FasterCures President Greg Simon responds to The New York Times piece by Stephanie Strom “2 Young Hedge-Fund Veterans Stir Up the World of Philanthropy,”
The article states, “Mr. Karnofsky and Mr. Hassenfeld, both 26, founders and sole employees of GiveWell, which studies charities in particular fields and ranks them on their effectiveness. GiveWell is supported by a charity they created, the Clear Fund, which makes grants to charities they recommend in their research.”
After reading this, the third article I’ve seen about these refugees from Wall Street, I feel moved to point out a few things. First, it’s unfortunate that what has drawn attention to their work is using blogs to flame the admittedly flawed ratings groups like Charity Navigator. Second is this obsession of equating philanthropy with “charity.” I do not know any medical research group that considers itself a charity. They are nonprofit disease research organizations developing cures for deadly and debilitating diseases. Charity has nothing to do with it – these organizations represent investments – and yes I feel silly pointing that out to people who used to do research for hedge funds.
Once you realize organizations that are trying to save lives through research are an investment, you evaluate these organizations differently. You look at their strategies, their resources, their connections, board members, partners, and risk taking, and then you can create a diversified portfolio of disease cure investments going forward. That is what FasterCures is doing with our Philanthropy Advisory Service with grants from Gates and Robert Wood Johnson – and it takes time and more than asking a hundred questions and seeing who sends you their annual report faster than others – that really only measures receptionists.
Unfortunately, GiveWell’s approach of “cost per life saved” is the equivalent of what investors call “chasing performance.” Some groups may be efficient in handing out condoms but to discuss “charities” saving lives and not mention groups like IAVI that are developing vaccines for AIDS is like focusing on iron lung distributors instead of a polio vaccine.
We are all trying to get more out of our philanthropy, but saving lives requires strategies that try to create the future – and measuring that is harder than counting dollars and cents – or condoms.
Read the "Philanthropy 2173" blog for more information at: http://philanthropy.blogspot.com/2007/04/products-id-like-to-see.html