Boycotts or positive reinforcement?

As promised, this is the follow-up to my last post to lay out my issues with one of the major alternative charity evaluating sites, GiveWell.

First, I want to say that I greatly admire what GiveWell has done. In my last post, I said that the book on modern philanthropic reform will start on December 1st, 2009, but if I write it, it will probably start with GiveWell's founding. What they decided to do was truly revolutionary and their amazing blog opened up a world to me that I didn't know existed.

GiveWell aims to direct donors to the most effective charities to get the most out of their money. Their in-depth research is ongoing, but so far they've been able to identify a short list of top rated charities. I do not take issue with their selected charities or the methodology they use, I just wonder if directing people towards organizations already complying to the criteria of accountability and transparency is the best way to encourage other organizations to hold themselves to the same standards.

In a recent post, Holden Karnofsky, of GiveWell's co-founders, asked this question: If we have no information on a charity, and no way to determine its effectiveness, should we assume the best or the worst about its effects? I think the answer is neither: we encourage the organization to prove its effectiveness and let us, as the social investors, decide. I think this is were GiveWell falls short. Instead of encouraging and rewarding charities who are taking steps towards the end goal (transparency and accountability) they reward those already achieving that goal and leave the others behind.

Now, GiveWell's critical voice alone could be enough to whip other charities in to shape, but I am doubtful. It comes down to a question of if you think it is better to create change from the inside of a system (like say through shareholder activism) or from the outside (like say with a boycott.) I think it is better to work from within to encourage (assuming the system has avenues for change) rather than resist it as a whole. GiveWell's dismissal of any organization without programmatic evaluation will cause confusion, possibly resentment or even the reactive dismissal of GiveWell's concept of accountability and effectiveness.

GiveWell is a charity evaluator, not a reform organization. It is trying to get a message out to consumers, not change an industry. But I would hope that they realize that all the effective change organizations in the world are not limited to their 10 top-rated charities and that they would want to see other organizations share their fundamental ideas about philanthropy. I hope they can start to share their expert knowledge with other charities and help them become as effective as they should be.