What I learned after 5 months of charity research

This article was originally published by Sorosh here. Have a look at his Medium profile for more of his insights and stories.

After selling Videoplaza me and my wife wanted to finally give something back and I got to research the world of charities. The guys at Founders Pledge became our guides and I even joined their team as an EIR part-time in NYC for about 5 months. Here I want to share the results simplified and hopefully help you give better!

How to maximise impact close to your heart

Our main criteria for giving was maximising effectiveness / impact within our passion causes / geos. We looked at Iran/Kurdistan and extreme poverty. Eventually our donation was split between Yari who helps children in Iran stay in school and GiveDirectly who gives out cash to extreme poor and here’s structurally why:

Cash is king — both orgs give out cash to poor, a method that is extremely well researched and consistently beats other methods of help.

Cash is efficient — can be transfered through mobile transfers or just hard cash. It’s quick, light weight, dead cheap to manage compared to managing food, tools, building wells, medicine etc.

Cash is effective – the receivers can use it for THEIR needs. One family might want to invest in a new business, another has a sick daughter, the third needs a new roof — all different yet essential needs that will help improve the lives of these families. Cash helps solve the needs of the receiver and is not based on the core activity of a specific charity.

What goes around, comes around — the cash that lands in a community, is often spent in the community empowering local businesses and has impact beyond the receiver.

End to end control — these orgs have no middle men and control their entire process which enables full control/visibility over costs, processes and vulnerabilities, and direct feedback from receivers. With a chain of suppliers orgs often lack the full picture of their work, are exposed to big risks, and become very focused on donors rather than receivers. Yari and GiveDirectly don’t.

And below, more info on both:

Yari:  the promising startup with a fantastic foundation for growth

This organisation is led by a fantastic leader in Siavoush Mohammadi, a Big data and visualisation consultant. Yari has during the last 5 years gone through a professionalisation and digitalisation process that has set them up nicely for significant growth. They have better tools, processes and knowledge about their work than most of the largest organisations in the space.

All this said, the organisation is pretty small with 500 supported families and no paid staff(!). The opportunity to grow the organisation is massive and with a vision to grow towards 5000 children in the coming 5 years, the first step is now to expand with paid staff which is what our donation will help support.

GiveDirectly: efficient giving at scale

I was lucky to spend some quality time with the management team at GiveDirectly in NYC and their achievements so far are mind blowing. They have the data to support that cash transfers is, by a large margin, the most effective way to help the poor, and they are pushing this category in so many ways. They have done extensive research with the world’s leading scientists and are now doing the world largest UBI trial. Michael Faye who runs GiveDirectly also runs Segovia, a for profit business simplifying mobile payments across countries and operators, a product they use themselves.

GiveDirectly are considered one of the worlds top charities by GiveWell as they fulfill their tough criteria around evidence, transparency and scale. I also really like the fact that their successful approach is making life tough, rightly so, for many other less impactful / transparent charities. If Cash is King, GiveDirectly are the Kings of Cash.

To sum it up…

While how and where one gives back is quite personal and subjective, the measurable impact of a donation is not. One donation compared to another can have significantly more or less impact. I hope with this post that more people will ask tough questions around impact, evidence, research and transparency when it comes to charity. And if you don’t have the time to do the work, you now have two charities that you know we have personally put our money on.