GiveWell's Cost-Effectiveness Analyses

Updated: August 2024 (September 2023 version)

Our cost-effectiveness analyses are the single most important input into our grant recommendations. We view cost-effectiveness analyses as valuable for helping us identify large differences in the cost-effectiveness of grants we're considering for funding and to encourage staff to think through relevant issues related to organizations' work. However, although we spend significant staff time on our cost-effectiveness analyses, we consider our cost-effectiveness numbers to be extremely rough. We do not make recommendations solely on the basis of cost-effectiveness calculations and will rely heavily on other factors, such as an organization's track record, when we are comparing organizations with cost-effectiveness estimates that are not very different.

The model relies on philosophical values—for example, how to weigh increasing a person's income relative to averting a death—and difficult judgment calls about which we have limited information, such as the likelihood that a program as it is implemented will have the same impact as the program when it was studied. We encourage those who are interested to use this moral weights tool to explore the impact that valuing different outcomes has on cost-effectiveness. We also strongly encourage those who use our research to read more about our approach to cost-effectiveness and our approach to moral weights.

How We Use Cost-Effectiveness Estimates in Our Grantmaking

We use GiveDirectly's unconditional cash transfers as a benchmark for comparing the cost-effectiveness of different funding opportunities, which we describe in multiples of "cash." Thus, if we estimate that a funding opportunity is "10x cash," this means we estimate it to be ten times as cost-effective as unconditional cash transfers.

Note that our cost-effectiveness analyses are simplified models that do not take into account a number of factors. There are limitations to this kind of cost-effectiveness analysis, and we believe that cost-effectiveness estimates such as these should not be taken literally due to the significant uncertainty around them. We provide these estimates (a) for comparative purposes to other grants we have made or considered making, and (b) because working on them helps us ensure that we are thinking through as many of the relevant issues as possible.

We maintain a minimum cost-effectiveness threshold, or bar, that helps us decide whether to direct funding to a program. For example, we may aim to limit our grantmaking in a given period of time to grants that we estimate are at least 10x cash. This threshold changes periodically. One of the factors that can cause us to update the threshold is the amount of funding that we expect to have available for granting in a given year. When we anticipate having more funding, the cost-effectiveness bar goes down, because we expect to be able to fund more opportunities overall, including ones that are comparatively less cost-effective. When we project having less funding, the bar goes up, because we're constraining our grantmaking to the very most cost-effective opportunities.

We publish our current bar for funding in this space and update it whenever it changes. As of August 2024, our bar for funding Top Charities is 8x cash, and our bar for funding other programs is 10x.

We have invested substantial research time in minimizing our uncertainties about the cost-effectiveness and impact of our Top Charities, and we have a high degree of confidence in their work. We have set a slightly lower cost-effectiveness threshold for grantmaking to Top Charities to provide more grantmaking flexibility and ensure timely allocation of donations to the Top Charities Fund.

Our process for estimating cost-effectiveness focuses on determining whether a program is cost-effective enough to consider funding (that is, whether it is above our cost-effectiveness bar); it isn't primarily intended to differentiate between values that are above that threshold.

Our Cost-Effectiveness Models

Cost-effectiveness models for GiveWell's top charities can be accessed via the links below:

Cost-effectiveness models for other programs are linked from the summary sections of the program reviews (for example, see the link after the table in this section).

For past cost-effectiveness analyses, see the previous version of this page.

An extensive document about our cost-effectiveness analysis, primarily intended for staff members at GiveWell, is publicly accessible here.