How to tell good charities from bad ones?

There are many different levels of being effective in our giving. Not all charities are created equal. To do the same thing, some might spend hundreds while others might spend thousands. No one wants to donate to ineffective charities, but how do we determine a good cause from a bad one? Luckily this problem has already been addressed by a new and growing website called "Givewell".

Givewell has strict methods for evaluating and ranking charities as is laid out on their website.

Their general approach is to first review as much information as they can on the subject matter relating to charities in a certain area (e.g. different ways to treat/prevent HIV). The second step is to try and find as many charities as they can to review them. Next they evaluate them some basic criteria to rank them from most to least promising. Finally they go through the most promising ones and try to do an in depth review  “through phone calls with charity representatives; reviewing internal documents including monitoring and evaluation reports, budgets, and plans for using additional funding; reviewing independent literature and evidence of effectiveness of the charities' programs”.

Givewell gets high praise from other philanthropists and activists in the field because of their rigorous scientific methodology. An excerpt from their website below explains their criteria for choosing a charity:

“We primarily look for charities with strong documented track records, highly cost-effective activities, and concrete needs for more funds. Recommended charities must be highly transparent and accountable, i.e., willing to share enough in-depth information about their work that we can assess them on these criteria.”

In essence, Givewell has something that most other charities evaluators lack; they look at the total amount of good done instead of just looking at a simple metric like overhead (how much the charity spends on things outside of the intervention such as staff and marketing). This allows them to come to much better conclusions than most others.