds may be a problem within existing GiveWell top charities.

In 2013 GiveWell removed the Against Malaria Foundation as a top charity because it lacked room for more funding. With the funding capacity of Good Ventures this could happen with other top charities, particularly given Good Ventures’ $25 million grant to GiveDirectly earlier this year. This is compounded by the growing size of the effective altruist movement. In this context a new charity able to absorb a large amount of funding could be very beneficial.

A new evidence-based, cost-effective charity could bring effective giving to more people and institutions.

In conversation GiveWell conveyed that another top charity could result in more dollars moved to top charities overall and this was justified by it being the case for GiveDirectly. Interestingly GiveDirectly’s intervention of unconditional cash transfers may in future be used as a standard comparison in the randomized control trials of poverty interventions conducted by IPA and J-PAL. This could spread effective giving and similarly sized flow through effects may exist for identifying and executing another evidence-based, cost-effective intervention. It also seems reasonable to suggest that people who fundraise for effective giving would be aided by an additional top charity as a greater variety of charities to fundraise for may allow for catering to more preferences. GiveWell may also receive slightly more media coverage as a result of the addition of a new top charity.

Some Charity Science staff and board members feel like they are well suited act on the above considerations.

Some Charity Science staff and board members feel charity entrepreneurship is a good personal fit for their personalities, interests and abilities. We are willing to stop working on projects that appear ineffective, we have low living costs, are familiar with GiveWell content and are part of a network capable of funding this project. As EAs we will take into account considerations others won’t, will be transparent and possess relevant experience from our involvement with and founding of Charity Science. We also feel it’s possible that as a team we could engage in serial entrepreneurship and be involved in starting several useful organizations.

The reasoning outlined in this post forms a significant part of why some of the Charity Science staff and board members will pursue founding an evidence-based, cost-effective charity, aiming for it to become GiveWell recommended. In future, we plan to write more on our methodology, crucial considerations and promising interventions.