1. How We Pick Problems
We focus on problems that (i) cause immense suffering to large numbers of people, (ii) can in principle be solved using interventions backed by rigorous evidence, and (iii) currently get insufficient attention and funding. This naturally leads us to problems where the best evidence exists for impactful and cost-effective solutions, such as access to basic healthcare.
However, we also consider problems where the possibility of impact might be low, or where the impact of particular solutions is hard to measure or attribute, if:
- the problem is consistently identified as important by the ultimate recipients of our philanthropic efforts, i.e. the global poor; or
- there is a base of ‘locked-in’ or committed donors, whose money can be moved from low to high-impact solutions such that it is very cost-effective in terms of impact per dollar.
We group problems into “cause areas” based on what outcomes they affect, and for whom. Currently, we track four core outcomes:
- Lives saved, for example, due to less disease or better healthcare;
- Years of quality life added, or disability-adjusted life years (DALYs) averted, for example through better nutrition or corrective surgery;
- Income gained, due to improved economic opportunity; and
- Carbon removed, through lower emissions or carbon capture.
We also currently pay special attention to two populations:
- Women and girls, notably their access to sexual and reproductive health and socioeconomic empowerment; and
- Emergency populations dealing with humanitarian crises stemming from conflict and natural disasters.
2. How We Identify Impactful Solutions
We seek to find the most impactful solutions—from plugging basic holes in service delivery, to bringing new solutions to market, to changing laws and policy. Most of these solutions are in poor countries, since the global poor experience basic deprivations for which cheap solutions already exist—vitamin supplements, vaccines, mosquito nets, etc. A notable exception is climate change, where changing rich country policies is likely to have the biggest impact.
To find these solutions we look to the scientific literature, building on the work done. We seek the best quality evidence possible, given (i) what solutions are most impactful in a particular cause area (e.g. policy advocacy to change energy policy), and (ii) the programming and strategy of each charity—e.g. RCTs for direct delivery of health services, carbon market analysis and policy review for climate change advocacy interventions, etc.
While this means that charities pursuing different strategies will be held to different standards of rigor, we think this is worth it in light of the tradeoff between certainty and scale of impact—for example, providing direct services bears relatively less risk but has an impact at the same order as the intervention, while working with the government or private sector to scale effective interventions, or advocating for policy or systems change are riskier and harder to measure, but could have much larger-scale impacts.
This approach also enables us to mobilize non-neutral funds from donors who are committed to particular strategies or who have different risk profiles. When these donors make a giving decision, they can choose to find charities where the scale of potential impact is proportional to the uncertainty involved.
3. How We Find Great Charities
We try to find outstanding charities definitively focused on our priority cause areas working on the most impactful solutions. Our recommended charities must be extraordinarily cost-effective at implementing these solutions, in terms of its impact on the problem per dollar spent; and must meet the highest standards of integrity and transparency.
We build a pool of charities using different sources, and then vet them in-house before considering whether or not to recommend them. We source our charities based on research done by other charity evaluators such as GiveWell, Giving Green, and Founders Pledge, and also look to recipients of funders that rigorously evaluate their grant recipients (e.g. MITxSolve, Focusing Philanthropy, Mulago Foundation).
We are open to considering organizations that implement multiple interventions, based on a general sense that those with a track record of doing one thing extraordinarily well are reasonably likely to do other things reasonably well. When funding such organizations, we try to strike a balance between giving them space to innovate within the broad program or “vertical” in which they have demonstrated outstanding impact, and holding them to the highest standards for demonstrating impact. If an organization ceases to implement the most cost-effective intervention, or radically changes the approach through which it is delivered, we will reconsider recommending it.
First we assign a core outcome (“lives saved”, “income gained”) to each charity against which its cost-effectiveness is measured. We then construct a cost-effectiveness model that lays out all the steps from providing the charity money to the impact on the core outcome, and use published scientific evidence, charity data, and third-party cost-effectiveness analyses to assign numbers to the dollar cost of each step and the estimate of its impact.
Along the way, we add appropriate discounts for two types of risk: (i) impact risk: how likely the intervention will meaningfully impact a given problem; and (ii) implementation risk: the extent to which the charity in question can implement the intervention successfully.
We use the model to generate two measures of cost-effectiveness: (i) dollars per output and (ii) dollars per outcome. The first measure allows us to compare charities producing identical outputs—for example, bed nets—to find the charities that are the best at delivering this intervention. The second allows us to compare charities trying to influence common outcomes using different kinds of outputs, from fewer road accidents to seasonal chemoprevention.
When we consider adding new charities to a cause area, we use currently recommended charities as the benchmark for cost-effectiveness.
Since all cost-effectiveness calculations are built on a wide range of subjective assumptions, we use this kind of analysis to make sure that the charity is cost-effective within some reasonable range—for example, compared to other charities seeking to change the same outcome. We do not claim that an intervention or the organization that implements it is the most cost-effective, but rather that it is a great bet and donating to support it is highly likely to do good.
We ensure that our recommended charities conform to widely accepted governance and financial management standards, have robust monitoring and evaluation systems and learn from these systems, regularly experiment with ways to increase its impact, and produce knowledge to inform policymakers and other implementers.
We also consider additional criteria, including organizational stability, room for funding, and idiosyncratic opportunities for funding to have a high impact, e.g. t0 offset unanticipated shocks or improve the evidence base. These will feature as part of a new and improved biannual due diligence process.
We use this data to ensure that our donors’ money is having the greatest impact at any given moment and that our recommended charities are able to consistently improve, innovate, and build better evidence.