Mindy: Welcome to the BiggerPockets Money podcast bonus Giving Tuesday edition, where we interview the founder and CEO of GiveWell, Ellie Hassenfeld and talk about maximizing the impact of your charitable donation.
Guest: I think it’s also really important to be open-minded about what you’ll support. You know, if if you’ve already focused in on a single organization and you don’t want to consider any others, uh you just have fewer opportunities and fewer options of what you might find and the more flexible you can be, the better.
Guest: Um once you’ve sort of got to the organizations that you want to consider, I think it’s a great idea to press them a bit for, you know, how do they know their program works? Um, or maybe a better question is, how would they know if it weren’t working?
Mindy: Hello, hello, hello. My name is Mindy Jensen, and with me as always is my very generous co-host, Scott Trench.
Scott: Ah, thank you to my very charitable co-host, Mindy Jensen.
Mindy: Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.
Scott: That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or give generously to the highest possible impact cause, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.
Mindy: Scott, today is the 10th anniversary of Giving Tuesday, an idea that was formed in 2012 as a day that encourages people to do something good. Every act of generosity counts, and everyone has something to contribute toward the building the better world we all want to live in. Today we’re speaking with the CEO of Givewell, an organization that is devoted to researching charities to find the highest impact evidence-based charities. And during the show, Ellie gives some great tips for doing your own research, but he also has this whole organization that does the research for you. So, I don’t know about you, Scott, but I’m busy. Do you are you busy now that you have a baby? Or is life just all sunshine and rainbows because you got all the time in the world?
Scott: Used to have free time.
Mindy: Have two. You’ll have so much more free time.
Mindy: But Ellie shares some tips for doing research on your own as well, and I think this is such a great show. Uh number one, be proactive. Don’t necessarily respond to solicitations for a money when somebody reaches out to you and says, hey, would you give me some money? Look for ways that you want to impact your local uh charities, your local environment, your like a a concept that you want to support like you want to donate to uh their big one is malaria. They they are committed to uh combating malaria. So don’t wait for the malaria charities to reach out to you. Go out and look for charities that that support the kind of research that you’re looking for. Uh, be open-minded about what you want to support. That kind of goes against what I just said about look for specific charities. Be open-minded about the kind of charities you will support. Uh press the organization about their successes and how they will know when their system isn’t working. That’s a really good tip. Uh, number four, what will you do with additional funding? That’s a great question to ask them because if they don’t have an answer, why should you give them additional funding? Find somebody who has a great answer. Um, and give money rather than goods and give with no strings attached.
Scott: Yeah, I I think those are great a great framework that Ellie provided for us. We’ll get into that, of course, as we get going, but um, I I do want to to highlight one issue that we discussed around finding a local charity or something that is directly in line with a mission you might want to support is hard work. I would equate it to finding a real estate investment property, right? You got to go and do a lot of research to find one good deal. Uh you maybe analyze 15 or 20 or 50 or 100 100 100 properties before you’re going to find a really good one that’s going to produce a really good ROI. and I think the same may be true in the charitable giving space to find an organization that is actually providing a good impact per dollar invested in them uh in in a cause that you want to support. And so I think there’s a process and my recommendation for folks this holiday season is to begin that process in the local community, give or not give this year. um but go out and find something that is you’re aligned with that you feel like is doing really good work. And then also consider giving with an organization like Givewell that has done research at the aggregate level to find the most effective way to send the next dollar you invested. You can either give directly to Givewell or you can give to an organization that they’ve uncovered as a highly effective organization uh and you can give the dollars directly to that organization. So I this holiday season, I plan to do both. I plan to give to an organization that I have worked with for a long time and that I found through a process that’s very similar to what Ellie recommended and I also plan to give to Give well. um and and allow them to allocate those dollars to the next best opportunities to save lives.
Mindy: I think that’s awesome, Scott. Shall we start the show?
Scott: Let’s do it.
Mindy: Okay, before we bring in Ellie, let’s take a quick break.
Mindy: And we’re back. Ellie Hassenfeld is the CEO of Givewell, a nonprofit dedicated to finding outstanding giving opportunities. Ellie, welcome to the Bigger Pockets Money podcast.
Guest: Oh, it’s great to be here. Thanks so much.
Mindy: I’m so excited to talk to you today.
Guest: Yeah, well, I’m excited to to be here and uh share some of what we’re doing.
Scott: Awesome. Well, Ellie, would you mind giving us an overview of of of giving like an investor or how you like to think about the challenge. I know that as investors, as an investor, I want to make sure that my any donations that I’m going to give are going to actually have the impact that I want them to have. How do you is there a process or maybe you could help frame fram the the art of giving effectively in a way that would be helpful here?
Guest: Yeah, I’ll start, I’ll start real high level and you can dig in as far as you want. So, uh, at the big picture level, uh, Givewell tries to maximize the impact that donations are having when and and so what we look at is, um, metrics that that we think will show that that someone’s giving is doing as much good as possible. So, for example, when we do research on charities, we look at things like, uh, how much does this organization have to spend to save the life of someone in need? And, uh, we metrics like that are are the ones that we’re focused on, just to give a little bit of context on what Givewell does and and how we focus on the world of charitable giving because it’s really large. Uh, we focus on organizations that are helping people in some of the poorest parts of the world. Uh, so that often means working on diseases in Africa or reducing poverty in Africa. And so the the metric the metrics we use, the research we do is focused on trying to achieve those outcomes that uh, are are ultimately like fairly measurable and can demonstrate that the donations are going real far.
Scott: So what is the key metric that you guys are looking at?
Guest: So we I wouldn’t say there’s any metric that uh is the be all and end all so to speak, but um, we largely look at organizations that are improving health. And there we’re mostly looking at organizations that uh avert deaths. So we’ll say how much does it cost to avert the death of someone who who, you know, who otherwise would have died. And then, um, on the other hand, uh, how much does it cost to increase someone’s income by a certain amount, reducing poverty. Um there’s a lot of other things that someone could look at and I don’t want to give off the impression that those are the only metrics, but at least as a starting point, those are two of the high-level um outcomes that we’re really focused on.
Scott: Awesome. And could you give us an example of of disparities between groups for um a know, some two groups that might claim to both help people but might have very different economic outputs in terms of of that aid?
Guest: Yeah, so I think there’s a lot of different types of comparisons that one could make, but I’ll start just comparing a group working overseas to one working at home just to give a sense of um, you know, why we’re so focused on overseas giving. And when uh, just as a quick sort of historical note, when Give got started, we weren’t just focused overseas. We also looked at groups working in the United States, uh, but after seeing how much how far a dollar goes overseas, we decided to focus entirely on on overseas organizations. Um, but to sort of dive into it, uh, one of the organizations we’ve recommended for a long time is a group called Malaria Consortium and one of the programs they provide is preventative medicine that uh if you give it to children over the course of the malaria season, it reduces cases of malaria by a huge amount. Uh and malaria is still a really big problem. It’s not something that we talk a lot about in the US, but um, you know, roughly speaking, 1,000 children every day are dying from malaria globally. So this is this is a really big problem. Um we estimate that it costs around $5,000 to save a life from malaria. Um, you know, at the same time, if you look at an organization working in the US uh on on a program like education, um, you know, it might cost 1 to $2,000 per student per year to put uh a child through a uh better charter school education program. And and I want to be clear like that those are great programs too. They’re have they’re doing a lot of good. um but um when we compare uh $5,000 to save a life against let’s say $2,000 for a year of schooling, um it seems to to me that the the former, the the death averting charity is is doing more with the the funds that it’s receiving.
Scott: Awesome. Can you walk us through the mechanism by which one would avert malaria deaths?
Guest: Yeah, so um, I’ll I’ll give like a slightly different example because I think it’s a little bit easier to to understand, but um, I’m going to talk about another organization called Against Malaria Foundation, which we also recommend and they uh fund the distribution of insecticide treated nets. And these nets are uh valuable because they protect against and kill the mosquitoes that transmit malaria. And so, um, mosquitoes tend to bite most frequently in the evening hours when these nets are up and they’re covering the people who are sleeping. Uh it prevents uh cases of malaria and then subsequent deaths from malaria. Uh and we know that this is the case both from uh a certain many randomized control trials, so sort of the gold standard of evidence that demonstrates that a program is working. Uh many randomized control trials over the years that show that distributing nets results in fewer cases and fewer deaths. And then also ongoing data collection and surveys that demonstrate that, you know, when uh nets are distributed, the people who get them don’t always, but mostly tend to use them, they use them consistently and it leads to falling malaria cases over time.
Scott: So, would it be would it be fair to say that you have done an exhaustive amount of research in trying to figure out how to stretch a dollar to its absolute most benefit to to society, using a metric of human lives saved or deaths averted uh if you want to invert it uh uh for this. And that putting on these nets for folks that are sleeping in Africa for children in particular, is the best bang for your buck that you’ve been able to validate fully or close to it. Is that is that another way of putting this?
Guest: Yeah, I’d say that nets in Africa is is one of the uh four or five best things that we’ve been able to find to date. You know, one of those things that um you could donate to tomorrow and you know, with more money, the groups that are running these programs will be able to to do more of it. Uh nets are not the only ones and of the ones that we recommend. so there’s um programs that encourage parents to bring their children for childhood immunizations, uh distributing vitamin A supplementation to kids who are vitamin A deficient, which also reduce deaths uh from, you know, in childhood. um other malaria programs and then a program that we recommend focused on uh deworming which is treating children for parasitic infections. And of all the groups that you know, we’ve looked at in Givewell’s 15-year history, those are the ones that we see as having the best bang for your buck today.
Scott: And so how do you how do you know um walk us through uh Givewell’s process for actually validating those those things? Have you you know, have you guys done, have you been on the ground and seen these operations? Have do you do analysis of the companies? How do you how do you actually feel confident in um getting us the numbers you’ve given us?
Guest: Yeah, so there’s a few different parts of our process. I’d say it starts with uh trying to cast a wide net and making sure that we’ve uh found all the organizations that we could consider. And so we’ll get information on organizations from uh tax forms. Every large registered charity has to file a tax form with the IRS, that’s publicly available data. Uh I myself have gone through thousands of those and uh sort of as just trying to get them into the into the um into our pipeline and I’ve also been through thousands of organizations websites as a starting point. Uh the next thing that we’re trying to do is figure out which programs are having a big effect. So a program might be distributing malaria nets. and most charitable organizations don’t have the resources or the capability to assess their own programs and determine how well they’re working. And so often the demonstration that their programs are working comes from academic evidence. I mean there’s a whole field of of experts who’ve been working for years trying to determine what programs will improve public health the most in low-income countries or what programs will reduce poverty the most in low-income countries. And we are not reinventing the wheel. We’re leaning on this giant body of academic evidence to determine the programs that we want to prioritize. Um, so we start we have this big list of organizations, big list of programs, we’re looking for the programs that have the biggest effect. Um and then we filter down the organizations to the ones that are implementing those great programs. At that point, we need to talk to the organizations themselves and that involves both, uh getting information from them on their budget, uh meaning how much does it cost for them to deliver a mallet using this example? Um also, how do they know that when they’re delivering the nets, they’re actually reaching the intended recipients, that people use them over time, that they’re uh replacing them when they wear out. Again, in our example of nets, they wear out. Uh and and so we use all of that to arrive at an estimate of um how much it costs for an organization to deliver a net and subsequently, how much it costs the organization to avert the death from something like malaria. Um and then we we also do uh site visits where we’ll go to the organizations and visit them on the ground, see things in person. And um, you know, just aside from sort of the uh, I don’t know, the high level 50,000 foot view of the organization, actually like being there and seeing things in person uh as a way of both gut checking what we’re getting in in paper, but also uh, you know, really like seeing things on the ground, which is which often raises new questions that we hadn’t thought of before.
Scott: Do you have any other um, you know, let’s say let’s say that folks do want to make an impact here in the US or even in their local community. Do is there a toolkit that um you would suggest or that that give will provides on on how to do that effectively?
Guest: Yes, so I think um and the honest answer is I think it’s real hard because it’s um, you know, it’s difficult to do this work in uh one’s spare time. but would love to just run through uh the main tips that I’d give people to keep in mind as they’re trying to make these decisions. So, I think the the number one most important tip is be proactive. and by that, I mean, you should go out and you should try to find the organizations that you’re interested in, rather than just responding to solicitations that come in the mail or over the phone. You’ll do much better if you if you take that first step rather than waiting for someone to come to you. Uh I think it’s also really important to be open-minded about what you’ll support. You know, if if you’ve already focused in on a single organization and you don’t want to consider any others, uh you just have fewer opportunities and fewer options of what you might find and the more flexible you can be, the better. Um, once you’ve sort of got to the organizations that you want to consider, I think it’s a great idea to press them a bit for, you know, how do they know their program works? Um, or maybe a better question is, how would they know if it weren’t working? And you often will not get a good answer to this question and I think that’s that’s telling, but for the organizations that have great answers, I think that, you know, it takes some work, but it’s a really great way to know that they’re they’re um worthy of support. Uh, a a question I love is uh, what will you do with additional funding? So so ask them essentially like, hey, I’m I’m a donor, I’m planning to give you more, what do you think’s going to be different because I gave you money rather than uh, you know, you’re not getting a money. Um and that that’s great both because it gives you a sense of what they might do, but also gives you the opportunity to come back a year later and check in and see how things went, whether they, you know, went relative to plan, whether they’re on track, and if not, you know, why. Um and then and then finally like when you actually do give, uh strong recommendation is to give money rather than goods and uh, you know, and then give, give with no strings attached. And and by that, I mean, uh once you found an organization that can answer these questions well, trust that they know more than you do about their space. And I think donors, donors can really make mistakes when they uh want their funds to support programs instead of overhead and that can really cripple charities and their ability to build the type of uh strong sustainable organizations that are necessary to tackle some of the the problems that they face.
Scott: I I I think that’s fantastic. You know, to give to give an example in my my personal life, I I I think it’s important to give uh time and money to organizations in the local community because of what I do that work with financial literacy and um financial empowerment helping people escape poverty uh and in those types of situations and it’s a process. I I must have volunteered with five or 10 different organizations um that each didn’t align necessarily either I didn’t feel that the donations were effective in resolving, you know, giving someone 200 bucks in time of crisis, for example, with one organization is great work. Not not an argument with it. It just wasn’t aligned with my values of teach a man to fish, right? And help that person uh uh uh lead their own journey out of poverty, right? And then other organizations have one-off events or and it just took me several years to find an organization that actually had a process and a social ROI as they uh as they calculated that I that I believed was having was having an effective impact and to give money and time to that organization as opposed to some of the other ones. It it’s like finding a real estate deal. Um, you know, when we we talk about it, it’s a it’s a a lot of work that goes into to finding these things. um uh unless you’re, you know, willing to invest in the stock market or one of these things that are, you know, index funds or something. So, I like to is it, would it be fair to say that Givewell is kind of the index fund easy, easy button automatic option. You know you’re going to probably have a good bang for your buck uh uh in terms of of a good impact uh through your organization?
Guest: Yeah, I love that analogy because I think it’s right. I mean, we’re we’re saying for the uh, you know, I think a lot of the people that Givewell serves are folks who come to the end of the year, they they want to give generously and they don’t know what to do. They they’re not going to spend the time to find the opportunity on their own. and so Givewell’s the place they can give and feel confident that their donation is doing a lot of good, it’s having a lot of impact.
Mindy: On your top charities list, I love this, you have a uh a phrase donate based on evidence, not marketing and I think that so many people, I don’t want to say get sucked in because that sounds mean, but I’m sure I’ve gotten sucked in to marketing as well. I mean, marketing is there to give you money. It’s it’s there to, I mean, I I’m wondering what sort of uh money is being spent on marketing that could have been directed towards the actual charitable work if they would just do that. Um, and I think it’s very interesting that two of your top four charities are malaria charities. I can’t believe that malaria still exists. Like it’s 2022, why have we not found a cure from malaria yet?
Guest: Um, well, I I I think with malaria, it’s, we you know, we know what works and unfortunately, the people that it affects are just some of the poorest people in the world and it’s really a case where uh, you know, for for those of us who are fortunate enough to to live in a in a high-income country, we don’t even imagine, you know, what it’s like to to not have the ability to purchase a $5 malaria net and a $5 malaria net is the difference or can be the difference between life and death at that age. Um and so it’s, um, you know, that that’s really what what we’re about trying to say, uh let’s reward organizations and donate to organizations based on the impact that they have, rather than their success in marketing. And uh, you know, I think all too often in in the charitable world, uh basically because, uh, you know, there’s this weird fact about charities that the ultimate beneficiary of their activity is not the customer. It’s not the person who’s paying the money the way it is with with, you know, you know, when we buy a product at the store, we if we don’t like it, we won’t buy it again. Um but with a charity, it’s the donors who pay the money and so ultimately nonprofits are aiming to serve those donors and uh, you know, they serve them by making them feel good about their donations, not necessarily by demonstrating impact. And that’s why I think some of the organizations we have on our list just tend to be uh, you know, less successful at marketing, uh, but we think some of the best in the world at the impact that they create.
Scott: Now, you the way it works for your company is you go to givewell.org and then your it looks like your preference is for folks to donate to your flagship fund, and then presumably, you allocate those donated dollars to the highest and best-used charities that according to that year’s calculation or analysis.
Guest: Yeah, so I mean, our our our number one choice is that people give to us and we reallocate, but I want to be very clear like we’re perfectly happy for someone to come to our website and go right to any of these organizations and donate. Um, you know, the website and all the information there is free of charge and if anyone is wondering, you know, why why should I send my money through this third party? Go ahead, you know, donate donate right to these organizations, that would be amazing. Uh, you know, the reason we like when people donate through us is it just allows us uh to aggregate up donations and then give to the organizations that have the biggest needs at any point in time. And you know, we’re in close contact with them, we know what their needs are, we know where they plan to go next and by having the the funds aggregated, we can be a little bit more efficient in the reallocation. Uh, you know, we don’t take any cut of those donations, any any fees on the donations, and so they all, you know, 100% just goes through to the charities. But like I said, we’re perfectly happy for people to also go directly and that’s why all that info is up there, you know, free of charge.
Scott: Yeah. Now, I know that there’s this is a myth or incorrect, but I want to pose the question anyways, um, playing devil’s advocate here. I’ve I’m I’m a I’m a potential donor and I’ve heard somewhere, I can’t remember exactly place where where it is, that you shouldn’t donate to organizations that have marketing budgets or that um have a higher amount of overhead. You want your donation to go directly to the person that you’re serving with that. You’ve kind of touched on this earlier where, you know, there’s a, no, don’t give them stipulations with that. Why is that a bad idea and what what is healthy in the context of expenses that are not direct directly related to the mission of the charity like salaries.
Guest: Yeah, so um, I mean the the bottom line is, you know, charities are like any other business where, you know, you you need to spend on overhead and fundraising or or marketing in order to survive as an entity. And uh, so what what could that overhead spending be? I mean, it’s it means uh paying people salaries that enable them to that enable you to recruit uh talented people. It means investing in technological infrastructure so you can work efficiently. And when donors try to starve organizations of that sort of funding, it it leads to organizations that are, um you know, maybe able to direct a little bit more money in the short term, but certainly less successful in the long term. Uh and so, um I I I think that, you know, just tends to be a big mistake. Instead of focusing on overhead, there’s something that’s much better to focus on, which is uh, you know, how how much impact do they have? You can just focus on the thing you care about directly. Um, you know, one of the examples I’ve always loved as no one would ever say, uh, you know, decide whether or not to invest in Apple stock based on how much it spends on overhead. Like that doesn’t even make any sense. That’s not how we would think about it. You know, we’re we’re trying to think about how valuable the stock is relative to its, you know, its future and and that or where it will be in the future, that’s a much better way to assess that opportunity than to to think about something like how much did it spend on on servers and is that too much? Um and so we really don’t focus on it um at all and I think it’s a mistake to. Uh you know, even more practically, just it the the numbers themselves uh can vary a lot based on the nature of the activity an organization does. So if you have one organization that’s uh collecting a lot of um in kind donations. So let’s say products that they’re distributing out, they’ll have a really low overhead number because they’re largely a regranter and another organization that relies more heavily on uh, you know, people might have a higher number. And so I think it’s hard to say as a rule of thumb, you know, what’s what’s good versus bad and instead, if you went to organizations and asked them the sorts of questions that I I laid out earlier, you’d avoid the ones that are scams and you’d end up focusing on ones that are really effective.
Mindy: Are there any red flags that I should be looking out for when I am doing my own research?
Guest: I think first and yeah, I mean I think you will avoid a lot of the worst outcomes by being proactive in the first place. If you know, if if if you are uh, if you’re starting and you’re saying, I’m trying to find, let’s say the best organizations in my community and you know, I don’t know, you you do you go online or or you talk to friends and family to get some recommendations, that’s a much better place to start than the group that’s calling you on the phone that you’re responding to reactively. and it just that that goes really far. Um, and um, yeah, so I I I think I mean that that’s basically it. Um, you know, I think I think you should ask questions and if you get good answers, you should, you know, feel pretty good. You’ll never know for sure, but that’s a great place to start.
Scott: We, you know, I I also love the, what would you do with another 50, 100, some some number that’s large enough that is actually meaningful? 50, 100,000 in in uh in in charitable gifts and it’s amazing how many organizations I asked that question to who have no idea what they would do with the with the next 50 or 100,000. That that’s really important because like I I intend hopefully over the course of my life to give a significant amount of money and if I’m I getting to somebody who doesn’t have a plan, that’s a problem as well. So I I I loved all of your your questions there and I think that those are those are the key elements. They’ve got to have a convincing um, you you you want to have a cause you want to support, find organizations, don’t let them come to you that you want to support with them. Be open-minded because they can take you on a path that’s not exactly where you wanted to go that’s much more effective because these people are doing it full time if they’re if and many of them are very, very good at it. Get let them run with the donation. I think is what you what how you articulated that. Um, and get them to to talk about what they’ve done and why they know it’s working or why they know it isn’t working. I love that. It’s not live safes, it’s deaths averted. Uh I I love the way your mind works on on some of these problems. So, but but I think that’s right. And and if you do that, and then what are you going to do as you scale the vision? or as you as you scale towards that vision. um what what what will the next incremental dollar get us in terms of impact or good? That’s giving like an investor, I think.
Guest: Yeah, totally. And I think I mean so I think like one distinction I want to draw which I think is is is somewhat challenging here is that on I do think that uh, you know, there’s a difference between what someone can do on their own, um, you know, in in a relatively small amount of time, you know, versus what, you know, we’re trying to do at Givewell with our full-time staff. And you know, I think these tips work really well to go from uh, you know, I don’t know really where to start to getting you somewhere. Uh but I I it’s it’s just real hard to make progress on your own. And and the place that I really saw that was in the way that uh sort of what led my co-founder and me to found Givewell 15 years ago. You know, we were sort of in this position, we were working in the finance sector, we wanted to give to charity, and uh we just thought we would, you know, we did we we fall that. We were proactive, open-minded, we asked organizations for their case for effectiveness. Um but after going through that for a few months, we largely found that we were getting, you know, marketing materials more than substantive answers on how did the organizations know that their programs are working? And uh it was really that frustration that led us to found Givewell and just try to create this resource that we hoped, you know, other other people in a similar position would be able to use. So instead of having to, you know, reinvent the wheel, they could rely on us to to decide where to give.
Mindy: A moment ago, you said that Givewell takes no percentage of the proceeds from the donations. 100% of what’s donated to Givewell goes to the charities. How do you fund your research?
Guest: Yeah, so we have um donors who are really interested in supporting our operations directly. And so they they give to us that funds our salaries and uh the, you know, the the that therefore, the funding that, you know, other donors are the the donations that other donors are making are going right to the charities themselves. Uh and and for those donors that are supporting us, I think their mindset is uh it’s a good deal to support, you know, this this give well research project that is uh then creating this resource that enables um tens of thousands of donors every year to give, you know, give more effectively than they otherwise would have.
Scott: It seems like a pretty effective donation for them.
Guest: Yeah, well, I hope so. We’re doing our best.
Mindy: Okay, now cheeky follow-up question, Ellie, what would Givewell do with an extra 50 or 100,000 donated directly to them?
Guest: Yeah, so we get donations of two kinds. One is uh unrestricted. So that means donations that we could spend on our operations if we had a use for it. The other is money that we talked about before that goes to one of our funds and we can send directly to organizations we support. And so if we got extra money into our unrestricted fund, uh right now we would just be passing it along to other organizations. And that’s because uh where we currently are at at at the amount of funding we’ve raised and the amount of savings that we have, we think the best use of that money is sending it on to another organization that is going to put it directly to use and help people immediately. Uh, to give some context, uh, we expect to raise about $600 million in 2022. And but we’ve found $900 million worth of outstanding giving opportunities. And so, uh, one of our big focuses is trying to close as much of that $300 million funding gap as we can. Uh, and so if we took in extra money that would be, you know, could be used for Give’s operations or could be sent along, we’re sending it along because that just helps us move down the path towards closing more of that gap that we need to and, you know, helping more people in need.
Scott: That’s an incredible amount of money.
Mindy: Yeah, that, that makes me feel really good about Givewell because I did a bike ride once where I went the next year, but the year before I went, the organization hired a company to like some charitable company to run it and they took 90% of the donations to put the ride on. and it just seemed like such a waste. Like why don’t I just give you the 10% directly and then not do the the ride, but the ride was what was like what I wanted to do so it just it seemed like it was such a letdown to see that and then the next year they didn’t use the same company but there’s a lot of companies out there that don’t do that. like that would take all of the money given to you unrestricted and just keep it. and I I really like that you guys don’t.
Guest: Well, I think that we’re, you know, we’re definitely trying to uh, you know, be one of our our aims is is to be very transparent with the outside world. Uh, you know, the one thing we say is uh, you know, our business is is your business. and so uh to that end, you know, we have this policy that I just mentioned where at a certain threshold, we are just not going to keep money for ourselves, we’re going to grant it out. You know, we don’t want to build up a big give well endowment. you know, that doesn’t make sense. We want to keep uh doing great research over time and donors should keep supporting us and if they don’t believe that we are, then they should stop, you know, we should be be able to to keep going after that. Uh similarly, uh we put uh our board documents online. So you mean, you can certainly see our tax forms and our audited financials, but you can read the the materials we share with our board and we put them up on our website for anyone to see because we think that, um, so often in charity, there’s not enough transparency and with more transparency comes trust and and can enable people to understand, you know, why we’re doing what we’re doing and believe that, you know, they they have all the you have all the information you need to to decide uh, you know, whether or not you want to to trust us.
Scott: Who are who’s on staff at Givewell besides yourself?
Guest: So it’s um, you know, people from eclectic backgrounds. We have people who are uh with advanced degrees in economics on the research team, you know, people with uh fundraising background on the the outreach team. Uh, I think one common thread uh between many of our staff and and now Givewell’s been around for 15 years is often our staff were donors before they ever came to apply to a job at Givewell. and so often the common thread is that they were very excited about the idea of uh research-driven transparent charitable giving. They started donating and then eventually, you know, found their way to working for us uh and you know, that’s that’s been a great pipeline of of folks coming to join the team over the years.
Scott: Um what what else should we know about Givewell or the organization you know, look, we have transparency. We’ve got a great thesis here. We’re going to optimize for human life or social good here and we’re going to find that find quantitative ways to back that up and be highly confident in that. We’re going to do this to the tune of $600 million, uh maybe 900 million soon. We’ll see how how long it takes you to get there. Um, and and we’re we’re you you what you just, you know, came in with was this swagger. Hey, we’re we’re so we we people believe in us so much. They they take care of all of that. So every incremental dollar that a person listening to this might might give goes straight to the next most, you know, the next best marginal opportunity uh to do good as best as we can determine with that. What else should we know? Is there anything else that that that we we should leave uh uh know about Give well before we conclude here?
Guest: Yeah, um, I mean, I think maybe the the single most important thing to know about Givewell is uh, you know, something along the lines of you don’t have to take my word for it. You know, one of our core values is transparency and to that end, uh you know, pretty much everything we talked about in this conversation, you could go to our website, you could read about, you could find the the footnotes that support the claim, you know, the academic paper that the footnotes come from, the the documents uh or the notes from the conversations with the charity. and uh the the the reason that we want to do it that way is uh in the charitable world, it’s just all too easy for someone to, you know, tell a nice story and get donors behind something and then have it all fall apart. and so we say, you know, forget the story. I mean the story is nice and emotion is um ultimately what sort of drives me to do the work I do is emotion but then at the end of the day, I also want to be able to see the the spreadsheets, see the cold hard facts and make a reasoned decision. And so what, you know, we want to do to the outside world is say to anyone who wants to uh, you know, look at look at what we do, if if you agree with it great, and if you disagree with it, you know, then you’re in a position to know because we’ve put that information, we’ve we’ve put that information out there.
Scott: I love it. And one one thing that I’ll call out that you haven’t discussed here is this concept of the mistakes that Givewell has made, which I think is is a great effort a great uh uh put putting a pin in the context the comment of around transparency. Could you walk us through a couple of those big mistakes that you are highlighting on here and and why you’ve chosen to put that into your navigation bar on your platform?
Guest: Yeah, I mean it it comes back to the same thing that often uh, you know, people sort of pretend that they’ve never gotten anything wrong. and I mean, that’s just obviously crazy. We all make mistakes all the time. and we think it’d be much better uh especially in in the nonprofit sector if organizations were uh just public about the things they got wrong because uh that would enable not only the organization to learn but also other organizations to learn from them. Uh I mean we’ve made all sorts of mistakes that are on that page. Uh, you know, we early on in Given’s history, so this is talking like 15 years ago, we marketed ourselves too aggressively and you know, we wanted to put that out there so people would know. Um, we’ve made and and we’ve also just made like silly spreadsheet errors that have led us to um, you know, send some funds to an organization, you know, to to one organization over another. Um, you know, in the scheme of things, it it adds up to a small percentage of our overall giving, but we think it’s really important to be transparent with the the public and then also to ensure that internally we have a culture that learns from mistakes. So we have that public page. internally, uh at Givewell and and our we use uh slack as the sort of internal IM client we use and we have a mistakes channel there where people can just say they got things wrong. And we think it’s just uh it’s going to lead to a much better culture and uh you know, one that’s focused on learning and getting better rather than one that’s trying to you know, avoid error. if we are open about the fact that we made mistakes so we can all learn and improve.
Scott: Let me ask you one more question here, not to put you on the spot too hard, but a very notable uh former billionaire was really into this concept of effective altruism and this sounds a lot like effective altruism, this this concept. Could you describe what effective altruism is for for those interested, how this relates and why uh you know, why why we should still continue to do the work that is is in Givewell’s mission here?
Guest: Yeah, so I’d say that um, you know, effective altruism is uh, you know, a set of ideas that say let’s use reason and evidence to try to do as much good with our time and our money and um, you know, give well subscribes to that in in the sense that, you know, we’re trying to use our reason and our evidence to identify ways of helping people in low-income countries as much as possible today. And and I think that, you know, the the principles that we followed and the process that we followed has led us to find some really great organizations that have helped uh you know, a ton of people in our history.
Scott: Love it. I I think that effective altruism is a fantastic fantastic concept. and that uh in spite of the the problems that have gone on with FTX and and San Bank and all that kind of good stuff, uh a silver lining hopefully is that more people become aware of this concept because it is it is very powerful to think about how do I give effectively across the course of my life in a way that has the maximum impact for society? And to do that with a quantitative-based approach. And so that’s something that I think I was really excited to to talk to you about. Um and obviously most people that are practicing this are are are are doing so with with good intent. So yeah, what anything else you want to share with us before we go?
Guest: Uh no, thanks so much for having me. It’s been great to have this conversation and uh I hope I hope it helps.
Mindy: Thank you, Ellie, and I appreciate your time today. Give us the website again one more time.
Guest: Yeah, we’re at www.givewell.org.
Mindy: All right. Thank you so much for your time and we will talk to you soon.
Guest: Sounds great. You too. Thank you so much.
Mindy: All right, Scott, that was Ellie Hassenfeld from givewell.org and that was a lot of fun. You know, the one thing we didn’t talk about is talking about your, talking about your your charitable giving with your employer, seeing if your employer has a match of any kind when you are getting ready to make a contribution, um especially towards the end of the year. I know that Bigger Pockets has a donation matching program and if you are considering giving on Giving Tuesday, reach out to your HR department and ask them if they do any sort of match and that is another way to make your dollars go farther.
Scott: Yeah, absolutely. You know, after the show we were asking um, Ellie, how many lives do you think you’ve saved with give well. And I think he estimated at a 150,000 across all of the the money that they’ve raised. And you know, yeah, sure, some of that some of the donations might have gone to saving lives anyways, but the marginal increase the number of lives saved by moving funneling those funds to the most effective organization is probably 100,000 easily uh uh people saved. It’s just it’s just really, really good work. So, what an impressive guy, what an impressive organization. The scale is remarkable and uh I hope um I hope he continues to do this work for a long time and I hope more people uh follow suit. I want to give one more plug here. I uh, we talked about Givewell for a lot of this show, but I want to talk for a moment about an organization that Bigger Pockets has partnered with uh a little closer to home here. This organization is called Cross Purpose and it’s an organization that I have volunteered at personally for about seven years, um or on and off over the the past seven years and have donated to personally. And Cross Purpose is a career development program. So it takes folks that are often living at around the poverty line, its mission is to abolish poverty and it does that through a uh a career development program that involves six months of career development um of a skills based program that um teaches leaders how to put together the resume, do interviewing skills, and then a specific career track that can range from electrician to uh administrative assistant, to medical assistant, to CDL. Uh it’s commercial driving license for truck drivers and beyond. and graduates of the program go on to make $20 an hour on average and have successful careers, many of them. and I’ve I’ve gotten to know a handful of these graduates and I’ve seen the uh the impact of the program. So this they they rigorously track the social ROI that they’re generating um and generate an estimate of about a five to one impact on every dollar invested in terms of the taxes paid, the reduction and benefit government benefits that they’re uh that the leaders that participate in the program will receive um for those who go on to graduate. So I’ve really been impressed with the program, really um have witnessed the scale of it over the last couple of years and and really excited to see where it goes. So highly encourage everyone to check out cross purpose um as another option for giving this holiday season.
Mindy: Uh, I want to reiterate those tips again from Ellie for doing your own research. Uh be proactive, don’t respond to solicitations, go out and do your own research based on charities that you want to support, causes that you want to support. Be open-minded about what you want to support, press the organization about their successes and how they will know their system isn’t working. Ask them what will you do with additional funding, and give money rather than goods and give with no strings attached.
Mindy: All right, Scott, I had a lot of fun with this episode today. I love the concept of Giving Tuesday and I think this is a fantastic fantastic organization, givewell.org is the name of the organization. That wraps up this bonus episode of the Bigger Pockets Money podcast. Thank you so much for listening. From the Bigger Pockets Money podcast, he is Scott Trench and I am Mindy Jensen quoting Yoda saying live long and prosper.
