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The Effective Give Blog

Free Nonprofit Impact Evaluations

4/30/2021

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Effective Give is pleased to announce that we will be offering free impact evaluations for a select number of nonprofit organizations as we aim to develop case studies and gather informed feedback about the usefulness of our methodology. 

Enrollment will remain open until June 30, 2021, or until we reach a maximum of five participating organizations. 

Participating organizations will receive a full report and analysis of their impact along with comparative data from other participating organizations. We will also provide a limited amount of training and coaching for how the data can be used to help optimize program impact going forward. 

All costs associated with the analysis will be covered by Effective Give thanks to the generous support of our donors. 

You can learn more about Effective Give and our Impact Project here. 

Eligibility Requirements 
  • Minimum of $1mm annual operating budget 
  • Focus: Organizations that aim address no more than 10 burdens (or burden sub-types)*
  • Willingness to share information (outlined below) for past three fiscal years
  • Willingness for impact analysis data to be shared publicly
  • Willingness to complete comprehensive exit survey  

Sample of Information Collected
Coaching will be available (as needed) to help organizations gather the information below. Data from external research reports will be accepted if your organization does not track a specific variable internally (such as life expectancy data):

  • Organization/Program Burdens (and burden sub-types)*
  • Key Characteristics of Target Population (for each burden being analyzed): 
    • Average Age
    • Average Life Expectancy (Without Intervention)
    • Average Life Expectancy (After Intervention)
    • Average Duration of Burden
  • Key Program Attributes: 
    • Total Expenses 
    • Number of Intervention Attempts
    • Case Rate 
    • Intervention Efficacy Rate

Have a question or want to learn more? Email matt@effectivegive.org to start a conversation. 

*What are burdens and burden sub-types?
​Burdens represent something that causes suffering in our society. Cancer would be an example of a burden. Sub-burdens are subsets that offer more specificity to an issue, Lung Cancer would be considered a burden sub-type 1, and  Distant Lung Cancer would burden sub-type 2. 

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Moneyball For Nonprofits: Using Data To Strategize and Win

3/25/2021

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Winning in sports is pretty straightforward. Every team knows what to aim for, such as winning the World Series in professional baseball. But what does winning look like in the nonprofit sector? Many would say impact, and we would agree. However, there is not currently a standardized way measure impact - so we cannot use it to truly separate the winners from the losers. 

We would argue that winning, or creating impact, can be defined and measured by how successful an organization is at reducing (or averting) suffering in the world. When it comes to measuring impact, the challenge we face is that there is no general consensus for how to place value on our ability to reduce (or avert) suffering, and we are therefore unable to measure it. 

It is not that we do not place value judgements on suffering as a society, we do. However, these decisions tend to be made more unilaterally and in relative privacy than collectively and in the open. This is in part due to the moral and/or ethical implications that are associated with these value judgements. You and I might have different opinions about who to help when faced with a choice between two individuals suffering from different diseases. So who is right? I imagine that we will both be able to find data that supports a compelling case for our conclusion. Even if we ultimately agree after having a thoughtful debate, does this make our decision correct given all of the alternatives? Is everyone else likely to agree with our conclusion? Should anyone else be allowed to have input in this decision?

As a society, we tend to only take our strategic planning so far when it comes to positively influencing impact. We typically stop at measuring outcomes and we typically only evaluate alternatives within similar cause areas (cancer v. cancer rather than cancer v. education). We generally do not attempt to compare across cause areas because the outcomes are not easily comparable. Using our sports analogy, this would be like trying to determine a single World Series winner for the entire league by only comparing teams within their respective division. Lord knows we would never reach general consensus on that. 

It is not practical to expect society to come to a precise determination of value that we can all agree on; this would be like expecting all baseball fans to cheer for the same team. However, it is reasonable to expect that we can establish a set of rules and scoring systems to help rank teams (nonprofits) according to their impact. This doesn’t mean that second and third place teams are bad or unworthy of support, it just means that they may need to adjust their strategy to be the best next year. The same is true for the non-profit sector. 

There are already significant resources being used to measure outcomes. Those nonprofits that engage in these activities can typically report the number of people served or patients treated (equivalent to the number of games won) to help convince donors (fans) that their organization is worth supporting. Measuring these things are both important and necessary first steps in the process of measuring impact, but they only represent part of the answer. If measuring outcomes represent 80%, then measuring impact is the final 20%. 

Outputs, outcomes, and impact are common terms when it comes to measuring success in the social sector. Measuring outputs are like measuring a player’s stats, they help identify who is playing their position well but they don’t necessarily tell us who won the game. Outcomes can be useful in telling us who won the game, but they won't tell us who the best team in the league is. (In the social sector, trying to compare outcomes from two separate organizations can sometimes feel like trying to compare teams playing two different sports.) Quantify impact is similar to having a World Series winner in baseball in the sense that we are comparing all teams on a relative basis to determine an ultimate winner, and we are ranking the rest of the teams according to their merit. 

As we mentioned already, “winning” in the social sector can be determined by quantifying the value that comes from reducing or averting the burdens that cause suffering in the world. By assigning value to these burdens we can create a scoreboard that helps us evaluate the impact of outcomes on a level playing field. Because each burden is assigned a value we would know how much credit nonprofits should receive each time their program successfully resolves or averts the burden, giving us the ability to compare that organization to another even if the burdens are completely different. 

We have thought a lot about how to create a scoring system for the social sector given the moral and ethical implications mentioned earlier. Our current approach is not perfect, but we believe it provides a strong foundation to build on, read our previous blog post for a more detailed overview. Generally speaking, we believe that the process of assigning value to burdens should be democratized to reflect society's collective perspective, but a case could be made for mining the data from smaller groups such as experts or stakeholders. 

The point is, we believe that we owe it to those we seek to help to optimize impact within the social sector. We believe that one of the best ways to do this is by using better data to keep score and learn from the winners.

What does any of this have to do with baseball? 

If you have ever read the book, or seen the movie Moneyball you likely already have a general understanding of how data can be used to win even when the cards seem to be stacked against you. For those unfamiliar Moneyball - it is a story of how the Oakland Athletics used data to make to, then win, the 2002 World Series with a team budget that was among the lowest in the MLB (just one-third of the New York Yankees that same year). This success did not happen by chance, the team was able to capture four American League West titles and make five playoff appearances from 2000-2006. 

Data provided what the best coaches and consultants could not - a clear roadmap with tight feedback loops to optimize their strategy quickly and with greater levels of confidence. In the years since, the ‘Moneyball’ approach has been adopted by most winning teams in the MLB. We believe that a similar success story will be written about the social sector once we have, and use, the right data. 

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A Standard Scoring System for Impact in the Social Sector

3/11/2021

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A Standard Scoring System for Impact in the Social Sector
Burden Weights Sample and Use Case

This article provides samples of the data that Effective Give has been collecting through our Daily Good Program. This data can be used to create a universal scoring system for the social sector, making it possible to compare impact across non-profit cause areas. We believe that this data has the potential to increase the impact produced from the social sector by 10x over the next decade. 

Important disclaimer: This is sample data only. We are not publishing final data for these burdens because we have not hit our target margin of error for each data point (we need a higher sample size to achieve this). We wanted to share this information to start a conversation and see what we might learn from those seeing it for the first time. Please consider joining the conversation by providing feedback in the comments. 

Data Collection 
The data was collected using surveys from Effective Give’s Daily Good program. Participants receive surveys either via email or a mobile app. Each survey represents a single burden that causes suffering in our society and participants are asked the same three questions for each burden. Participants are prevented from taking surveys more than once. 
In this sample we will be reviewing data from five burdens: 
  1. Localized Bone Cancer 
  2. Fur Farming 
  3. Distant Lung Cancer 
  4. Alcohol Use Disorder 
  5. Localized Stomach Cancer 

The descriptions and common symptoms that we use for each of these burdens is captured in the index at the end of this article. 

Question Structures
We use three separate questions structures to gather data for each burden. These are:
  1. Standard Gamble: This structure is designed to capture the upper bounds of the most severe burdens by asking participants to gamble between life/death for the chance to resolve each burden for 100 of those currently affected by it. 
  2. Visual Analog Scale: This structure is the simplest for users to understand and helps to capture the lower bound of burdens that might not be captured in the other two question types. 
  3. Time Trade-Off: This structure helps to capture a user’s propensity to “give something up” to help resolve a burden. It can be particularly useful for burdens that are not severe enough to warrant a gamble on one’s life but would warrant some sort of sacrifice which might not be captured in the visual analog scale question structure.

Analyzing the Data 
The first three charts (black) capture the data for each burden from each of the three question structures. One of the things that we are continuing to analyze is how each question type impacts the answers for each burden to identify potential trends, issues, and benefits. Ideally, we would be able to limit our survey to a single question to capture an accurate representation of how society values each burden. However, we need to test whether this is viable and whether it negatively (or positively) impacts that “accuracy” of the answers. 

The final chart provides an aggregate of the means (averages) from each of the previous three graphs along with the range of those means. 

All graphs show the range of data, which is indicated by the line for each burden, and the mean of the results which is indicated by the dot.
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Data Use Case – The “Scoreboard”
The vision behind this project is to establish a comprehensive database of these burden weights. This is the key data that is preventing the social sector from having a universal metric that can be used to measure impact across and within cause areas. Assuming this data had a low enough margin of error, it currently does not, we could use it to assign a “score” each time a burden is averted or resolved by a charity. Combining this data with other existing data such as cost per outcome would very quickly help individual donors, foundations, and charities to understand where they stand in terms of impact using a single metric.

Understanding this impact is essential for truly moving the needle for impact in the social sector. We would contest this is far more effective than a money moved strategy (i.e. advocating that funders move money to the highest impact program/s) because it creates room for funders to optimize for impact within the confines of their existing bias framework (such as location bias or cause bias), which is not something that a moved money strategy does well. The rigidity of a move money strategy is what alienates the vast majority of donors that are not ready to go “all-in” with using logic, reason, data to dictate their funding decisions.

What are your thoughts? Is this data needed? Does the social sector need a common impact metric? Where should we prioritize this project relative to other current programs?

We need more participants in the Daily Good program to produce statistically significant results. If you are willing to sacrifice 30 seconds per day to contribute to this data please visit https://www.effectivegive.org/daily-good.html to sign up. 
Index 
Burden description and common symptoms used during data collection:
  1. Localized Bone Cancer
    1. Description: Cancer is a disease caused by an uncontrolled division of abnormal cells in a part of the body. Bone cancer is very rare in adults. It starts in the cells that make up the bone. Cancer starts when cells begin to grow out of control. Cells in nearly any part of the body can become cancer, and can spread to other parts of the body. Localized cancer is limited to the place where it started, with no sign that it has spread. There is a 91% 5-year survival rate for localized bone cancer
    2. Common Symptoms: Bone pain, swelling and tenderness near affected area, weakened bones, fatigue, unintended weight loss.
  2. Fur Farming 
    1. Description: Animal Rights refers to the rights of animals, claimed on ethical grounds, to the same humane treatment and protection from exploitation and abuse that are accorded to humans. The killing or use of non human animals or animal parts for the purpose of manufacturing clothing. Fur Farming is the process of breeding or raising certain types of animals for fur, especially mink, chinchilla, fox, dog, cat, and rabbit. The fur can be obtained after killing or slaughtering an animal.
    2. Common Symptoms: Death with potential for suffering prior to slaughter.
  3. Distant Lung Cancer 
    1. Description: Cancer is a disease caused by an uncontrolled division of abnormal cells in a part of the body. Lung cancer or bronchogenic carcinoma refers to tumors originating in the lung parenchyma or within bronchi. It is one of the leading causes of cancer-related deaths in the United States. Distant cancer has spread to distant parts of the body. There is a 5% 5-year survival rate for distant lung cancer.
    2. Common Symptoms: Persistent cough, coughing up blood, shortness of breath, chest pain, hoarseness, losing weight without trying, bone pain, headache.
  4. Alcohol Use Disorder 
    1. Description: Chemical Addition refers to addiction that involves the use of substances. Alcohol use disorder (which includes a level that's sometimes called alcoholism) is a pattern of alcohol use that involves problems controlling your drinking, being preoccupied with alcohol, continuing to use alcohol even when it causes problems, having to drink more to get the same effect, or having withdrawal symptoms when you rapidly decrease or stop drinking.
    2. Common Symptoms: Unable to limit alcohol consumption, the desire and inability to reduce alcohol consumption, feeling strong craving for alcohol, failure to fulfill obligations due to alcohol use, eliminating or reducing social activities or hobbies, increased tolerance to alcohol, withdrawal symptoms such as nausea, sweating and shaking when alcohol is not consumed.
  5. Localized Stomach Cancer 
    1. Description: Cancer is a disease caused by an uncontrolled division of abnormal cells in a part of the body. Stomach cancer starts in the stomach and is also called gastric (GAS-trick) cancer. It starts when cells in the stomach grow out of control and crowd out normal cells. Localized cancer is limited to the place where it started, with no sign that it has spread. There is a 70% 5-year survival rate for localized stomach cancer.
    2. Common Symptoms: Pain or tenderness in abdomen, nausea, blood in stool, anemia.
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Most Donors Pay Too Much - A Non-Traditional Look At How Donors Can Pay Less and Achieve More in 2021

1/14/2021

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Overview
  • Nearly 70% of donors giving between $500-$2,499 per year miss out on the benefits of a charitable tax deduction
  • FICA tax mitigation strategies are commonly overlooked as a strategy to reduce the cost of donations. 
  • Most donations could cost 37-39% less 

Do you donate to charity? If so, there is a decent chance that you are paying more than you should to make an impact. We know this because for years we have watched donors make contributions, yet not qualify for charitable tax deductions simply because they did not know that there is a better way to support their favorite charity. We have also helped donors maximize their gifts by not paying more than is necessary. 

As an organization, we typically focus our content on helping donors optimize their impact by being more strategic about where they give, since this is where the greatest opportunity is to improve charitable impact. This article focuses on how donors can improve how they give with the intent that they will be able to reduce unnecessary taxes and increase their donations without increasing the cost of giving. We encourage you to explore our other programs if you are interested in learning how to measure the impact of the charities you support. 

Which donors pay too much?
The Tax Foundation estimates that only 13.7% of taxpayers itemized their taxes in 2019. Because you can only claim a charitable tax deduction if you itemize, this means that 85%+ of taxpayers were not even eligible to claim a charitable tax deduction in 2019. To be fair, not all taxpayers donate to charity so the percentage of donors that are missing out on this deduction is likely far lower. One poll of 630 US donors found that only 44% of donors that gave more than $2,500 per year, and just 31% of donors giving $500-$2,499 actually itemized. From our perspective, donors that give to charity and also claim a standard deduction are the first group of donors paying too much. 

The second group of donors paying more than they should are any donors giving from income that is subject to FICA taxes. This is a much larger group, but the potential benefits are smaller than those not able to claim a charitable tax deduction.

The Four Letter Tax
FICA. The Federal Insurance Contributions Act (FICA) is a law that mandates a payroll tax on both employees and employers to fund Social Security and Medicare programs. For 2021 the FICA tax rate for both employers and employees is 7.65% (6.2% for Social Security and 1.45% for Medicare), this is consistent with 2020. One change that was made for 2021 was an increase to the maximum earning subject to the Social Security portion of this tax (the Medicare portion does not have an earnings threshold); this increased from $137,700 in 2020 to $142,800 for 2021. Combining the employee and employer portion of this tax brings the total to 12.4% if you are an employee making less than $142,800. There is also an additional Medicare tax paid by employees making more than $200,000. 

These taxes are the second greatest source of tax revenue of the Federal Government; second only to income taxes. Taxpayers often hear about strategies to reduce income taxes (business deductions, retirement account contributions, flex spending plans, etc.)  but we have found that strategies to reduce FICA taxes are few and far between. 

When we started to design our workplace giving program so that employees and their employers could have a better way to raise money for charity - we studied the tax code closely for opportunities to minimize the cost of donations using traditional and non-traditional tax mitigation methods. As a result we were ultimately able to design a program that reduces both FICA tax liability and income tax liability, something truly unique as most programs only reduce a donor’s adjusted gross income (AGI) and only if the donor itemizes their taxes. 

How Much Are Donors Overpaying?
We find that it is common for donations to cost 37-39% more than is necessary in total. This represents a roughly 25-30% savings to individuals, with the remaining savings going to employers via FICA tax savings. 

Realizing this savings allows donors to give significantly more without creating an additional burden on their budget. Imagine the impact that an additional 30%+ of donations would have on the charities benefiting from our donations. 

What Is The Solution?
Effective Give has designed a Workplace Giving program that helps reduce the cost of donations with benefits to both employees and employers. The program is specifically designed to reduce both FICA tax liability and income tax liability for those that would not normally be able to claim a charitable tax deduction. Our team handles all of the administrative aspects of the program and there is no additional expense to the sponsoring organization. 

If you are an employer or employee interested in learning about how you can optimize your donations through Workplace Giving we encourage you to reach out to our team to learn more by emailing us at workplace@effectivegive.org 

Curious about your savings? Use our calculator to estimate how you (and your employer) could benefit from Effective Give’s Workplace Giving Program and reduce the cost charitable giving.

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Daily Good Program Overview

1/14/2021

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Daily Good is a program where volunteers sign up to vote on the level of impact that various burdens have on our society. With just 30 seconds per day – volunteers contribute by answering three questions about a burden that is the focus of one or more non-profit profit programs. The volunteers' answers are then added to a database to create a score called a burden weight. We use burden weights to measure how much a burden is perceived to negatively impact society. Once enough data is collected to have a statistically significant result, we publish the weight for each burden. Using our impact calculator donors (and charities) can then use these weights to help them understand how much of an impact is made each time a particular burden is averted or resolved by a charity’s program. By measuring the weights of burdens we can normalize the manner in which we compare two burdens, thereby giving us the ability to compare the impact of two (or more) charities even if the programs are focused on producing very different outcomes. 

Currently, there is no universally accepted measurement for charitable impact. When donors make a strategic decision about where to deploy charitable resources, they typically rely on stats and data that communicate outputs rather than impact. For example, a soup kitchen might communicate the number of meals served – but this does not measure how much the meals have increased the quality and/or quantity of life for the beneficiaries. Communicating outputs instead of impact is also problematic for donors that want to compare organizations that focus on different burdens.

Having a database of burden weights empowers donors and charities to measure impact in a manner that is consistent with the collective perspective of society.  This data can empower the non-profit sector to prioritize impact over outcomes, learn from other charities with higher impact, and optimize program strategies in a more effective manner.  
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There is a tremendous disparity between the impact of the average charity compared to the top charities, and this is in part because of the lack of data to communicate impact in a consistently comparable manner. Though we have not yet collected enough data to confirm our hypothesis, we estimate that the non-profit sector is currently operating at a fraction of its potential impact. 

Program Implementation - Beta
The Daily Good Program will be administered starting 2/1/2021 via a daily survey that is delivered to volunteers via a mobile app or email. Participants will be asked to answer three questions about a single burden. Questions are standardized, using a combination of one Standard Gamble (SG), one Time-Trade-Off (TTO), and one Visual Analog Scale (VAS) format to gather information from each volunteer in a consistent manner.
 
A general overview of each burden, along with symptoms will be delivered to the volunteers as a primer to the questions. We recognize that these overviews and symptom descriptions may be subject to criticism by experts as there may not be a standard consensus for defining these burdens in each field. Our initial plan to address critiques is to publish the descriptions and symptoms along with burden weights for transparency. We also plan to adjust these descriptions over time if any of the descriptions are deemed inadequate. If any material edit is made to the burden description we plan to restart the process of collecting burden weight data for that particular burden and archive the inadequate results. 

The program will be a run in a “beta” phase for the first several months. During the beta phase we aim to gather general feedback from volunteers, compare answers for each burden, determine consistency (or lack thereof) from the various question structures, and gather initial feedback on the credibility of the results relative to any established weights for burdens published by other sources. 

Initially we will aim to collect data from at least 100 unique volunteers as a sample size threshold for publishing a burden’s weight, however we anticipate that this threshold may increase depending on the variability of the results. 

At the individual volunteer level, burden weights will represent personal preferences with regards to the weight of each burden. For some donors cataloging these results to help them prioritize their own decision making could offer value when it comes to deploying charitable resources. However, our primary aim with this program is to deliver a broader set of data that reflects society's collective perspective about each burden’s impact by publishing the results of an adequate sample size. 

Our long-term goal is to provide a public database which not only makes burden weights easily accessible, but also to use the information to begin to measure and compare charitable impact using a standardized metric of $/QALY (cost per quality adjusted life-year). Additional information about how we calculate $/QALY can be found in our Giving Guide and individuals may also use our impact calculator to begin measuring impact immediately.
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Potential Impact
A loose, but arguably conservative, estimate is that top-tier charities are at least 10x more effective than the average charity in the U.S. Our vision is that the nonprofit sector will achieve 10x greater impact without increasing charitable giving norms. 

Volunteers interested in singing up for the Daily Good program may do so here.

Questions about the Daily Good program or our Impact Project can be directed to our team by emailing support@effectivegive.org 

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What is Effective Altruism and Why Should You Care?

1/8/2021

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Much of the work that we focus on at Effective Give is inspired by a growing movement called Effective Altruism. I first stumbled into this community in 2013 after reading The Life You Could Save written by Peter Singer – a moral philosopher and Professor of Bioethics at Princeton University. Singer is not the founder of the EA movement, but he was, and continues to be, an influential supporter of the core tenants of Effective Altruism. I can still clearly recall a moral dilemma from the first chapter of the book that functioned as a trailhead to the journey of exploring how we can help better the world.

On your way to work, you pass a small pond. On hot days, children sometimes play in the pond, which is only about knee-deep. The weather’s cool today, though, and the hour is early, so you are surprised to see a child splashing about in the pond. As you get closer, you see that it is a very young child, just a toddler, who is flailing about, unable to stay upright or walk out of the pond. You look for the parents or babysitter, but there is no one else around. The child is unable to keep his head above the water for more than a few seconds at a time. If you don’t wade in and pull him out, he seems likely to drown. Wading in is easy and safe, but you will ruin the new shoes you bought only a few days ago, and get your suit wet and muddy. By the time you hand the child over to someone responsible for him, and change your clothes, you’ll be late for work. What should you do? – Peter Singer, The Life You Can Save

I am sure that your response is as simple as it seemed to be for me the first time I read this passage. Who cares about the shoes, the suit, or being late for work – given the opportunity we are jumping in to help the child. Then Singer hits us with a ton of bricks…

10 million children under the age of 5 were dying per year for causes related to poverty. An overwhelming number of these deaths are completely preventable with low-cost interventions that are readily available in most developed nations. While this data has improved marginally since the publishing of Singer’s book, we are still facing these very tragic statistics globally. A point that Singer goes on to make is that nearly all of us could save the lives of others with fairly little effort or sacrifice. In answering the hypothetical dilemma—where we can see the child drowning—most of us state that we are willing to help, but contrasted with reality, most are not taking the necessary steps needed to save the proverbial drowning child.

At the time I was reading Singer’s book I was an active donor, fundraiser, volunteer, and was in the process of launching a non-profit. However, I was not yet thinking about philanthropy in the context of optimizing impact. I was not very strategic, and I was generally responding to the most obvious opportunities. I was reactive. I always felt that my heart was in the right place, but never realized until reading more about Effective Altruism that my head needed to be there as well. There is no doubt that many would-be beneficiaries missed out because I was not yet focusing my volunteer and fundraising efforts with adequate intention.

Truly effective philanthropy requires a balance of both the head and the heart. We must be both empathetic and strategic. That is the foundation of Effective Altruism.

Effective Altruism is a philosophy and social movement that advocates using evidence and reasoning to determine the most effective ways to benefit others.1 It is concerned with helping the proverbial drowning child and challenges us to think about the responsibility that we each have be good stewards of our resources for the purpose of contributing to the greater good. We should care about Effective Altruism for the same reasons that we care to make any positive impact. Effective Altruism provides a framework for us to do good, better. It provides us with the opportunity to do the most with both our head and heart to relieve the suffering of others. I have jokingly used an analogy to introduce Effective Altruism to people in the past – Effective Altruism is what Mother Teresa and Albert Einstein would have named their child – something that marries compassion and intellect to produce something truly beautiful.  

While we are still working to collect enough data to substantiate our hypothesis, it is our estimation that the U.S. Non-Profit sector is operating at a fraction of its potential in terms of impact. Through better data, greater accountability, and additional resources that help donors measure and optimize impact we can work to close this gap within our lifetime.  

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