“There’s no universal metric, no analogue in a nonprofit,” Buchanan said. “I can improve graduation rates in Miami by 10 percent and I can reduce carbon emissions in the U.S. by 1 percent, and how do we compare the impact of those things?”
In 2007, two former hedge fund analysts formed GiveWell and caused a stir when they introduced a more rigorous assessment approach, using research skills honed in the corporate world.
“We were accused of spying. It was totally unbelievable to a charity, the idea that any donor would want questions answered,” said Alexander Berger, a GiveWell research analyst.
Their early reviews were based solely on the information provided by the charities and required intense questioning and review, and sometimes site visits, drawing the ire of some nonprofits who failed to get their endorsement. Over time, GiveWell realized charities often aren’t equipped to provide the detail they demand, Berger said. So now they also rely on academic research to determine an organization’s effectiveness.
Still, not every organization can be neatly assessed, he said.
“Sometimes the point of everything is to experiment and do new things and you don’t have an academic base,” Berger said. “If you’re a small donor, or unless you have a lot of capacity and actually know the people involved or have insider knowledge, it probably makes sense to back a super proven organization and then let the Knight Foundation fund a lot of innovative stuff, because they have the capacity to follow and track it.”
The Knight Foundation, in fact, is currently expanding its assessment team to three members.
So whether you give big or small, the tools that let you choose have never been better. And effectiveness, it turns out, is entirely up to the individual donor.
“I’m not solving any big issues of poverty or whatever,” said Fryd, who typically writes checks without many zeros. “Sometimes somebody just needs $62 for rent. I just found my little place where I think I do my little projects and I love it. It’s like an addiction for me. It’s really wonderful. And I’ve just met the greatest people.”