Thursday, 19 April 2018
Revisiting leverage

Added: 13.02.2018 16:05 | 59 views | 0 comments

Many charities aim to influence how others (other donors, governments, or the private sector) allocate their funds. We call this influence on others "leverage." Expenditure on a program can also crowd out funding that would otherwise have come from other sources. We call this “funging” (from "fungibility").
In GiveWell's early years, we didn’t account for leverage in our cost-effectiveness analysis; we counted all costs of an intervention equally, no matter who paid for them.((For example, see row 3 of our for Against Malaria Foundation.)) For example, for the Schistosomiasis Control Initiative (SCI), a charity that treats intestinal parasites (deworming), we counted both drug and delivery costs, even when the drugs were donated. We did this because we felt it was the simplest approach, least prone to significant error or manipulation.
Over the last few years, our approach has evolved, and we made some adjustments for leverage and funging to our cost-effectiveness analyses where we felt they were clearly warranted.
In our , we made a major change to how we dealt with the question of leverage by incorporating explicit, formal leverage estimates for every charity we recommend.

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