This is the third post (of five) we’re planning to make focused on our self-evaluation and future plans.

This post answers a set of critical questions for GiveWell stakeholders. The questions are the same as last year’s.

Is GiveWell’s research process “robust,” i.e., can it be continued and maintained without relying on the co-Founders?

Where we stood as of Feb 2012

We wrote:

We currently have 3 full-time analysts, and have made an offer to an analyst who will start in July, which would bring GiveWell to 4 full-time analysts. We continue to focus on recruiting and hope to reach 6 full-time analysts (8 total employees) summer 2012.

Analysts take the lead on most charity investigations; co-founders may provide basic guidance and sign off on work before it is published. GiveWell Labs, because of its experimental nature, will be led for the time being by co-founders.

Progress since Feb 2012

Following February 2012, we made two full-time hires and one part-time hire; one of the full-time hires departed GiveWell the same year. We also saw the departure of another analyst who had started in January of 2012 (and was included in the above quote). On net, therefore, the size of our staff rose by one part-timer. We also employed a summer intern and a trial hire, both of whom may become full-time employees this year.

Due to time sensitivity, the review of GiveDirectly – our new recommended charity in 2012 – was led by co-founders, rather than analysts. (See our shortcoming on this matter.) In addition, much of the work we put into deepening our research was led by co-founders. Analysts played valuable roles, and made far greater contributions than in previous years, but the share of work done by co-founders was higher than it would have been if we had not been dealing with this time sensitivity.

Two positive developments on this front in 2012:

• Our capacity has improved significantly because of the maturation of existing employees. We now have several analysts who are able to add substantial value on a regular basis, improving our capacity. Alexander Berger has been promoted to Senior Research Analyst and represents an expansion in our capacity for top-level investigations. Natalie Crispin has taken over primary management of GiveWell’s financials and donation processing (which was previously handled by co-founders) and is now Research Analyst and Financial Manager.
• Our research process has become better systemized. 2012 was the first year in which our process for investigating a top charity remained substantially the same as in the previous year, and we feel that this bodes well for our ability to train analysts to take on more of this process in the future.

Our work on GiveWell Labs is still new and exploratory, and thus is led by senior staff.
Where we stand
We currently have three full-time and one part-time analyst, along with the two co-founders. We are currently re-thinking our hiring process and the roles and qualifications of people we wish to hire.

Although analysts have taken on more responsibility, we remain reliant on GiveWell’s co-founders for significant core research work. Elie Hassenfeld is heavily involved in managing and conducting individual charity/giving opportunity investigations and Holden Karnofsky is heavily involved in completing literature reviews for the evidence of effectiveness and cost-effectiveness analyses for interventions.

What we can do to improve

We intend to make hiring a priority over the coming year, but are not yet sure of exactly what path this will take. We have some ideas for finding new hires more effectively than previously, including (a) evaluating people via trial work rather than relying on interviews when possible; (b) considering more senior hires with experience that is directly relevant to the work our research analysts do. We don’t believe we have yet found a reliable formula for hiring people, though we believe we are improving on this dimension, both through trial and error in hiring and through getting a better sense over time (via repetition) of what work our employees need to do.

Does GiveWell present its research in a way that is likely to be persuasive and impactful (i.e., is GiveWell succeeding at “packaging” its research)?

Where we stood as of Feb 2012

We wrote:

As traffic to our website has increased over the past 12 months, we would guess that the importance of better packaging our research has risen. In particular, we feel our site is poorly suited to donors who want to spend more than a few minutes but less than an hour on our site. (We have designed the site to make quick action easy and to provide significant depth, but we have no “middle level” of depth for gaining some information relatively quickly.)

Progress since Feb 2012

None. This has continued to be a low priority over the past year.

Where we stand

We continue to believe that the lack of mid-level content is a shortcoming that likely prevents us from reaching some potential donors.

What we can do to improve

We have several ideas that we could execute in order to produce more “mid-level” content regarding our recommendations, but we do not plan to prioritize this work in the coming year.

Does GiveWell reach a lot of potential customers (i.e., is GiveWell succeeding at “marketing” its research)?

Where we stood as of Feb 2012

We wrote:

As detailed previously, our growth remains robust:

• We tracked over $5 million to our recommended charities in 2011 compared to approximately $1.5 million in 2010.
• The number of donors who gave to our recommended charities grew by about 3x in 2011 compared to 2010.
• Our website traffic roughly doubled in 2011 compared to 2010.

As long as we continue to grow at ~2-3x (which continued thus far in 2012), we will consider our growth to be strong, and will not consider outreach to be an urgent priority.

Progress since Feb 2012; where we stand

Although growth in 2012 continued to be strong, it has decelerated relative to the 2-3x per year growth we experienced through 2011. Our total money moved for 2012 was estimated to be over $9 million (we haven’t yet finalized the tally), compared to a bit over $5 million for 2011; excluding two particularly large and unrepresentative donors, it was $5.5-6 million for 2012 as compared to ~$3.4 million for 2011 and ~$1.4 million for 2010. (Details on metrics are forthcoming.)

In addition, we believe the following developments may have long-term significance for our ability to increase our money moved:

• The evolution of our relationship with Good Ventures and work on GiveWell Labs, both of which we hope will allow us to have more influence on donors giving $1+ million per year over the long run.
• Our relocation to San Francisco, now completed. This relocation
  • Allows us to work more closely with Good Ventures.
  • Allows us to investigate the hypothesis that we can reach more major donors in San Francisco than we could in New York. Several of our supporters have advanced this hypothesis, and there are a few reasons to believe it might be true: (a) Silicon Valley may have more major donors who are still relatively uncommitted (whereas many of the major donors we’ve met in New York City often sit on multiple boards and have largely already determined their charitable priorities); (b) it may be easier to network in Silicon Valley (we’ve observed that our most prominent connections in the finance industry have very limited connections to other major donors, whereas our most prominent connections in Silicon Valley have many connections to other major donors); (c) the culture of Silicon Valley may be more amenable to certain of our key values (particularly transparency, innovation and rational altruism). That said, there are conceptual arguments going both ways. What seems most relevant to us, from the perspective of deciding where we should be based, is that (a) GiveWell’s network in San Francisco already appears to be about as strong as our East Coast network, despite the fact that we’ve been based on the East Coast since the inception of our project; (b) the benefits to GiveWell if this hypothesis turns out to be correct (i.e., if we end up appealing to many major donors on the West Coast that we couldn’t have connected with from the East Coast) are much larger than the costs if it is incorrect (since we have a solid understanding of our East Coast network and its potential and don’t feel GiveWell is giving up much by moving, as long as we continue to spend some time on the East Coast maintaining relationships).

What we can do to improve

We believe that we could improve growth in money moved by improving the “packaging” of our research – not only by providing a middle level of detail but also by generally working harder to make an emotionally compelling case for our top charities. However, we do not plan to prioritize this work in the coming year.

We intend to raise the priority of GiveWell Labs, which (as discussed above) will hopefully broaden the donor base we are able to reach and result in significantly more money moved.

Is GiveWell a healthy organization with an active Board, staff in appropriate roles, appropriate policies and procedures, etc.?

Where we stood as of Feb 2012

We wrote:

We were happy with our board and policies…. We project revenues that will meet expenses for 2012 and currently have what we consider a safe level of cash reserves. We project a deficit for 2013 but expect to be able to fund the gap using the strategies laid out above.

Progress since Feb 2012

We are still finalizing our 2012 financials, but preliminarily, we believe the 2012 revenues exceeded expenses. We made some modifications to our Board of Directors. We added GiveWell co-founder Elie Hassenfeld; we also added a Board member in 2012 who has departed in early 2013, and added another Board member in early 2013.

Where we stand

We are still finalizing our 2012 financials, but preliminarily, we project a deficit for 2013 according to our most aggressive hiring projections. If we do hire as planned we may increase the priority of fundraising, but currently, given our level of cash reserves and continued growth in revenue, we are happy with where we stand in this area.

What we can do to improve

We intend to continue taking opportunities to raise funds for GiveWell operations when the opportunities present themselves, but do not intend to make fundraising for GiveWell one of our primary priorities (or uses of time) for 2013. The same broadly applies to recruiting new Board members (we intend to take available opportunities but do not plan on spending significant amounts of time on active outreach for this purpose).

What is GiveWell’s overall impact, particularly in terms of donations influenced? Does it justify the expense of running GiveWell?

In 2011, we had money moved of over $5 million with expenses of $356,000, a ratio of 14:1. $1.75 million of the $5 million came from grants from Good Ventures and pre-commitments to GiveWell Labs; the remaining $3.25 million would produce an approximately 9:1 ratio.

We are still finalizing the figures for 2012, but we estimate that our total money moved was over $9 million with expenses of ~$700,000 (the latter includes $150,000 that we’re counting as in-kind donations and expenses from the Google Grants free advertising program, even though no money entered or exited our bank account for these “expenses”), a ratio of ~13:1. Excluding two particularly large and unrepresentative donors, the remaining ~$5.5 million would produce an approximately 8:1 ratio.

We continue to believe that the “money moved” by GiveWell is more than enough to justify our operating expenses.