Another issue is if multiple charities are working on the same issue, and cooperating, there might be times when a particular charity actively chooses to take less cost-effective actions in order to improve movement wide cost-effectiveness. This happens frequently with the animal welfare corporate campaigns. For example:
Charity A has 100 good volunteers in City A, where Company A is headquartered. To run a campaign against them would cost Charity A $1000, and Company A uses 10M chickens a year. Or, they could run a campaign against Company B in a different city where they have fewer volunteers for $1500.
Charity B has 5 good volunteers in City A, but thinks they could secure a commitment from Company B in City B, where they have more volunteers, for $1000. Company B uses 1M chickens per year. Or, by spending more money, they could secure a commitment from Company A for $1500.
Charities A and B are coordinating, and agree that Companies A and B committing will put pressure on a major target (Company C), and want to figure out how to effectively campaign.
They consider three strategies (note—this isn’t how the cost-effectiveness would work for commitments since they impact chickens for longer than a year, etc, but for simplicity’s sake):
Strategy 1: They both campaign against both targets, at half the cost it would be for them to campaign on their own, and a charity evaluators views the victories as split evenly between them.
Charity A cost-effectiveness: (5M + 0.5M Chickens / $500 + $750) = 4,400 chickens / dollar
Charity B is also 4,400 chickens / dollar.
$2500 total spent across all charities
Strategy 2: Charity A targets Company A, and Charity B targets Company B
Charity A: 10,000 chickens / dollar
Charity B: 1,000 chickens / dollar
$2000 total spent across all charities
Strategy 3: Charity A targets Company B, Charity B targets Company A
Charity A: 667 chickens / dollar
Charity B: 6696 chickens / dollar
$3,000 total spent across all charities
These charities know that a charity evaluator is going to be looking at them, and trying to make a recommendation between the two based on cost-effectiveness. Clearly, the charities should choose Strategy 2, because the least money will be spent overall (and both charities will spend less for the same outcome). But if the charity evaluator is fairly influential, Charity B might push hard for less ideal Strategies 1 or 3, because those make its cost-effectiveness look much better. Strategy 2 is clearly the right choice for Charity B to make, but if they do, an evaluation of their cost-effectiveness will look much worse.
I guess a simple way of putting this is—if multiple charities are working on the same issue, and have different strengths relevant at different times, it seems likely that often they will make decisions that might look bad for their own cost-effectiveness ratings, but were the best thing to do / right decision to make.
Also, on the matching funds note—I personally think it would be better to assume matching funds are truly match rather than not. I’ve fundraised for maybe 5 nonprofits, and out of probably 20+ matching campaigns in that period, maybe 2 were not truly matches. Additionally, often nonprofits will ask major donors to match funds as a way to encourage the major donor to give more (e.g. “you could give $20k like you planned, or you could help us run our 60k year end fundraiser by matching 30k” type of thing). So I’d guess that for most matching campaigns, the fact that it is a matching campaign means there will be some multiplier on your donation, even if it is small. Maybe it is still misleading then? But overall a practice that makes sense for nonprofits to do.
Another issue is if multiple charities are working on the same issue, and cooperating, there might be times when a particular charity actively chooses to take less cost-effective actions in order to improve movement wide cost-effectiveness. This happens frequently with the animal welfare corporate campaigns. For example:
Charity A has 100 good volunteers in City A, where Company A is headquartered. To run a campaign against them would cost Charity A $1000, and Company A uses 10M chickens a year. Or, they could run a campaign against Company B in a different city where they have fewer volunteers for $1500.
Charity B has 5 good volunteers in City A, but thinks they could secure a commitment from Company B in City B, where they have more volunteers, for $1000. Company B uses 1M chickens per year. Or, by spending more money, they could secure a commitment from Company A for $1500.
Charities A and B are coordinating, and agree that Companies A and B committing will put pressure on a major target (Company C), and want to figure out how to effectively campaign.
They consider three strategies (note—this isn’t how the cost-effectiveness would work for commitments since they impact chickens for longer than a year, etc, but for simplicity’s sake):
Strategy 1: They both campaign against both targets, at half the cost it would be for them to campaign on their own, and a charity evaluators views the victories as split evenly between them.
Charity A cost-effectiveness: (5M + 0.5M Chickens / $500 + $750) = 4,400 chickens / dollar
Charity B is also 4,400 chickens / dollar.
$2500 total spent across all charities
Strategy 2: Charity A targets Company A, and Charity B targets Company B
Charity A: 10,000 chickens / dollar
Charity B: 1,000 chickens / dollar
$2000 total spent across all charities
Strategy 3: Charity A targets Company B, Charity B targets Company A
Charity A: 667 chickens / dollar
Charity B: 6696 chickens / dollar
$3,000 total spent across all charities
These charities know that a charity evaluator is going to be looking at them, and trying to make a recommendation between the two based on cost-effectiveness. Clearly, the charities should choose Strategy 2, because the least money will be spent overall (and both charities will spend less for the same outcome). But if the charity evaluator is fairly influential, Charity B might push hard for less ideal Strategies 1 or 3, because those make its cost-effectiveness look much better. Strategy 2 is clearly the right choice for Charity B to make, but if they do, an evaluation of their cost-effectiveness will look much worse.
I guess a simple way of putting this is—if multiple charities are working on the same issue, and have different strengths relevant at different times, it seems likely that often they will make decisions that might look bad for their own cost-effectiveness ratings, but were the best thing to do / right decision to make.
Also, on the matching funds note—I personally think it would be better to assume matching funds are truly match rather than not. I’ve fundraised for maybe 5 nonprofits, and out of probably 20+ matching campaigns in that period, maybe 2 were not truly matches. Additionally, often nonprofits will ask major donors to match funds as a way to encourage the major donor to give more (e.g. “you could give $20k like you planned, or you could help us run our 60k year end fundraiser by matching 30k” type of thing). So I’d guess that for most matching campaigns, the fact that it is a matching campaign means there will be some multiplier on your donation, even if it is small. Maybe it is still misleading then? But overall a practice that makes sense for nonprofits to do.