This post is the first in a multi-part series, covering how GiveWell works and what we fund. We’ll add links to the later posts here as they’re published. Through these posts, we hope to give a better understanding of our research and decision-making.
Why cost-effectiveness matters
The core question we try to answer in our research is: How much good can you do by giving money to a certain program?
Consider how much good your donation could do if you give to a program that costs $50,000 to save a life versus one that costs $5,000 to save a life (which is roughly what we estimate for our top charities). Giving to the latter would have 10 times more impact. While in an ideal world both programs would receive funding, we focus on identifying the most cost-effective programs so that the limited amount of funding available can make the greatest difference.
The basics
We’ve written in detail here about our approach to cost-effectiveness analysis and its limitations. Our bottom-line estimates are always uncertain, and we don’t expect them to be literally true. At the same time, they help us compare programs to each other so that we can direct funding where we believe it will have the greatest impact.
At a very high level, assessing cost-effectiveness generally involves looking at:
The cost per person reached. For example, how much does it cost to treat one child with vitamin A supplementation for one year?
The outcomes of the program. Determining these outcomes often involves examining two factors:
The overall burden of a problem. For instance, how many kids who will be reached with vitamin A supplementation would otherwise have died?[1]
The effect the program has. For example, how much does vitamin A supplementation reduce mortality rates relative to that baseline, and are there other benefits to providing vitamin A?
We use unconditional cash transfers as a benchmark for comparing opportunities, such that a program is estimated to be “12x cash” if we believe it’s 12 times more impactful per dollar than giving money directly to people living in poverty. In other words, if we estimate that a program is 12x cash, we think donating $100 to that program does as much good as donating $1,200 to a program that delivers unconditional cash transfers.
More detail
We aim to come to an all-things-considered view that