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References for "Why we’re excited to fund charities’ work a few years in the future"

Footnotes

[1] "We thus expect that donations to Malaria Consortium today will support its work in 2022, which we generally expect to be highly cost-effective…For donors who wish to give to a specific charity, we recommend Malaria Consortium’s SMC program, as we believe it continues to have a highly cost-effective and large unfilled funding gap after receiving GiveWell discretionary funding." GiveWell blog, "Allocation of discretionary funds from Q4 2019," March 17, 2020

[2] "A time lag between receipt of funds and distribution is an inevitable part of the process of organising a mass distribution. In our experience, a sensible time frame is approximately 23 months and we have set out below the detailed reasons for this. We also note that there is significant room for more funding even if this period is much shorter." AMF comments on GiveWell questions for June 4, 2020 call (unpublished)

[3]

  • "After receiving funds we assess which net programmes should be prioritised and then enter initial discussions with the NMCP and partners to do due diligence. This involves understanding:
    • the malaria rates and resistance data
    • the net need and their locations
    • funding situation of funders
    • partners’ capacity to implement AMF requirements particularly electronic data collection

    "This process requires input from multiple partners, the timing is not completely in our control and usually takes around 4 months." AMF comments on GiveWell questions for June 4, 2020 call (unpublished)

  • "AMF's role in LLIN distributions is to…
    2. Find distribution partners (in-country non-profit organizations or government agencies) to carry out LLIN distributions. AMF and its partners agree on expectations for the distribution, including who pays for costs other than the purchase price of LLINs (which are always covered by AMF), the process that will be used to carry out the distribution, and what information will be collected and shared with AMF." GiveWell, Against Malaria Foundation, November 2019

[4] "The next stage is to share a draft agreement and negotiate the clauses. This usually involves multiple extended rounds of emails with discussion points, changes and counter changes. Given that both NMCP and AMF are engaged with other ongoing programmes, each negotiation loop can take several weeks. Once the final document is agreed, signatures are sought from the Minister of Health and a representative of the Ministry of Finance. This internal process can take time... Overall, while there is wide variation in this aspect, a reasonable average based on past experience is for the negotiation process to be around 4 months." AMF comments on GiveWell questions for June 4, 2020 call (unpublished)

[5] "The typical tender process includes establishing the specifications (net chemical component, sizing, denier, colour, timeline, etc), receiving submissions from manufacturers, negotiating and making final selections. This takes approximately 3 months. We then place orders and manufacturing of nets usually starts 1 to 2 months afterwards, depending on production capacity." AMF comments on GiveWell questions for June 4, 2020 call (unpublished)

[6] "Production and inspection of nets can take up to 4 months, depending on quantity, type and manufacturer’s capacity. International shipping and customs clearance can take up to 3 months. Shipments to PNG and to East Africa are faster. West and Central Africa are at the slower end of the spectrum. In-country transport from the port to the regional/district warehouses then normally takes between 1 to 2 months, depending on distances and logistical constraints." AMF comments on GiveWell questions for June 4, 2020 call (unpublished)

[7] "During the registration process, national health system staff or volunteers travel door-to-door in targeted areas to collect the information used to determine the number of LLINs to allocate to each household (e.g., the number of sleeping spaces and/or the number of household members), as well as the information used to identify the household for the distribution and post-distribution surveys (e.g., the name of the head of the household and/or household location)." GiveWell, Against Malaria Foundation, November 2019

[8] GiveWell, 2019 GiveWell Cost-Effectiveness Analysis — Version 6 (public), "Results" tab, cell B26 ("Malaria Consortium vs Cash"): 15.8.

[9] In a conversation between GiveWell and GiveDirectly on June 23, 2020, GiveDirectly estimated that program participants typically receive funds between three and six months after a donation. However, it also stated that the amount of time a donation takes to reach recipients may vary depending on how accurately it has forecasted donation amounts, as well as when funds are donated (peak-season donations may take longer to disburse).

[10]

  • "A discount rate is a percentage rate by which you discount future costs or benefits: a discount rate of 5% means that for each passing year a cost or benefit is modeled as less valuable by a factor of 1/(1+5%). Traditionally discount rates have been used to evaluate projects in comparison to market rate of returns, on the principle that investing in a project that gives you $1.05 in a year is not particularly better than not investing, since you could keep your money in the stock market and make on expectation the same return. You should see having $1 today or $1.05 dollars next year as equally valuable, and the easiest way to model this is to use a 5% discount." GiveWell, Emma Trefethen - Discount Rates - Public
  • The median discount rate used by GiveWell staff in our current cost-effectiveness model is 4%. See GiveWell, 2019 GiveWell Cost-Effectiveness Analysis — Version 6 (public), "User inputs" tab, cell C3 ("Staff aggregate").

[11] You can see our calculation here.

  • We did not incorporate the expectation that GiveDirectly program participants receive money 3 to 6 months after a donation is made, as this would have resulted in a moderate amount of additional complexity in our calculation.
  • We calculated a discount rate of 316%, which we rounded down to the nearest hundred.

[12] This work takes many forms. We update our cost-effectiveness estimates to reflect new data. We monitor research journals and ask our network which interventions or charities we might have overlooked. We support the creation and scale-up of new organizations. We have begun to research organizations in new, promising areas like policy-oriented philanthropy.

[13] GiveWell blog, "Allocation of discretionary funds from Q1 2019," June 12, 2019

  • "We currently believe that AMF has a more time sensitive funding need than Malaria Consortium, and our best guess is that it will have equivalent impact per dollar to Malaria Consortium. This led us to allocate funding to AMF."
  • "AMF expects to allocate all funding that it receives in the near future toward distributing insecticide-treated nets in the Democratic Republic of Congo (DRC) in 2020."
  • "Our understanding is that additional funding received at this point in time would be unlikely to influence Malaria Consortium’s spending on 2019 and 2020 programs, and that decisions regarding 2021 spending will likely be made in early 2020, after we have made our (larger) year-end funding recommendations."