3 ways evidence-minded donors can prioritize their giving

The idea that interventions should meet a certain level of cost-effectiveness to be worth funding is popular among tech-oriented philanthropic donors who believe in “effective altruism,” or seeking to do the most good with every dollar spent. Open Philanthropy, founded by billionaire donors Dustin Moskovitz and Cari Tuna, is among the organizations leading the charge in this area, employing a methodological approach to identifying grant opportunities that could have the most impact on specific causes. The organization has reportedly provided $1.5 billion in grants since 2014 and plans to accelerate its giving by providing an additional $1 billion during 2022 and 2023. On Wednesday, Open Philanthropy co-CEO Alexander Berger and research fellow Peter Favaloro discussed its approach to determining which causes to prioritize and how that might evolve as the organization raises more funds. Open Philanthropy recently updated its "Global Health and Wellbeing Cause Prioritization Framework” — a highly technical explanation of how the organization compares different kinds of grant-making opportunities to improve people’s lives. Among the changes are how it compares health and income gains. For example, the updated framework increases the weight of life expectancy gains relative to income gains, meaning interventions that improve life expectancy will now have higher value. The discussion was hosted by the Center for Global Development, which receives funding from Open Philanthropy. Here’s its advice for evidence-minded donors: Identifying impactful grant opportunities Favaloro said Open Philanthropy takes a “fairly quantitative” approach to prioritizing causes. “So, instead of just sort of off-the-cuff deciding what issue areas we’re going to work in and then trying to find the best grants within that, we’re actually trying to think from the ground up, which issue areas can we have the most impact in our grant-making,” he said. To maximize the beneficial impact of its giving around global health and well-being, Open Philanthropy examines the “moral weights” of one kind of intervention over another, Favaloro said. He gave the specific example of evaluating health-related interventions that could save or improve a life, such as malaria prevention, against income-related interventions that could lift someone out of poverty, such as education. Open Philanthropy also generally evaluates the expected impact of each dollar it spends, according to Favaloro. In discussing why Open Philanthropy places higher value on health impacts, Favaloro cited the findings of a recent survey commissioned by charity assessment organization GiveWell and conducted by IDinsight — a global advisory, analytics, and research organization — in Ghana and Kenya that showed communities preferred lifesaving interventions over income gains. That suggests that Open Philanthropy should perhaps value health outcomes more highly as it seeks to maximize the impact of its grants, he said. Boosting flexibility as funding sources increase GiveWell, which is a partner of Open Philanthropy and also distributes its grant funding, has established a “bar” for cost-effectiveness. Historically, that has meant seeking funding opportunities that would be at least eight times more effective per dollar than cash transfers. But last year, GiveWell lowered this bar to include opportunities that would be at least five times more effective than giving cash. That change, in addition to Open Philanthropy placing greater value on health impacts and gaining access to more assets, could affect how its grants are distributed via GiveWell, Favaloro said. Open Philanthropy committed $300 million to GiveWell in 2021 — representing the bulk of its health and development grants — and plans to provide GiveWell with more funding each year, he said. “We’re planning on numbers like 500 million [dollars] per year,” Favaloro. Meanwhile, GiveWell also is gaining more donors, which “pushes … their marginal cost-effectiveness out by something like 20 to 30%,” he said. “So, they can be less picky in which grants they make, because they’re processing more money.” Giving now vs. later GiveWell recently announced that it would roll over $110 million it received from Open Philanthropy last year into 2022, citing a shortage of sufficiently cost-effective funding opportunities. That move renewed long-standing questions within the sector around the benefits of giving now compared with waiting until later. Eva Vivalt, an assistant professor of economics at the University of Toronto who spoke at Wednesday’s event, said she would like to see Open Philanthropy or GiveWell dig into the issue and estimate the efficacy of each approach. “I’d love to see it in more detail,” she said. “I think it’s really a fantastic opportunity to contribute to this debate.” Berger said Open Philanthropy had done some analysis on the topic before and is planning on “reviving” that work and publishing it within “the next couple months.”