This is the third of four posts that form our annual review and plan for the following year. This post reviews and evaluates GiveWell’s progress last year as an organization and sketches out some high level goals for the current year. The first two posts covered GiveWell’s progress and plans on research. The last post in the series will look at metrics on our influence on donations in 2016.

First, a point of clarification. GiveWell as a legal entity currently employs both (a) staff whose work is described on givewell.org (finding outstanding evidence-backed, cost-effective programs) and (b) staff who work on the Open Philanthropy Project. We expect Open Philanthropy to become a separate organization this year (more below), pending board approval. The scope of this post is limited to (a) – the parts of the organization that will not become part of Open Philanthropy. Open Philanthropy has written about its progress and plans in this post.

Below, we first note three high-level points about where GiveWell is as an organization today. We then reflect on four questions that are important for thinking about our performance as an organization:

• Do we have sufficient staff capacity?
• Does our impact justify our operating expenses?
• Does GiveWell have a positive and accurate public image?
• Are we in a stable financial position?

Major organizational developments

Separation of the Open Philanthropy Project

We had aimed to complete the transition of Open Philanthropy staff to a new entity by the end of 2016 and did not accomplish this goal, though we are now effectively operating as two separate teams. We now expect, pending board approval, to complete the legal split by mid-2017. After the split, there will continue to be some shared staff between the organizations (GiveWell staff will track the time they spend on work for Open Philanthropy and GiveWell will bill Open Philanthropy for the time). We will continue to share office space.

GiveWell as an entity currently employs 35 staff members. After the split, we anticipate that GiveWell will continue to employ 15-20 of the current employees and that Elie Hassenfeld will remain as Executive Director of GiveWell. Holden Karnofsky, Co-Founder of GiveWell, currently spends very little time on GiveWell and will work full time for Open Philanthropy.

Outreach is now more of a limiting factor than research

We’ve gone from feeling that we had more funding available than we had good giving opportunities to a situation where we believe that strong giving opportunities have surpassed available funding. We estimate that we left over $100 million worth of very strong opportunities (top charity execution level 1 or 2 gaps, excluding GiveDirectly) unfilled last year.

This is due to increased research output (we added three new top charities and two new standouts) in 2016, an expectation of increased research output in the future (from our standard process and Incubation Grants), and decreased expectations of funding from Good Ventures. In a change from the previous year, Open Philanthropy’s tentative guess is currently that the “last dollar” it will give (from the pool of currently available capital) has higher expected value than gifts to GiveWell’s top charities today, leading it to recommend that Good Ventures cap its giving to GiveWell’s top charities at $50 million in 2016.

We expect to put more emphasis on expanding our outreach to potential donors interested in following our recommendations in 2017 than we have in past years. We are at early stages of thinking through what that might involve.

Organizational maturity

GiveWell will be 10 years old this year and we feel that we’ve reached a relatively stable place in our development. We are now making a major effort to strengthen our organizational infrastructure through filling specialized roles, particularly in operations (finance, donations management, technology, etc.); formalizing policies and procedures; and creating contingency plans for replacing senior staff.

Four key questions

Below we pose and respond to four questions about how we are doing as an organization.

Do we have sufficient staff capacity?

Operations: To date we have not had sufficient capacity for operations and have been slower to make improvements to our systems than we would have liked. In the last year, we have begun to make major changes to GiveWell’s operations team to try to correct for this. Sarah Ward was named Director of Operations, a new role, and we are pursuing a strategy of (a) hiring specialized firms to handle more of the HR and IT work that generalist staff have done in the past; (b) replacing our external accountants and auditors with firms that specialize in non-profits; and (c) moving current staff into and hiring for specialized roles, such as a donations manager, donor relations assistant, controller, and office manager. Our number of generalist operations staff has decreased; we expect to continue to have a need for a small number of generalist staff to manage relationships with external firms and fill gaps between specialist domains.

Our current operations team includes a Director of Operations, two operations generalists (who work on the website, accounting, recruiting, personnel management, donation processing, and IT), an Office Manager, an Administrative Assistant, a Donations Manager, a Donations Assistant, and a Donor Relations Assistant. We are hiring for an Operations and Legal Program Manager and expect to hire for additional roles in the coming months. After the expected spinoff of Open Philanthropy into a separate organization, the office manager, administrative assistant and one of the operations generalists will divide their time between the two organizations and Sarah will manage operations for both organizations temporarily; Open Philanthropy will begin building a separate operations team this year.

Research: Seven staff work on GiveWell’s research full time or close to full time. Elie Hassenfeld, GiveWell’s Executive Director, spends about half his time on GiveWell research. Elie spends the other half of his time on a combination of the Open Philanthropy project (about 20% of his time currently) and overseeing outreach, recruiting, and operations for GiveWell.

Josh Rosenberg and I have taken over much of the research work that Elie and Holden, co-founders of GiveWell, used to do, including all updates on current top charities, reviewing top charity contenders, managing research staff, and some intervention assessments. Holden now spends almost no time on GiveWell research.

We feel that we have sufficient capacity to follow up with our current top charities, consider promising contenders for top charity recommendations, and make decisions about Incubation Grants. We do not yet have sufficient capacity for reviewing the evidence for and modeling cost-effectiveness of interventions. We aim to make at least one hire for this work in the next few months. More on this in our post about our research plans for the year.

Outreach: As noted above, we feel we’ve reached the point where we are identifying outstanding giving opportunities more quickly than we can expand our reach to donors to fill the opportunities. Throughout most of our history, we felt that the opposite was true, that the amount of funding we could influence surpassed the opportunities we had identified, so this represents a significant shift for us. We don’t yet have concrete plans for future outreach work, but expect to give outreach significantly more attention than we have in the past.

We currently have one staff member, Catherine Hollander, who works on outreach full-time. Our outreach priorities in 2016 were to speak or meet with all major donors who were interested in talking to us, take any opportunities that came up to discuss our work with the media, and continue posting regularly to our blog. We feel that we accomplished our goals for connecting with major donors and keeping up with media requests, and fell short on blogging.

Catherine is leading the search for a Research Analyst, Outreach Focus to do more of the types of outreach we’ve focused on in the past, namely connecting with more media and major donors, and increasing the frequency of blog posts.

Does our impact justify our operating expenses?

GiveWell’s impact on donations (or “money moved”) to our recommended charities likely decreased somewhat in 2016. We are in the process of gathering and analyzing data on our influence on donations, but expect it to be in the range of $80-90 million to recommended charities and $9.2 million for Incubation Grants. Money moved to top charities in 2015 was $110 million.

Good Ventures’ giving to top charities fell from about $70 million to $50 million, due to changes in the way it is allocating funding across priorities and to a large one-off grant to GiveDirectly in 2015. Based on GiveWell’s recommendations, Good Ventures also funded $9.2 million in Incubation Grants, up from about $400,000 to $500,000 in each of 2014 and 2015.

Over the same period, we spent approximately $2 million on our operations. In total, GiveWell as an entity spent about $5.5 million on operational expenses, of which $3.5 million was spent on the Open Philanthropy Project.

We previously wrote that we believe that expenses that are 15% of money moved are well within the range of normal, so we feel comfortable with the relative size of our operating expenses at this point.

Does GiveWell have a positive and accurate public image?

We believe that GiveWell’s public image is largely positive and reasonably accurate. This is true for all or nearly all of the major media coverage we have received. See, for example, coverage on NPR and in The Atlantic, Esquire and Vox.

There are two aspects of our public image that we would like to change. First, media has sometimes portrayed our top charities as having guaranteed impact and as being the “best” charities—for example, a 2015 article in The Atlantic said, “If what you want is to save lives with certainty, several people said, you have to go to GiveWell.” We believe that our top charities offer the highest expected value among evidence-backed opportunities that we have found to date, but are not risk-free and may not be the best giving opportunities for donors with different values or unique expertise, connections, or resources. Second, charities may have an inaccurate view of the costs and benefits of engaging with us—more in this post.

Our biggest public image project in the last year was launching a redesigned website. This project took much longer than expected. The original launch date was April 2015, but due to unexpected problems and lack of staff capacity, it didn’t go live until September 2016. Our previous website had an outdated look and confusing architecture. We think the new one is a large improvement, though we aim to make some further improvements in the future.

Are we in a stable financial position?

The short answer is yes.

In 2016, we raised about $3 million in revenue available for funding our operations that was not specifically for funding Open Philanthropy Project expenses (Open Philanthropy has, recently, been fully funded by Good Ventures). We have roughly projected GiveWell’s expenses (excluding pre-split Open Philanthropy expenses) at $2.7 million in 2017 and $3.2 million in 2018. Given our money moved to top charities and our experiences with fundraising in the past, it seems reasonable to expect that we will be able to raise this funding, though we expect to do a more detailed analysis of our financial situation once the details of the split with Open Philanthropy have been fully worked out.

We do not expect revenue available for operations to decrease as a result of splitting with Open Philanthropy because most major donors have told us that they support GiveWell due to our work identifying top charities. We think it is likely that Good Ventures will continue to support 20% of GiveWell’s operational budget, as it has for the last several years.