I recently hosted a conversation between Imelda and Jack on the implications of the third wave of philanthropy on global health financing in Africa. Imelda is the founder of Philanthropy Reform Alliance, a nonprofit that examines philanthropy through the lens of power and stewardship. @Jack Lewars, as we all know, is the founder of Ultra Philanthropy.
How did this conversation come about? Quite spontaneously, really. Since Nan’s Substack, I have read loads of spin-offs both from an EA angle and a grassroots philanthropy angle, and it seemed to me that we were talking in silos. I began to wonder: is there an opportunity for both sides to talk about the coming wave? This event grew out of that desire. In this short piece, I did my best to summarize their conversations around four themes.
Imelda is wary of the incoming wave repeating the same mistakes as USAID: creating vertical systems, funding individual projects to the detriment of systemic interventions, working through Global North intermediaries, etc. She had this to say: “Aid is not neutral. Money, for example, enters a system that already has its strengths, weaknesses, incentives, and political realities; it could either make or break that system. We should look at the opportunity for impact beyond the individual level but also at a systems level. Look beyond how much money is coming but how it affects the systems because money is not neutral; it comes with a lot of power, it influences a lot of policies.”
On the other hand, Jack is hopeful about the incoming wave: although it is not enough to replace recent cuts to foreign aid, the commitment of the incoming philanthropists to GHWD means that urgent frontline projects can be quickly funded. He is doubtful that this flow will skew local dynamics. He reasons that one, the incoming wave is nowhere near as large as FDA. Two, the philanthropists are time-poor folks who are unlikely to be interested in imposing their views on what they fund. A more urgent matter is getting the money flowing from DAFs into projects on the ground.
He had this to say: “There are lots of potential bottlenecks between the donor liquidating the shares or even holding the shares at the moment and it getting to effective projects on the ground. So that includes the donor doesn't have time, the company doesn't go public, the valuation drops, the money ends up in the donor-advised fund sitting there for a long time, or it's given to intermediaries who don't disburse it quickly. And that's what I'm particularly focused on: how to move this money out of balance sheets and into frontline projects because I do think there's a real danger that, owing to a lack of time or mission creep or choice paralysis or something else, a lot of this money just sits there, and as everybody on this call knows, the need is urgent and it is now.”
When pressed further by Imelda, who asked about the regrantors’ primary sense of responsibility, and whether that is to the recipient community or the money, Jack conceded that most intermediaries are likely to believe they have a responsibility to the money. In his words: “You know you asked at the beginning, are we representing the community or the money? You know bluntly, I think a lot of the intermediaries see their responsibility to the money.”
Imelda thinks the third wave presents an opportunity for partnering with African intermediaries and regrantors who have contextual knowledge and can provide insight that a generalist with an Excel spreadsheet will miss.
In her words: “There is potential for this wave to bring in African organizations that already have the relationships and contextual knowledge and proximity that many international funders may not have. Think about the amount of time that is spent, for example, in researching topics or things that are contextually sitting in plain sight. And that's why I think we need to be careful not to confuse what is easy for a funder to assess with what is actually valuable because value is subjective.”
Jack agreed: yes, these philanthropists are EA-aligned and time-poor, and are likely to use EA regrantors like Coefficient Giving and GiveWell to do the work for them. He also added that a program is unlikely to succeed if officers do not listen to the beneficiaries. In his words: “I think this is a real problem in this instance because the ultimate decision makers (regrantors) are a long way away and will almost certainly not have any experience of this.”
He went further to add that it is not just a visibility problem. The logistics of sending grants directly to African charities are tedious and expensive. He said: “ I had a grant earlier this year that was held up for around 17 weeks and 5% of the value of the grant was charged as a fee to do due diligence. To me that was just extraordinary. I don't obviously encourage charities to have absurd overheads, but if it is possible to either negotiate something with a US- or UK-based charity where they can send money in a frictionless way or to register a fundraising arm in one of those countries without it being an insane overhead, that would be worth considering.”
He also encouraged charities to present these charities in a language these philanthropists can understand, i.e., cost-effectiveness, evidence of effectiveness, and scale. He had this to say: “There's an ideal world where the power dynamics are not what they are and where amazing African-based social entrepreneurs and organizations are highly legible to donors, and they speak the same language, and the donors are looking for the same value set as the organizations and everything comes together. However, you're probably not going to convert a load of these donors to have a wholly different worldview in the next six to 12 months. The language that they are going to speak is things like evidence of effectiveness, evidence of your implementation, cost-effectiveness, and scale.”
Imelda and Jack differed sharply on scale. Imelda said: “I am not a big believer in scale. I think that a project that is locally led shouldn't be subjected to the fact that it must scale. Some things scale like vitamin A and medical products; those scale because biology is the same in every country, in every community. But when you come down to social interventions, behavior change interventions, I don't think that scale should be a thing. I am not a big advocate for social interventions that claim that they can be scaled across Africa because I think that contexts are different and community priorities are different.”
Jack argued that scale is a priority for these philanthropists because of their startup inclinations. “They are very interested in scale. I don't think it's realistic for a donor in San Francisco to assess a hundred $20,000 grants, but I think they could give the same amount of money to funds or collectives or alliances that specialize in finding and vetting a high volume of opportunities. That might be where the scale comes in because they might want to write a check for two, five, or ten million.”
Interestingly, both Imelda and Jack questioned the usefulness of cost-effectiveness models during the monitoring and evaluation stage. Do analysts go back to check if their model was correct?
Imelda had this question for Jack: “I was just curious: when you monitor these grants at the end of the cycle, do the results align with what you modeled, and if they don't, how are EA people learning from those experiences?
Jack answered: “ I wrote about this recently on my Substack; there is almost no attempt to work out whether reality resembles the model in EA that I'm aware of. So even GiveWell, which is the best resource allocator along with Coefficient Giving, has done so few retrospective evaluations to find out whether its models were correct. I think this is something we should do much more of because even if you are a completely redpilled effective altruist, surely you want to calibrate your judgment over time by checking whether your models work closer or further away from the truth. Any reasonable person would say ‘all models are wrong and some models are useful.’ True. So we shouldn't rely on these speculative models as sources of truth. My wife is a monitoring and evaluation expert in development, and she always says, “You just have no idea how messy the frontline context is around this kind of data collection.”
Jack capped it with a defense of the data-driven approach: “To defend the data-driven approach, I think that there have been long periods where we have distributed money based on things that are worse than models, like the intuition of people in high-income countries who have no lived experience of the problem at all. Some of those things have done enormous harm, and many of them have done no good at all. I am pretty confident that taking a data-based approach to tackling malaria, childhood vaccination, and basic vitamin distribution has done a lot of good in the world and has probably outperformed the intuitions of particularly people who are not based in those communities.”
Special thanks to Jack and Imelda for reviewing the first draft. You can watch the event, including the audience Q and A session, here.
