Recommendation to Open Philanthropy for Grants to Top Charities

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Published: November 2019

Open Philanthropy, a philanthropic organization with which we work closely, is the largest single funder of our top charities. The vast majority of Open Philanthropy's current giving comes from Good Ventures. We make recommendations to Open Philanthropy each year for how much funding to provide to our top charities and how to allocate that funding among them. As this funding is significant, we think it is important to be transparent about the recommendations we make to Open Philanthropy.1

This page explains in detail how we decided what to recommend to Open Philanthropy in 2019 and why. If you’re interested in a bottom-line recommendation for where to donate this year, please view this post with recommendations for non-Open Philanthropy donors.

Open Philanthropy has not finalized its plans for the year and may give differently from what we’ve recommended. We think it’s unlikely that any differences would have major implications for our bottom-line recommendations for other donors.

We recommend that Open Philanthropy grant $54.6 million to our top charities to be allocated as follows:

Table of Contents

How did we decide how much funding to recommend?

The amount Open Philanthropy gives to our top charities is based in part on how it plans to allocate funding across time and across cause areas, and on our recommendation for how much funding to allocate to global health and development each year.

Open Philanthropy plans to allocate around 10% of its total available capital to "straightforward charity," which it currently allocates to global health and development opportunities based on GiveWell’s recommendations. This 10% allocation includes two buckets:

  1. a "fixed" percentage of 5% of total giving each year, and
  2. a "flexible" bucket of 5% of total available capital, which can be spent down quickly (over a few years) or slowly (over many years).

Last year, we recommended an amount of funding that put Open Philanthropy on track to spend down the flexible 5% of its straightforward charity budget by the end of 2031. Our analysis suggested that giving opportunities would become less cost-effective over time at a faster rate than we would expect funders to earn investment returns. That analysis implied that giving now would have a greater impact than giving later. Spending down by 2031 was on the faster end of the range proposed by Open Philanthropy and seemed reasonable based on these considerations.2

This year, we reduced the pace at which we recommend Open Philanthropy spend its flexible funds. Open Philanthropy provided us with an analysis indicating that it may be preferable to use a slower rate of spending than GiveWell used in 2018. Although we did not have a chance to review this work carefully (and we plan to spend more time considering and extending this analysis in the future), we believe we are likely to recommend that Open Philanthropy spend these funds more slowly in the future.

For this year, we opted to move in the direction of spending flexible funds more slowly, while considering the costs of declining to recommend funding for specific funding gaps on the margin. To make our recommendation in 2019:

  • We started with the total amount the above budgeting framework suggested for Open Philanthropy's annual spending in global health and development (the fixed 5% bucket plus reducing the pace of spending from the flexible 5% bucket). We then subtracted funding Open Philanthropy had already directed in 2019 to GiveWell Incubation Grants and to GiveWell's operating costs. This gave us a rough estimate of the amount of remaining funding we should recommend.
  • We identified a set of funding gaps that are highly-cost-effective and time-sensitive totaling $54.6 million. Informally, we assessed the benefits of funding this work to outweigh the benefits of investing that funding and spending it at a later date. This total was in the range that we aimed for: modestly lower than 2018 (moving in the direction of spending flexible funds more slowly) while not changing abruptly.

We thus recommend Open Philanthropy make grants this giving season totaling $54.6 million to our top charities.3 We discuss the funding gaps that are included in the $54.6 million below.

How did we arrive at this allocation?

Principles we followed

The principles we followed in arriving at this recommended allocation are the same as those we followed last year, with two additions. The third principle and the second part of the sixth principle, relating to preserving future options, are new this year.

Principle 1: Put significant weight on our cost-effectiveness estimates. Our cost-effectiveness estimates incorporate a substantial amount of information relevant to our decision-making. While we recognize the high levels of uncertainty around our cost-effectiveness estimates, they are the single largest factor we take into consideration. More on how we use cost-effectiveness to inform our decisions here.

Principle 2: Consider additional information that we have not explicitly modeled about an organization. While our cost-effectiveness estimates are the best tool we know of to estimate the amount of good a charity accomplishes, we haven't found it feasible to try to incorporate all relevant considerations into a single quantitative estimate. To illustrate, some factors that aren’t fully accounted for in our cost-effectiveness calculations but affect a charity's impact include:

  • The charity's decisions on how to prioritize spending. Our top charities often take into account factors related to expected impact that aren’t included in our cost-effectiveness estimates, such as localized disease burden and localized cost per person reached, when deciding how to spend their budgets.
  • Certain aspects of implementation quality. Our cost-effectiveness model generally does not capture effects such as distributional inequity leading to social costs or high-quality communications leading to repeated uptake of a preventive measure outside of the program.
  • Upside. Our top charities often perform activities that go beyond the scope of their direct work, such as conducting and sharing research that influences others or raising funds for their programs from funders that would otherwise give to less cost-effective programs.

We seek to account for the likelihood that top charities perform well, relative to other top charities, on factors such as the above examples by proxy: we observe qualities that do not directly affect cost-effectiveness but that we believe predict stronger or weaker performance on factors that we do not observe and which do affect cost-effectiveness. This year, we created a more detailed framework for our qualitative assessments of top charities, which we discuss on this page.

Principle 3: Consider additional information that we have not explicitly modeled about a funding gap. We may take into account a variety of unmodeled factors when comparing top charities' funding gaps. One factor that was relevant to this year's recommendation was the decision—given two funding gaps of similar cost-effectiveness—to prefer extending existing programs over starting new ones, in order to avoid undue disruption. Other factors might include the risk that funding a top charity beyond a certain level would exceed its staff's capacity to implement programs well, or the risk that funding a particular gap will crowd out funding from other sources.

Principle 4: Assess charities’ funding gaps at the margin, i.e., how they would spend additional funding, where possible. We try to understand how charities’ funding would be spent across different programs or locations. Our cost-effectiveness estimates for charities’ projects often vary substantially (depending, for example, on the underlying disease burden in a particular country the charity plans to work in). Where possible, we compare funding opportunities using our best guess of how funding would be used on the margin, rather than on average. As part of assessing charities’ marginal cost-effectiveness, we intend to capture whether there are diminishing returns to their receiving additional funding.

Principle 5: Default to not imposing restrictions on charities' spending. While we rely on our expectations of how charities would prioritize funding gaps to estimate marginal cost-effectiveness, we do not intend to impose any restrictions on how the funding is actually used in practice. (There is one exception to this: in cases where a top charity implements multiple global health and development programs and our recommendation is restricted to one of those programs, we do restrict funding to the priority program we recommend, such as deworming or vitamin A supplementation.) We believe our top charities are often better placed to make decisions about which projects to fund than we are, and we want to ensure maximum flexibility for them to do so.

Principle 6: Default to funding on a three-year horizon, modifying to preserve our options for the future where doing so is low-cost. Our top charities have communicated to us that there are often substantial benefits to knowing that funding for a program is secure for the future. Where it is important to charities, we aim to provide funding for three years. In some cases, whether or not funding is provided now for the second or third year of a program (currently 2021-2022) does not meaningfully affect the charity's planning over the next year. Not recommending Open Philanthropy make grants that are unlikely to affect a charity's planning over the next year enables us to retain, at little to no cost, the option to change our opinion of the best use of those funds and make recommendations accordingly. For these reasons, we cap our funding recommendation for a program at the smaller of (a) a three-year horizon and (b) the amount of funding runway that would affect the charity's planning between now and our next round of recommendations.

Principle 7: Ensure charities are incentivized to engage with our process. We recognize that our charity review process requires time-consuming engagement from senior members of charities’ staff. We want to ensure that charities are incentivized to continue engaging with our process. To this end, since 2016, we have recommended that Open Philanthropy provide a minimum “incentive grant” to top charities ($2.5 million) and standout charities ($100,000). We hope that providing significant incentive grants increases the chances that charities are motivated to apply for a GiveWell recommendation. We are concerned that without ensuring that every top charity and standout charity receives a substantial amount of funding, some charities might be deterred from applying for a GiveWell recommendation or from making changes to their programs that would enable them to potentially become top charities in the future. We may change the size of the incentive grants we offer in future years; if we do, we would advise charities of such a change well ahead of time.

Our process

We used the following process to make our recommendation to Open Philanthropy for top charity grants in 2019 (which built off of the process we used last year):

  1. We recommend that Open Philanthropy provide each charity with an incentive grant ($2.5 million per top charity and $100,000 per standout charity). We do not recommend an incentive grant to Evidence Action's Deworm the World Initiative, which received $6.8 million from an Open Philanthropy grant earlier this year. We consider that grant to include this year's incentive grant. We also do not recommend an incentive grant to SCI Foundation because we and SCI agreed to wait until 2020 to revisit its funding needs.

  2. We recommend that Open Philanthropy fully fund particularly strong opportunities at two top charities:
    • Helen Keller International's vitamin A supplementation work in seven countries. This work is highly cost-effective. We estimate that it is 28 times as cost-effective as cash transfers ("28x cash")4 overall, and, by country, ranges from 19x cash to 38x cash.
    • Malaria Consortium's funding gap for SMC in 2020-2021. This work is highly cost-effective. We model this funding gap as 17x cash. In addition, Malaria Consortium performs well on our qualitative measures of organizational strength; this assessment supports our view that this gap is highly cost-effective to fill. The funding gap is time-sensitive. Malaria Consortium will need to begin planning for 2021 in 2020.
  3. We considered whether there were other very strong opportunities in terms of (a) estimated cost-effectiveness, (b) our qualitative assessments of organizational strength, and (c) particular arguments relevant to that funding gap but not captured elsewhere in our analysis (e.g., whether our decision not to fund a particular gap would be disproportionately disruptive to an organization’s activities). We focused on opportunities that were time-sensitive—i.e., where funding the opportunity now, relative to in a year from now, would meaningfully affect the charity's ability to carry out the work.

    Due to our expectation that we will recommend a lower level of total giving to Open Philanthropy in future years, in order to spend down flexible funding more slowly, we set a very high bar for funding opportunities this year. We decided not to recommend additional grants, beyond those listed above, to Open Philanthropy at this time.

A discussion and description of the remaining funding gaps for each of our top charities is available on this page.

We recommended the following allocation to Open Philanthropy:

Charity Recommended allocation
Malaria Consortium (SMC program) $33.9 million
Helen Keller International (VAS program) $9.7 million
Sightsavers (deworming program) $2.7 million
Against Malaria Foundation $2.5 million
END Fund (deworming program) $2.5 million
GiveDirectly $2.5 million
Evidence Action's Deworm the World Initiative -
SCI Foundation -
Standout charities $0.8 million ($0.1 million each)

Below, we discuss what this allocation means for each of our recommended charities. Additionally, you can find information on our qualitative assessments of our top charities here and on their remaining funding needs here. Full information about each of our top charities' room for additional funding is available in our charity reviews.

On this page, we discuss what the funding we recommend Open Philanthropy provide will enable each charity to do if it spends funds as we currently expect. The charity will retain the option to allocate the funds otherwise, as long as the funding goes to the program for which we recommend the charity, where applicable (e.g., funding we direct to Malaria Consortium is restricted to use for SMC, but can be used in any country).

Note on cost-effectiveness figures: We express our cost-effectiveness estimates in terms of how many times more cost-effective a program is than using the same amount of funding to deliver unconditional cash transfers to very poor households. We model the cost-effectiveness of cash transfers as delivered by GiveDirectly.

Malaria Consortium's SMC program

Amount recommended: $33.9 million

This funding will enable Malaria Consortium to spend:

  • $30.1 million to fully fill its funding gaps in its three current countries of operation—Burkina Faso, Chad, and Nigeria—through 2021. This figure includes scaling up operations to cover additional areas in each country. Cost-effectiveness: 16x cash
  • $3.8 million to expand its SMC program to a fourth country. Malaria Consortium has told us that this will most likely be Togo. Cost-effectiveness: 18x cash for Togo

We are choosing not to recommend that Open Philanthropy fill some or all of Malaria Consortium's funding gap for 2022—a funding gap of $35.6 million at an estimated cost-effectiveness of 17x cash—in order to preserve our options for the future. We do not expect that having funding for 2022 would affect how Malaria Consortium operates in 2020. As far as we have seen, Malaria Consortium has planned on a two-year rather than three-year horizon.

However, we think that the 2022 funding gap is the most cost-effective unfilled option among our top charities, and we're excited for individual donors to close this gap. Malaria Consortium's SMC program is our recommendation for donors who want to give directly to a specific charity.

More information on Malaria Consortium's funding gaps in our review of Malaria Consortium's SMC program.

Helen Keller International's VAS program

Amount recommended: $9.7 million (plus an additional $2.6 million from GiveWell's Q3 2019 discretionary grantmaking, for a total of $12.3 million)

This funding will enable Helen Keller International (HKI) to spend:

  • $5.5 million to continue its work in five countries (Guinea, Mali, Burkina Faso, Côte d'Ivoire, and Niger), including supplementing its budgets in 2020 and 2021 and extending its funding runway to 2022. Cost-effectiveness: 31x cash
  • $4.5 million to start a new program in the Democratic Republic of Congo (DRC), with funding to cover 2020-2022. Cost-effectiveness: 27x cash
  • $2.4 million to expand its program to Bauchi State, Nigeria, with funding to cover 2020-2022. Cost-effectiveness: 25x cash

We chose not to recommend that Open Philanthropy provide funding for HKI to begin new programs in Cameroon ($1.8 million at 14x cash) and Kenya ($1.5 million at 11x cash). When we model multiple funding gaps as having similar cost-effectiveness, we generally prefer continuing programs to starting new ones, in order to avoid undue disruption.

More information on HKI's funding gaps in our review of HKI's vitamin A supplementation programs.

Sightsavers' deworming program

Amount recommended: $2.7 million

After receiving an incentive grant of $2.5 million, Sightsavers would have a small funding gap for two programs. We are recommending a grant of $2.7 million total in order to fill that gap and enable Sightsavers to spend:

  • $0.3 million to extend deworming in Yobe State, Nigeria through 2022. We estimate that Sightsavers' average cost-effectiveness is 9x cash
  • $1.3 million to expand its program in Cameroon to new regions, with funding to cover 2020-2022. We estimate that Sightsavers' average cost-effectiveness is 9x cash
  • $1.1 million to expand its program in DRC to a new province, with funding to cover 2020-2022. We estimate that Sightsavers' average cost-effectiveness is 9x cash

More information on Sightsavers' funding gaps in our review of Sightsavers' deworming program.

Against Malaria Foundation

Amount recommended: $2.5 million

We decided not to recommend filling AMF's room for more funding beyond the $2.5 million incentive grant. Over the next few months, we plan to revisit the possibility of making a large grant to AMF. Our decision will rely on what 2020 distribution agreements AMF signs in the near future (if any); how well we are able to answer outstanding questions we have about AMF's monitoring; and, if available, results from AMF's 2019 distributions in DRC, where it is likely to commit marginal funding. We estimate that AMF's average cost-effectiveness is 17x cash.

More information on AMF's funding gaps in our review of AMF.

END Fund's deworming program

Amount recommended: $2.5 million

We only recommended the $2.5 million incentive grant. The END Fund’s estimated cost-effectiveness is lower than that of Deworm the World Initiative and Sightsavers' deworming program.

More information on the END Fund's funding gaps in our review of the END Fund's deworming program.

GiveDirectly

Amount recommended: $2.5 million

We only recommended the $2.5 million incentive grant. Our cost-effectiveness estimates suggest that our other top charities are substantially more cost-effective.

More information on the GiveDirectly's funding gaps in our review of GiveDirectly.

Evidence Action's Deworm the World Initiative

No grant recommended at this time

Deworm the World received $6.8 million from a prior Open Philanthropy grant when Evidence Action shut down its No Lean Season program. We consider the $2.5 million incentive grant to be included in the reallocated No Lean Season funding.

Deworm the World holds $10.5 million in reserves. We estimate that Deworm the World has $3.5 million in room for more funding, not including building additional reserves.

More information on the Deworm the World's funding gaps in our review of Deworm the World.

SCI Foundation

No grant recommended at this time

We estimate that SCI's available and expected funding exceeds the spending opportunities it has currently identified. The lack of room for additional funding is due largely to the fact that SCI is waiting for the UK's Department for International Development (DFID) to decide how it will allocate funding in many of the countries in which SCI has operated. We and SCI agreed to wait until 2020 to revisit its funding needs. We are not recommending an incentive grant at this time. We expect to gain additional information about SCI's room for more funding once DFID's relevant allocation decisions are made, at which point we and SCI will be able to discuss specific spending opportunities.

More information on SCI's current funding situation our review of the SCI Foundation.

Standout charities

Amount recommended: $100,000 per charity for a total of $800,000

As in previous years, we are recommending an incentive grant of $100,000 to each of our standout charities.

  • 1

    More about our relationships with Open Philanthropy and Good Ventures here.

  • 2

    From Open Philanthropy's post "Update on Cause Prioritization at Open Philanthropy" from January 2018:

    "The other is the “flexible” bucket: 5% of all available capital, restricted to 'straightforward charity' but otherwise allocated in whatever way maximizes impact, which could include spending it all during a particularly high-impact time. For this bucket, we presented GiveWell with a range of possible 2017 allocations ranging from 'aggressive' (2017 giving that, if repeated, would spend down the whole 'flexible' 5% allocation - net of investment returns - in 5 years) to “conservative” (2017 giving that, if repeated, would spend down the whole “flexible” 5% allocation - net of investment returns - in 50+ years).

    GiveWell settled close to the 'aggressive' end of the spectrum. It reasoned that the advantages of giving now (mostly listed here) are larger than the expected financial returns, though it wanted to spend down slowly enough to preserve some option value in case it finds unexpectedly strong giving opportunities (something that seems most likely sometime in the next 10 years)."

  • 3

    This is less than we recommended Open Philanthropy give to top charities in 2018 ($64 million).

  • 4

    We use unconditional cash transfers as a benchmark for comparing the cost-effectiveness of different programs. When discussing cost-effectiveness, we generally refer to the cost-effectiveness of a program in multiples of "cash." Estimates of the cost-effectiveness of each funding gap can be found in this spreadsheet. Throughout this page, we are using "adjusted" cost-effectiveness figures, i.e. cost-effectiveness estimates that adjust for certain factors, like a charity's quality of monitoring, that are not part of our main cost-effectiveness analysis. The adjusted estimates drive our allocation recommendations.

Source URL: https://www.givewell.org/charities/top-charities/2019/open-philanthropy-recommendation