Giving What We Can is a community of effective givers – an international society that helps people commit to giving more, and giving more effectively. Our members donate at least 10% of their career incomes to the charities they believe will help others the most.
Over the last year, our community has doubled in size. Our members have now collectively donated more than $10 million, and pledged over half a billion dollars! We have been testing out a range of ways to attract and retain new members, and seem to have found some to be really successful. Amongst these are setting up new local chapters and engaging in individual outreach. We would like to capitalise on this by scaling up some of the most promising avenues for attracting and retaining new members. To do so, we need to increase our team size. We've been lucky enough to have had really excellent applicants in our recent recruitment round. In order to carry out our plans — detailed in our fundraising prospectus — we need to reach our fundraising goal.
We think that the most relevant considerations for choosing whether to donate to us are our strong track record, and our plans for growth. But we also regularly calculate our effectiveness, to ensure that we are providing a substantial leverage ratio for our top charities. Our most up-to-date estimate for this indicates that for every $1 spent by Giving We Can, around $103 (counterfactually adjusted and time-discounted) will be moved to top charities.
Our budget for 2016 is £475,000, of which we already have £193,000 pledged. We therefore need to raise a further £282,000. You can find a full breakdown of our budget, along with details on our plans and our cost-effectiveness estimates on our fundraising page — you’ll also find a link with instructions for how you can donate. If you have any questions, please get in touch with me at michelle.hutchinson@givingwhatwecan.org.
If you decide to support us, I’d like to extend a huge thanks on behalf of the whole team — your generosity means that we can continue to help make the world a better place as effectively as possible.
Hi Kieran,
Michelle is in a better position to answer some of these, but I'll answer the ones I can. I'd also suggest having a look at the comments section of our last fundraising prospectus, which covered some similar ground and which may provide more detail to some of your questions.
1) This is largely covered in the step Accounting for members donating a different amount than they pledged, which uses data from members who have reported their donations in My Giving, and comparing their actual donations with their pledges. The upper bound estimate in the Giving Review (80% of people keeping their pledge) uses the same dataset, but only takes into account a binary 'pledge met' vs. 'pledge not met'. The ratio of pledges to donations (117%) has more bearing our calculations because it captures both people who donate less than they pledge, and people who donate substantially more. Overall, due to people on average donating more than their pledge, the ratio is actually larger than 1:1 (so, even if only 80% of members hit their pledge amount, the number of people donating more than their pledge means the cohort as a whole donates more than it pledges).
The only quibble that you might have here is whether this cohort (people who report donations in My Giving) donates at a substantially different rate than people who don't report their donations (after we've factored out people who have both gone silent, and stopped donating, as per the earlier Accounting for membership attrition step). We have good reason to think this isn't the case (we know a lot of people personally who choose not to use My Giving, but who keep their pledges), but if you were more pessimistic about this, you could downweight the Ratio of Actual Donations to Pledged Donations in the spreadsheet (currently 1.17).
2) As above, this was calculated using data from members who have reported their donations in My Giving, and taking the ratio between their pledged amount and their reported donations, averaging over all members. See this section of the impact page for more info.
3) To clarify, are you talking about the impact of changes to members' income over time, or asking whether we're accounting for potential changes to donation patterns over time which affect the counterfactual ratio?
We're currently calculating our counterfactuals based on the amounts members say they would have donated without us — we haven't modelled behaviour changes into the future, and I'm not sure what we'd base such a model on. Whether it's conservative or optimistic is unclear, but I'd say that this is probably a wash — it's hard to know whether people's predictions of what they would have donated are overall optimistic or pessimistic. In our conversations with members, many people who say that they would have donated 10% without us also tell us that we're a useful commitment device (indicating that perhaps they wouldn't stick to their 10% without us, and that our counterfactual impact is actually greater than what we've accounted for in the model).
If you're just talking about the effect of members' income on the counterfactuals (because the calculations assume they will be static, when in reality income is likely to rise) then we think the calculation is fairly conservative. See the Donations Pledged By Members section of the impact page:
Footnotes 7 and 8 expand on this:
See also this comment made on the last prospectus for some discussion of the effect of modelling changing income over time. Using the same model with the updated figures yields a ratio of between 69:1 (using a fairly arbitrary starting pledged amount of $4,200,000 which produces donations over members' careers equivalent to the $344 million pledged amount, but accounts for income growth) and 157:1 (assuming that the current pledges correspond to current income levels, and that all members are at the beginning of their careers). You can play with this assumption by editing the figure in cell C2 on the 'Calculations' sheet of this spreadsheet, and the income growth rates at the bottom of the column.
5) We've taken into account an additional year (2014), where we had strong growth, but where our costs were not significantly higher. Our membership more than doubled (386 in 2009-13 vs 792 in 2009-14) but our costs only went up by around 40% (£238k in 2009-13 vs £332k in 2009-14). The assumptions have remained essentially the same, so the difference in those ratios accounts for most of the difference (with a less significant amount being due to small changes in membership attrition and counterfactual pledge ratios).
As we note in the caveats, we do expect this amount to go down in future as our staff costs increase, and we don't want people to fixate on it as a predictor of our impact. We see it more as a sanity check of whether we're a good bet, vs giving money to other effective causes.
The degree to which this will change significantly in future really depends on how strong our member growth vs. costs growth is. If the cost of creating a new member hits diminishing marginal returns soon (not at all unlikely), then it's likely to drop back fairly quickly. We don't see this as particularly troubling — so long as our absolute number of members keeps increasing and the ratio is positive, then we're still a good bet.
We doubled staff numbers over 2015 (3 > 6) and we're hiring again now (6 > 8 or 9, depending on fundraising), so it's likely that this will push it back down. We think that maximising future membership growth will be contingent on broadening the skillset of our team (and just having more hands on deck to do outreach work would be a huge help!). Expanding the team, strengthening our organisation, and increasing our growth rate seems very important right now (and much more important than maintaining this ratio at the current level). My guess is that it will settle somewhere between 20:1 and 60:1 — not quite as impressive as 104:1, but still suggestive that we're making a big difference!
(This difference is similar to the reason that we don't think that using "overhead" is a good measure of a charity's effectiveness. In effect, this is our overheads increasing, but so long as this leads to greater (counterfactual) overall member growth and donations to top charities, then we should be happy for the ratio to drop.)
6) Hauke, our Director of Research answers this question here. The short version:
Hope that helps!
Hi Kieran,
Glad it’s useful!
Sam’s covered most of what I would say, but on 4): I think he’s right that it’s difficult to know to what extent growth is down to particular actions of our staff versus other growth factors (although we do have a bunch more information than we did back then). There are a lot of different factors at play, and often there are a lot of necessary conditions for someone becoming a member. Often it’s difficult even to know the difference between ‘organic growth’ and ‘staff activities’ – does someone joining due in part to an action ... (read more)