BiggerPockets Money Podcast - 358: Giving Tuesday 2022: Which Charities Will Use Your Money Wisely?

Episode Date: November 29, 2022

For the past decade, Giving Tuesday has been a way for everyday Americans to donate their money, or time, to charities and causes that help collectively make the world a better place. Whether it���s a little or a lot, we’re encouraged to give what we can to bridge the gap between those that have so little and many of us that have so much. But how do you know a charity or organization is using your donation accordingly? How can you spot-check to see if your dollars are being used for those in dire need? We brought on Elie Hassenfeld, GiveWell co-founder and CEO, to help us navigate the tricky subject of giving to worthwhile charities. Elie knows a thing or two about validating which charities are worth donating to. At GiveWell, he spends his days researching thousands of charities for hundreds of millions of donatable dollars, helping those of us that are too busy to find a home for the donations that we are willing to give. In just six tips, Elie will give you the framework for finding a worthwhile charity or organization to give to, so you know that your dollar is being stretched the farthest it can. We also touch on whether or not high administration costs are ared flag, whether it's better to give goods rather than money, and how to truly measure an organization's impact to see how many lives they’re saving or improving with each dollar donated. If you're still on the fence about where to give this Giving Tuesday, head over to GiveWell.org to know your dollar is making a difference!  In This Episode We Cover Why donating overseas has much more of an economic impact than domestic donations How GiveWell validates the charities they approve and how to do the same in your local area Top tips for finding a charity that will use your dollar for its highest use Red flags to watch out for when researching charities and organizations GiveWell’s past mistakes and how they’re using them to grow a better organization Top charities that both GiveWell and BiggerPockets recommend donating to (like CrossPurpose!) And So Much More! Links from the Show Find an Investor-Friendly Real Estate Agent BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Mindy's Twitter Scott's Instagram Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Subscribe to The “On The Market” YouTube Channel Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Check Out Mindy’s 2022 Live Spending Tracker and Budget Give Well   Click here to check the full show notes: https://www.biggerpockets.com/blog/money-358 Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast, bonus giving Tuesday edition, where we interview the founder and CEO of Give Well, Ellie Hassenfeld, and talk about maximizing the impact of your charitable donation. I think it's also really important to be open-minded about what you'll support. You know, if you've already focused in on a single organization and you don't want to consider any others, you just have fewer opportunities and fewer options of what you might find. And the more flexible you can be, the better. Once you've sort of got to the organizations that you want to consider, I think it's a great idea to press them a bit for, you know, how do they know their program works? Or maybe a better question is, how would they know if it weren't working? Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my very generous co-host, Scott Trench. Thank you to my very charitable co-host, Mindy Jensen. Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly. We're

believe financial freedom is attainable for everyone, no matter when or where you're starting. That's right. Whether you want to retire early and travel the world, go on to make big-time investments in assets like real estate, start your own business, or give generously to the highest possible impact cause. We'll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams. Scott, today is the 10th anniversary of giving Tuesday, an idea that was formed in 2012 as a day that encourages people to do something good. Every act of generosity counts and everyone has something to contribute toward the building the better world we all want to live in. Today we're speaking with the CEO of Givewell, an organization that is devoted to researching charities to find the highest impact evidence-based charities.

And during the show, Ellie gives some great tips for doing your own research, but he also has this whole organization that does the research for you. So I don't know about you, Scott, but I'm busy. Are you busy now that you have a baby? Or is life just all sunshines and rainbows because you got all this time in the world? Used to have free time. Have two. You'll have so much more free time. But Ellie shares some tips for doing research on your own as well.

And I think this is such a great show. Number one, be proactive. Don't necessarily respond to solicitations for money when somebody reaches out to you and says, hey, would you give me some money? look for ways that you want to impact your local charities, your local environment, a concept that you want to support. Like you want to donate to their big one is malaria. They are committed to combating malaria.

So don't wait for the malaria charities to reach out to you. Go out and look for charities that support the kind of research that you're looking for. Be open-minded about what you want to support. that kind of goes against what I just about look for specific charities. Be open-minded about the kind of charities you will support. Press the organization about their successes and how they will know when their system isn't working. That's a really good tip.

Number four, what will you do with additional funding? That's a great question to ask them. Because if they don't have an answer, why should you give them additional funding? Find somebody who has a great answer. and give money rather than goods and give with no strength attached. Yeah, I think those are a great framework that Ellie provided for us. We'll get into that, of course, as we get going. But I do want to highlight one issue that we discussed around finding a local charity

or something that is directly in line with a mission you might want to support is hard work. I would equate it to finding a real estate investment property, right? You've got to go and do a lot of research to find one good deal. You can maybe analyze 15 or 20 or 50 or 100 properties before you're going to find a really good one that's going to produce a really good ROI. And I think the same may be true in the charitable giving space to find an organization that is actually providing a good impact per dollar invested in them in a cause that you want to support. And so I think there's a process. And my recommendation for folks this holiday season is to be. begin that process in the local community, give or not give this year, but go out and find

something that you're aligned with that you feel like is doing really good work. And then also consider giving with an organization like GiveWell that has done research at the aggregate level to find the most effective way to send the next dollar you invested. You can either give directly to Give Well or you can give to an organization that they've uncovered as a highly effective organization and you can give the dollars directly to that organization. So this holiday season, I plan to do both. I plan to give to an organization that I have worked with for a long time and that I found through a process that's very similar to what Ellie recommended. And I also plan to give to give well and allow them to allocate those dollars to the next best opportunities to save lives.

I think that's awesome, Scott. Shall we start the show? Let's do it. Okay. Before we bring in Ellie, let's take a quick break. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the goal isn't just

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30-day trial at audible.com slash BP Money. And we're back. Ellie Hassanfeld is the CEO of Givewell, a nonprofit dedicated to finding outstanding, giving opportunities. Ellie, welcome to the Bigger Pockets Money podcast. Oh, it's great to be here. Thanks so much. I'm so excited to talk to you today. Yeah. Well, I'm excited to be here and share some of what we're doing. Awesome. Well, Ellie, would you mind giving us an overview of giving like an investor or how you like to think about the challenge?

I know that as investors, as an investor, I want to make sure that my any donations that I'm going to give are going to actually have the impact that I want them to have. How do you, is there a process or maybe you could help frame the art of giving effectively in a way that would be helpful here? Yeah, I'll start real high level and can dig in as far as you want. So at the big picture level, Guilte tries to maximize the impact that donations are having when, and so what we look at is metrics that we think will show that someone's giving is doing as much good as possible. So for example, when we do research on charities, we look at things like, how much does this organization have to spend to save the life of someone in need? And metrics like that are the ones that we're focused on.

Just to give a little bit of context on what Givewell does and how we focus on the world of charitable giving, because it's really large. We focus on organizations that are helping people in some of the poorest parts of the world. So that often means working on diseases in Africa or reducing poverty in Africa. And so the metrics who use, the research we do is focused on trying to achieve those outcomes that are ultimately fairly measurable and can demonstrate. that the donations are going real far. So what is the key metric that you guys are looking at? So I wouldn't say there's any metric that is the be all and end all, so to speak, but we larger look at organizations that are improving health,

and there we're mostly looking at organizations that avert deaths. So we'll say, how much does it cost to avert the death of someone who otherwise would have died? And then on the other hand, how much does it cost to increase someone's income by a certain amount, reducing poverty. There's a lot of other things that someone could look at, and I don't want to give off the impression that those are the only metrics, but at least as a starting point, those are two of the high-level outcome that we're really focused on. Awesome. And could you give us an example of disparities between groups, you know, two groups that might claim to both help people, but might

have very different economic outputs in terms of that aid? Yeah. So I think there's a lot of different types of comparisons that one could make, but I'll start just comparing a group working over to one working at home, just to give a sense of, you know, why we're so focused on overseas giving. And when, just as a quick sort of historical note, when give-old got started, we weren't just focused overseas. We also looked at groups working in the United States. But after seeing how much, how far our dollar goes overseas, we decided to focus entirely on overseas organizations. But to sort of dive into it, one of the organizations we've recommended for a long time is a group called Malaria Consortium. And one of the programs they provide is preventative medicine that, you know,

if you give it to children over the course of the malaria season, it reduces cases of malaria by a huge amount. And malaria is still a really big problem. It's not something that we talk a lot about in the U.S., but, you know, roughly speaking, 1,000 children every day are dying from malaria globally. So this is a really big problem. We estimate that it costs around $5,000 to save a life from malaria. You know, at the same time, if you look at an organization working in the U.S. on a program like education, you know, might cost one to $2,000 to $2,000 per student per year to put a child through a better charter school education program. And I want to be clear, like those are great programs too. They're having, they're doing a lot of good. But when we

compare $5,000 to save a life against, let's say, $2,000 for a year of schooling, it seems to to me, the former, the death averting charity is doing more with the funds that it's receiving. Awesome. Can you walk us through the mechanism by which one would avert malaria deaths? Yeah. So I'll give like a slightly different example because I think it's a little bit easier to understand. But I'm going to talk about another organization called Against Malaria Foundation, which we also recommend. And they fund the distribution of insecticide treated nets. And these nets are valuable because they, protect against and kill the mosquitoes that transmit malaria. And so mosquitoes tend to bite most

frequently in the evening hours when these nets are up and they're covering the people who are sleeping. It prevents cases of malaria and then subsequent deaths from malaria. And we know that this is the case, both from many randomized controlled trials, so sort of the gold standard of evidence that demonstrates that a program is working, many randomized control trials over the years that show that distributing nets results in fewer cases and fewer deaths. And then also ongoing data collection and surveys that demonstrate that, you know, when nets are distributed, the people who get them don't always, but mostly tend to use them. They use them consistently. And it leads to following malaria cases over time. So would it be fair to say that you have done an exhaustive amount of research

in trying to figure out how to stretch a dollar to its absolute most benefit to society, using a metric of human lives saved or death subverted, if you want to invert it for this, and that putting on these nets for folks that are sleeping in Africa, for children in particular, is the best bang for your buck that you've been able to validate fully or close to it. Is that another way of putting this? Yeah, I would say that nets in Africa is, One of the four or five best things that we've been able to find today. You know, one of those things that you could donate to tomorrow and, you know, with more money,

the groups that are running these programs will be able to do more of it. Nets aren't the only ones of the ones that we recommend. So there's programs that encourage parents to bring their children for childhood immunizations, distributing vitamin A supplementation to kids who are vitamin A deficient, which also reduce deaths and from, you know, in childhood, other malaria programs and then a program that we recommend focused on deworming, which is treating children for parasitic infections. And of all the groups that, you know, we've looked at in Givewell's 15-year history, those are the ones that we see as having the best bang for your buck today. And so how do you, how do you know, walk us through

givewell's process for actually validating those things? Have you, you know, have you guys done, have you been on the ground and seen these operations? Do you do analyses of the companies? How do you actually feel confident in giving us the numbers you've given us? Yeah. So there's a few different parts of our process. I'd say it starts with trying to cast a wide net and making sure that we've found all the organizations that we could consider. And so we'll get information in organizations from tax forms. Every large registered charity has to file a tax form with the IRS. That's publicly available data. I've my have gone through thousands of those and sort of as just trying to get them into the into the

into our pipeline have also been through thousands of organizations websites as a starting point. The next thing that we're trying to do is figure out which programs are having a big effect. So a program might be distributing malaria nets. And most charitable organizations don't have the resources or the capability to assess their own programs and determine how well they're working. And so often the demonstration that their programs are working comes from academic evidence. I mean, there's a whole field of experts who've been working for years trying to determine what programs will improve public health the most in low-income countries or what programs will reduce poverty the most in low-income countries. And we are not reinventing the wheel. We're leaning on this giant

body of academic evidence to determine the programs that we want to prioritize. So we start. We have this big list of organizations. organizations, big list of programs. We're looking for the programs that have the biggest effect. And then we filter down the organizations to the ones that are implementing those great programs. At that point, we need to talk to the organizations themselves, and that involves both getting information from them on their budget, meaning how much does it cost for them to deliver a malaria net using this example? Also, how do they know that when they're delivering the nets, they're actually reaching the intended recipients, that people use the, them over time, that they're replacing them when they wear out. Again, in our example,

nets, they wear out. And so we use all of that to arrive at an estimate of how much it cost for an organization to deliver a net and subsequently how much it costs the organization to avert the death from something like malaria. And then we also do site visits where we'll go to the organizations and visit them on the ground, see things in person, and, you know, just aside from sort of the, I don't know, the high level 50,000 foot view of the organization actually like being there and seeing things in person as a way of both gut checking, what we're getting in paper, but also, you know, really like seeing things on the ground, which often raises new questions that we hadn't thought of before.

Do you have any other, you know, let's say that folks do want to make an impact here in the U.S. or even in their local community? Is there a toolkit that you would suggest or that that Gable provides on on how to do that effectively? Yeah. So I think the honest answer is I think it's real hard because it's, you know, it's difficult to do this work in one spare time. But we'd love to just run through the main tips that I'd give people to keep in mind as they're trying to make these decisions. So I think the number one most important tip is be proactive. And by that I mean, you should go out and you should try to find the organizations that you're interested in.

rather than just responding to solicitations that come in the mail or over the phone, you'll do much better if you take that first step rather than waiting for someone to come to you. I think it's also really important to be open-minded about what you'll support. You know, if you've already focused in on a single organization and you don't want to consider any others, you just have fewer opportunities and fewer options of what you might find. And the more flexible you can be, the better. once you've sort of got to the organizations that you want to consider, I think it's a great idea to press them a bit for, you know, how do they know their program works? Or maybe a better question

is, how would they know if it weren't working? And you often will not get a good answer to this question, and I think that's telling. But for the organizations that have great answers, I think that, you know, it takes some work, but it's a really great way to know that they're worthy of support. A question I love is, what will you do with additional funding? So ask them essentially like, hey, I'm a donor. I'm planning to give you more. What do you think is going to be different?

Because I gave you money rather than, you know, you're not getting the money. And that's great both because it gives you a sense of what they might do, but also gives you the opportunity to come back a year later and check in and see how things went, whether they, you know, went relative to plan, whether they're on track. And if not, you know, why? And then finally, like when you actually do give, A strong recommendation is to give money rather than goods and, you know, and then give with no strings attached. And by that I mean, once you found an organization that can answer these questions, well, trust that they know more than you do about their space.

And I think donors can really make mistakes when they want their funds to support programs instead of overhead. and that can really cripple charities and their ability to build the type of strong, sustainable organizations that are necessary to tackle some of the problems that they face. I think that's fantastic. You know, to give an example in my personal life, I think it's important to give time and money to organizations in the local community because of what I do that work with financial literacy and financial empowerment, helping people escape poverty in those types of situations. and it's a process.

I must have volunteered with five or ten different organizations that each didn't align necessarily. Either I didn't feel that the donations were effective in resolving, you know, giving someone 200 bucks in a time of crisis, for example, with one organization is great work, not arguing with it. It just wasn't aligned with my values of teach Amanda Fish, right, and help that person lead their own journey out of poverty, right? And then other organizations have one-off events. And it just took me several years to find an organization that actually had a process and a social ROI as they calculated it that I believed was having an effective impact and to give money and time to that organization as opposed to some of the other ones.

It's like finding a real estate deal. You know, when we talk about it, it's a lot of work that goes into finding these things. unless you're, you know, willing to invest in the stock market or one of these things that are, you know, index funds or something. So I like to, it would be fair to say that Givewell is kind of the index fund, easy button automatic option. You know you're going to probably have a good bang for your buck in terms of a good impact through your organization. Yeah. I love that analogy because I think it's right. I mean, we're saying for the, you know, I think a lot of the people that Givewell serves are folks who,

come to the end of the year, they want to give generously and they don't know what to do. They're not going to spend the time to find the opportunity on their own. And so give well is the place they can give and feel confident that their donation is doing a lot of good. It's having a lot of impact. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch.

It helps you see exactly where your money is going. And more importantly, where your tax refund can make the biggest impact. impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on

achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place, so every decision actually moves in Edle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year. That's 50% off at monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed's sponsored jobs helps you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking.

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I don't need an astronaut. Audiences have spoken. Project Hail Mary is an awe-inspiring. masterpiece. So I met an alien. If you've fallen out of love with going to the movies, this one will bring you back. Ryan Gosling in the first must-see movie of 2026. Project Hail Mary. Only theaters March 20th. On your top charities list, I love this. You have a phrase, donate based on evidence, not marketing. And I think that so many people, I don't want to say get sucked in, because that sounds mean, but I'm sure I've gotten sucked into marketing as well. I mean,

marketing is there to give you money. It's there to, I mean, I'm wondering what sort of money is being spent on marketing that could be directed towards the actual charitable work if they would just do that. And I think it's very interesting that two of your top four charities are malaria charities. I can't believe that malaria still exists. Like, it's 2022. Why have we not found a cure for malaria yet? Well, I think with malaria, it's, you know, we know what works. And unfortunately, the people that it affects are just some of the poorest people in the world. And it's really a case where, you know, for those of us who are fortunate enough to live in a high income country, we don't even imagine, you know, what it's like to not have the,

ability to purchase a $5 malaria net and a $5 malaria net is the difference or can be the difference between life and death at that age. And so it's, you know, that's really what we're about trying to say, let's reward organizations and donate to organizations based on the impact that they have rather than their success in marketing. And, you know, I think all too often in the charitable world, basically because, you know, there's this weird fact about charities. that the ultimate beneficiary of their activity, it's not the customer.

It's not the person who's paying the money. The way it is with, you know, when we buy a product at the store, if we don't like it, we won't buy it again. But with the charity, it's the donors who pay the money. And so ultimately, nonprofits are aiming to serve those donors. And, you know, they serve them by making them feel good about their donations, not necessarily by demonstrating impact. And that's why I think some of the organizations we have on our list just tend to be, you know,

less successful at marketing, but we think some of the best in the world at the impact that they create. Now, the way it works for your company is you go to give well.org and then it looks like your preference is for folks to donate to your flagship fund and then presumably you allocate those donated dollars to the highest and best use charities that according to that year's calculations or analysis. Yeah. So our number one choice is that people give to us, and we reallocate, but I want to be very clear. Like, we're perfectly happy for someone to come to our website and go right to any of these organizations and donate.

You know, the website and all the information there is free of charge. And if anyone is wondering, you know, why should I send my money through this third party? Go ahead. You know, donate right to these organizations. That would be amazing. You know, the reason we like when people donate through us is it just allows us to aggregate up donations and then give to the organizations that have the biggest needs at any point in time. and we're in close contact with them.

We know what their needs are. We know where they plan to go next. And by having the funds aggregated, we can be a little bit more efficient in reallocation. You know, we don't take any cut of those donations, any fees on the donations. And so they all,

you know, 100% just goes through to the charities. Oh, but like I said, we're perfectly happy for people to also go directly. And that's why all that info is up there, you know, free at charge. Yeah.

Now, I know that this is a myth or incorrect, but I want to pose a question anyways. Plinking Devil's Advocate here. I'm a potential donor, and I've heard somewhere, I can't remember exactly placing where it is, that you shouldn't donate to organizations that have marketing budgets or that have high amounts of overhead. You want your donation to go directly to the person that you're serving with that. You've kind of touched on this earlier where, you know, there's, no, don't give them stipulations with that. Why is that a bad idea?

And what is healthy in the context of expenses that are not directly related to the, the mission of the charity, like salaries? Yeah. So, I mean, the bottom line is, you know, charities are like any other business where, you know, you need to spend on overhead and fundraising or marketing in order to survive as an entity. So what could that overhead spending me? I mean, it means paying people salaries that enable them, that enabled you to recruit talented people.

It means investing in technological infrastructure so you can work efficiently. And when donors try to starve organizations of that sort of funding, it leads to organizations that are, you know, maybe able to direct a little bit more money in the short term, but certainly less successful in the long term. And so I think that, you know, just tends to be a big mistake. Instead of focusing on overhead, there's something that's much better to focus on, which is, you know, how much impact do they have? You can just focus on the thing you care about directly. One of the examples I was loved is no one would ever say, you know, dissoning whether or not to invest in Apple stock based on how much it spends on overhead. Like, that doesn't even make any sense. That's not how we would think about it. You know, we're trying to think about how valuable the stock is relative to its, you know, its future and that or what it will be in the future. That's a much better way to assess that opportunity than to think about something like

how much did it spend on servers and is that too much? And so we really don't focus on it at all. And I think it's a mistake to, you know, even more practically, just the numbers, themselves can vary a lot based on the nature of the activity an organization does. So if you have one organization that's collecting a lot of in-kind donations, so let's say products that they're distributing out, they'll have a really low overhead number because they're largely a re-granter. And another organization that relies more heavily on, you know, people might have a higher number. And so I think it's hard to say as a rule of thumb, you know, what's good versus bad.

And instead, I think if you went to organizations and asked them, the sorts of questions that I laid out earlier, you'd avoid the ones that are scams and you'd end up focusing on ones that are really effective. Are there any red flags that I should be looking out for when I am doing my own research? I think first and I mean, I think you will avoid a lot of the worst outcomes by being proactive in the first place. If, you know, if you are, if you're starting and you're saying, I'm trying to find, let's say, the best organizations in my community. And, you know, I don't know. You go online or you talk to friends and family to get some recommendations. That's a much better place to start than the group that's calling you on the phone that you're

responding to reactively. And it just, that goes really far. And yeah, so I think, I mean, that's basically it. You know, I think you should ask questions. And if you get good answers, you should, you know, feel pretty good. You'll never know for sure. But that's a great place to start. We, you know, I also love the, what, what would you do with another 50, 100, some, some number that's large enough that is actually meaningful, $50,000 and in, in charitable gifts? And it's amazing how many organizations I ask that question to who have no idea what they would do with the, with the next 50 or $100,000. That's really important because, like, I intend, hopefully over the course of my life to give a significant amount of money. And if I,

and getting it to somebody who doesn't have a plan, that's a problem as well. So I loved all of your questions there, and I think that those are the key elements. They've got to have a convincing, you got to be open-minded about the call. You want to have a cause you want to support. Find organizations. Don't let them come to you that you want to support with them. Be open-minded because they can take it on a path that's not exactly where you wanted to go. That's much more effective because these people are doing it full-time, and many of them

are very, very good at it. Let them run with the donation. I think is how you articulated that. And get them to talk about what they've done and why they know it's working or why they know it isn't working. I love that. It's not live saves. It's death subverted. I love the way your mind works on some of these problems.

But I think that's right. And if you do that, and then what are you going to do as you scale the vision or as you scale towards that vision? What will next incremental dollar get us in terms of impact or good? That's giving like an investor, I think. Yeah, totally. And I think, so I think like one distinction I want to draw, which I think is, is somewhat challenging here is that on, I do think that, you know, there's a difference between what someone can do on their own, you know, in a relatively small amount of time, you know, versus what, you know, we're trying to do. I give well with our full-time staff. And, you know, I think these tips work really well to go from, you know, I don't know really where to start to get you somewhere. But I, it's just real hard to know. make progress on your own. And the place that I really saw that was in the way that, sort of what led my co-founder and me to found Givewell 15 years ago. You know, we were sort of in this position. We were working in the finance sector. We wanted to give to charity.

And we just thought we would, you know, we did, we followed it. We were proactive, open-minded. We asked organizations for their case for effectiveness. But after going through that for a few months, we largely found that we were getting, you know, marketing materials. more than substantive answers on how do the organizations know that their programs are working. And it was really that frustration that led us to found Givewell and just try to create this resource that we hoped, you know, other people in a similar position would be able to use. So instead of having to reinvent the wheel, they could rely on us to decide where to give. A moment ago, you said that Givewell takes no percentage of the proceeds from the donations.

100% of what's donated to give well goes to the charities. How do you fund your research? Yeah, so we have donors who are really interested in supporting our operations directly. And so they give to us that funds our salaries. And therefore, the funding that other donors are, the donations that other donors are making are going right to the charities themselves. And for those donors that are supporting us, I think their mindset is it's a good deal. to support, you know, this Give Well research project that is then creating this resource that enables

tens of thousands of donors every year to give, you know, give more effectively than they otherwise would have. Seems like a pretty effective donation for them. Yeah. Well, I hope so. We're doing our best. Okay. Now, cheeky follow-up question, Ellie.

What would Givewell do with an extra $50 or $100,000 donated directly to them? Yeah, so we get donations of two kinds. One is unrestricted. So that means donations. that we could spend on our operations. If we had a use for it, the other is money that we talked about before that goes to one of our funds and we can send directly to organizations we support. And so if we got extra money into our unrestricted fund, right now we would just be passing

it along to other organizations. And that's because where we currently are, at the amount of funding we've raised and the amount of savings that we have, we think the best use of that money is sending it on to another organization that is going to put it directly to use and how to the amount of savings. help people immediately. To give some context, we expect to raise about $600 million in 2022, but we've found $900 million worth of outstanding giving opportunities. And so one of our big focus is trying to close as much of that $300 million funding gap as we can. And so if we took in extra money, that would be, you know, could be used for

give will's operations or it could be sent along. We're sending it along because that just helps us move down the path towards closing more of that gap that we need to and, you know, helping more people we need. That's an incredible amount of money. Yeah, that's, that makes me feel really good about give well because I did a bike ride once where I went the next year, but the year before I went, the organization hired a company to like some charitable company to run it. And they took 90% of the donations to put the ride on. And it just seemed like such a waste. Like, why don't I just give you the 10% directly and then not do the ride?

But the ride was what was like what I wanted to do. So it just, it seemed like it was such a letdown to see that. And then the next year they didn't use the same company. But there's a lot of companies out there that don't do that, like that would take all of the money given to you unrestricted and just keep it. And I really like that you guys don't. Well, I think that we're, you know, we're definitely trying to, you know, be one of our aims is to be very transparent with the outside world. You know, the one thing we say is, you know, our business is your business. And so to that end, you know, we have this policy that I just mentioned where at a certain threshold, we are just not going to keep money for ourselves.

We're going to grant it out. You know, we don't want to build up a big give well endowment. that doesn't make sense. We want to keep doing great research over time and donors should keep supporting us. And if they don't believe that we are, then they should stop. You know, we shouldn't be able to keep going after that. Similarly, we put our board documents online. So, I mean, you can certainly see our tax forms and our audited financials,

but you can read the materials we share with our board and we put them up on our website for anyone to see because we think that so often in charity, there's not enough transparency. and with more transparency comes trust and can enable people to understand, you know, why we're doing what we're doing and, you know, believe that, you know, they have all the, you have all the information you need to decide, you know, whether or not you want to trust us. Who are, who's on staff at Givewell besides yourself? So it's, you know, people from eclectic backgrounds. We have people who are with advanced degrees in economics on the research team, you know,

people with fundraising background on the outreach team. I think one common thread between many of our staff and now Givewell has been around for 15 years is often our staff were donors before they ever came to apply to a job at Givewell. And so often the common thread is that they were very excited about the idea of research-driven, transparent, charitable giving. They started donating. and then eventually, you know, found their way to working for us. And, you know, that's been a great pipeline of folks coming to join the team over the years.

What else should we know about Givewell or the organization? You know, look, we have transparency. We've got a great thesis here. We're going to optimize for human life for social good here. And we're going to find that, find quantitative ways to back that up and be highly confident in that. We're going to do this to the tune to $600 million, maybe $900 million soon. We'll see how long it takes you to get there. and and what you just, you know, came in with was this swagger.

Hey, we people believe in us so much, they take care of all of that. So every incremental dollar that a person listening to this might give goes straight to the next most, the next best marginal opportunity to do good as best we can determine with that. What else should we know? Is there anything else that we should leave, know about give-well before we conclude here? Yeah. I mean, I think maybe the single most important thing to know about Givewell is, you know, something along the lines of you don't have to take my word for it.

You know, one of our core values is transparency. And to that end, you know, pretty much everything we talked about in this conversation, you could go to our website, you could read about, you could find the footnotes that support the claim, the academic paper that the footnotes come from, the documents or the notes from the conversation with the charity. And the reason that we want to do it that way is in the charitable world, it's just all too easy for someone to, you know, tell a nice story and get donors behind them and then have it all fall apart. And so we say, you know, forget the story. I mean, the story is nice and emotion is, you know, ultimately what sort of drives me to do the work I do is emotion.

But then at the end of the day, I also want to be able to see the spreadsheets, see the cold, hard facts and make a reasoned decision. And so what, you know, we want to do to the outside role to say to anyone who wants to, you know, look at, look at what we do. If you agree with it, great. And if you disagree with it, you know, then you're in a position to know because we've put that information. We've put that information out there. I love it. And one one thing that I'll call out that you haven't discussed here is this concept of the mistakes that Givewell has made, which I think is a great effort, a great, uh, putting, putting a pin in. the comment around transparency. Could you walk us through a couple of those big mistakes that you

are highlighting on here and why you've chosen to put that into your navigation bar on your platform? Yeah. I mean, it comes back to the same thing that often, you know, people sort of pretend that they've never gotten anything wrong. And I mean, that's just obviously crazy. We all make mistakes all the time. And we think it would be much better, especially in the nonprofit sector, if organizations were just public about the things they got wrong because that would enable not only the organization to learn, but also other organizations to learn from them. I mean, we've made all sorts of mistakes that are on that page. You know, we early on in Givewell's history, so this is talking like 15 years ago, we marketed ourselves too aggressively. And, you know, we wanted to put that out there so people would know.

We've made, and we've also just made like silly spreadsheet errors that have led us to, you know, send some funds to an organization, you know, to one organization over another. You know, in the scheme of things, it adds up to a small percentage of our overall giving, but we think it's really important to be transparent with the public and then also to ensure that internally we have a culture that learns from mistakes. So we have that public page internally at Give Well and our, we use Slack as the sort of internal I.M client we use and we have a mistakes channel there where people can just say they got things wrong and we think it's just a it's going to lead to a much better culture and, you know,

one that's focused on learning and getting better rather than one that's trying to, you know, avoid error if we are open about the fact that we need mistakes so we can all learn and improve. Let me ask you one more question here. Not to put you on the spot too hard, but a very notable former billionaire was really into this concept of effective altruism. And this sounds a lot like effective altruism, this concept. Could you describe what effective altruism is for? for those interested, how this relates and why we should still continue to do the work that is in Givewell's mission here. Yeah. So I'd say that, you know, effective altruism is, you know, a set of ideas that say let's use reason and evidence to try to do as much good with our time and our

money. And, you know, Givewell subscribes to that in the sense that, you know, we're trying to use our reason and our evidence to identify ways. of helping people in low-income countries as much as possible today. And I think that the principles that we followed and the process that we followed has led us to find some really great organizations that have helped a ton of people in our history. I think that effective altruism is a fantastic concept. And that in spite of the problems I've gone on with FTX and Sandbank Fried and all that kind of good stuff, a silver lining, hopefully, is that more people become aware of this.

concept because it is it is very powerful to think about how do I give effectively across the course of my life in a way that has the maximum impact for society and to do that with a quantitative based approach and so that's something that I think I was really excited to talk to you about and obviously most people that are practicing this are are are doing so with with good intent so yeah well anything else you want to share with us before we go Ellie no thanks so much for having me it's been great to have this conversation and I hope I hope it helps thank you Ellie and I appreciate your time today. Give us the website again one more time.

Yeah, we're at www.givewell.org. All right. Thank you so much for your time, and we will talk to you soon. Sounds great. You too. Thank you so much. All right, Scott, that was Ellie Hassanfeld from givewell.org, and that was a lot of fun. You know, the one thing we didn't talk about is talking about your, talking about your charitable giving with your employer, seeing if your employer has a,

match of any kind when you are getting ready to make a contribution, especially towards the end of the year. I know that Bigger Pockets has a donation matching program. And if you are considering giving on giving Tuesday, reach out to your HR department and ask them if they do any sort of match. And that is another way to make your dollars go farther. Yeah, absolutely. You know, after the show, we were asking, Ellie, how many lives do you think you've saved with give well? And I have a lot. And I have, I think he estimated it at $150,000 across all of the money that they've raised. And, you know, yeah, sure, some of that, some of the donations might have gone to saving lives anyways. But the marginal increase, a number of lives saved by funneling those funds to the most effective organization is probably 100,000 easily people saved.

And it's just really, really good work. So what an impressive guy. What an impressive organization. The scale is remarkable. And I hope he continues to do this work for a long time. and I hope more people follow suit. I want to give one more plug here. We talked about Givewell for a lot of this show,

but I want to talk for a moment about an organization that Bigger Pockets has partnered with, a little closer to home here. This organization is called Cross Purpose, and it's an organization that I have volunteered at personally for about seven years, or on and off over the past seven years and have donated to personally.

And Cross Purpose is a career development program. So it takes folks that are often living at around the poverty line. It's mission is to, abolish poverty. And it does that through a career development program that involves six months of career development, a skills-based program that teaches leaders how to put together their resume, do interviewing skills, and then a specific career track that can range from electrician to administrative assistant, to medical assistant, to CDL. That's a commercial driving license

for truck drivers and beyond. And graduates of the program go on to make $20 an hour on average and have successful careers, many of them. And I've gotten to know a handful of these graduates, and I've seen the impact of the program. So they rigorously track the social ROI that they're generating and estimate about a five to one impact on every dollar invested in terms of the taxes paid, the reduction in government benefits that the leaders that participate in the program will receive for those that going to graduate. So I really have been impressed the program, really have witnessed the scale of it over the last couple of years, and I'm really excited to see where it goes. So highly encourage everyone to check out cross-purpose as another option

for giving this holiday season. I want to reiterate those tips again from Ellie for doing your own research. Be proactive. Don't respond to solicitations. Go out and do your own research based on charities that you want to support, causes that you want to support. Be open-minded about what you want to support. Press the organization about their successes and how they will know their system isn't working. Ask them, what will you do with additional funding? And give money rather than goods and give with no strings attached.

All right, Scott, I had a lot of fun with this episode today. I love the concept of Giving Tuesday. And I think this is a fantastic, fantastic organization. Givewell.org is the name of the organization. That wraps up this bonus episode of the Bigger Pockets Money podcast. Thank you so much for listening. From the Bigger Pockets Money podcast, he is Scott Trench, and I am Mindy Jensen, quoting Yoda, saying live long and prosper.