Clear Fund Business Plan
From GiveWell
| The content below is out-of-date, and is not actively maintained. |
| We have not taken it down because it can serve as useful information on the history and approach of our project, when taken in context, but all up-to-date content can be found on the main GiveWell Site at www.givewell.net. Any views expressed on particular nonprofit organizations do not represent our current views and positions. |
We plan to establish the Clear Fund, the world's first grantmaker that is devoted to transparency, because we believe this is the most effective way to address the need we see for an excellent donor resource - thus giving individual donors, who account for the lion's share of giving in the U.S., a way to give more effectively and participate in global dialogue about how to improve the world.
This page gives our full business plan - why we are doing the project, how we plan to execute it, and the opportunities it represents for a donor - at several different levels of detail. Transparency means not just sharing information but making it usable and useful, so if you're having trouble using our materials or finding what you need, let us know.
Full business plan
The business plan is designed to be printable, and it includes "Exhibits," mostly reproductions of webpages, that are both large and unnecessary if you're planning to read it while online. If you want a much smaller file that excludes these Exhibits, download the following instead:
Brief overview
The following gives a brief overview of our plan, hitting all the highlights while indicating where to go for more information.
The need
- The project came from personal research to inform our own charitable giving. It isn't enough for us to give to a reputable organization – we want to give to the best, and accomplish as much good as possible with our donations. GiveWell started as a part-time, voluntary collaboration between friends trying to figure out how to do this, with a focus on humanitarian aid (reducing suffering and increasing opportunity).
- Existing donor resources fall severely short. They generally restrict themselves to financial statement analysis and charities' broad self-descriptions; they couldn't help us with the question of what different charities actually do and how effective it is. See Appendix B and Appendix C
- We asked two simple questions: what does a charity do with donated funds, and what evidence is there that it is effective?
- Our questions proved hard to answer. Charities were unprepared for them; working with them took a lot of work, and went better and faster when we put more money (personal donations) on the table. Broadening our search, we found private foundations unwilling to share their own information, and a general lack of transparency in the sector. See Appendix A and Appendix D
- We looked harder and found enormous opportunities to help people in need, from deadly (but preventable and/or curable) diseases in the emerging world to inequities in education and opportunity in the U.S. See main document, "Big problems with complex solutions"
- However, there is no existing consensus on how best to address these problems. Different organizations use many different strategies and combinations of strategies, and it's difficult to get to the bottom of what works best for whom. See main document, "Big problems with complex solutions"
- We put everything we found on the Web, at several levels of detail, including every source was used in footnotes, so that other donors don't have to repeat the work we did. See our current website at http://www.givewell.net
- The benefits of a good information resource for donors would be enormous. Helping even some donors to make better decisions would make a huge impact, and could potentially lead charities to compete more on strategy and effectiveness than on fundraising savvy, as well as opening global dialogue on how to improve the world. See main document, "What we can accomplish"
The plan
- We will act as a grantmaker, giving us the leverage we need to get good information. See main document, "The Plan"
- Unlike all current grantmakers, we will be devoted to sharing our information and empowering individual donors. We will seek out scalable organizations that others can donate to, and we will put every single thought behind our decisions - the good, the bad, and what we still don't know - into readable, organized reviews on the web, allowing people to follow what we've done if they have a little time or a lot. See main document, "Transparency via the web"
- We will focus in our first year on New York City and Africa. Although we hope eventually to cover a large part of the nonprofit sector, for now we will focus on a subset of causes within the general category of humanitarian aid, aiming to give people lives of full opportunity (in contrast to charities like the Make-a-Wish Foundation, etc.) See main document, "Scope"
- We separate charities into causes by philosophical goal. Charities will be directly compared, and compete for grants, only within the same cause; this helps to keep comparisons meaningful and preserve donor control over philosophy. See main document, "Scope"
- We will demand thorough information from charities, and give unrestricted grants to the best ones. Our goal is to get the money to the best charities, not to micromanage them. We believe that the combination of freedom and competition is the most promising way to generate and fund great ways of helping people. See main document, "Evaluation process"
- We will favor charities with demonstrably excellent strategies for helping people. We believe that good self-evaluation is both difficult (due to the complexities of social problems) and extremely important. See main document, "Evaluation criteria"
- Like all grantmakers, we will make debatable decisions. There is no perfect information in this area; every giving decision involves judgment, intuition, and common sense. We believe that this is why existing grantmakers hesitate to be open in their decision-making – and exactly why the most valuable qualification a grantmaker can have is a commitment to a transparency. See main document, "Why us?"
- Our short-term goal is a useful, usable donor resource by December 2007. At that point, we will put our energy into publicizing it – which we expect to be able to do (See Appendix F). We will ask those who like the way we make decisions to give to our own fund (though they can designate donations for particular philosophical goals); those who don't want to trust us can use our information and draw their own conclusions. Our fundraising at that point, once we have a proof of concept, will determine the scope and direction of our project beyond 2007. See main document, "Timeline"
- We project a first-year budget of $473,600: $123,600 for operating expenses, and a target of $350,000 ($50,000 per cause) in grant money. See main document, "Budget"
The opportunity
- We offer the opportunity to give now and give with help. We believe that the "return on good" from giving now is far superior to saving money and giving it later. Giving through the Clear Fund means picking outsourcing the hard work of finding the most effective way to help people. See main document, "Your opportunity"
- We are far superior to others who offer this opportunity. Managed giving can also be achieved through a community foundation or United Way (at a local level), or personal foundation or philanthropy advisor (for highly involved, custom work). None of these leverage your research expense in the way that we do, opening it up completely to global dialogue. See main document, "Your opportunity"
- We seek thoughts, feedback, donations, and contacts. If you have any of these to offer, we will give you recognition, control over the philosophical goal your donation is used for, and the knowledge that you are helping people in the most effective way possible.
- More information: Our full business plan contains a great deal more detail. You can also check out this website and our blog for more of a sense of how we operate, or contact us directly: Holden@givewell.net, Elie@givewell.net
