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Comment by mynameishere | Hacker News Reader

That's a fun gift. I used to get solicitations from Heifer international years ago, and the sad thing is that they advertise themselves such that if you donate 50 dollars, a family will get a flock of chickens; if you donate 100 dollars, a family will get a baby goat. Etc, etc. But all the money goes into a common fund.

I know charities have to use modern marketing, but that left a sour taste when I found out about it. On the other hand, I suppose Bill's underlings conduct proper due diligence.

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I know charities have to use modern marketing, but that left a sour taste when I found out about it.

Amusingly, this exact issue, of Heifer International putting money into a common fund vs. buying a water buffalo as expected, led Philip Greenspun to make a blog post on Dec. 26, 2006 (which I just stumbled on yesterday) wherein he wrote, "We are trying to decide if this is the crummiest possible Christmas present."

Then he went on to he ask what it would mean to actually buy water buffaloes for poor families. It turns out, a guy named Robert Thompson, an American living with his Chinese wife in China, left an informed answer in the comments and, long story short, Greenspun and his business partner put up the money and Thompson, with the help of his wife and her family, bought a deserving family a real live water buffalo.

You can read about it (be sure to read comment #1, which is from Thompson) and/or watch the short film Thompson made of the buying and presenting of the animal to a Chinese family, which shows the impact such a gift can have:

http://blogs.law.harvard.edu/philg/2006/12/26/water-buffalo-...

Or just watch the movie: http://www.t2.com/waterbuffalo/watch/water_buffalo_flash_hi....

Looks like they've had a drastic drop in rating from Charity Navigator, from 4/4 stars to 2. Apparently due to them spending 22% of their income on fund raising [1]. This is the first I've heard of them and I may still give just because I like the idea.

[1] http://www.charitynavigator.org/index.cfm?bay=search.summary...

The overhead ratio is a pretty poor indicator of a charity's effectiveness. http://overheadmyth.com/

I would think overhead would be the 7.3% cited on Charity Navigator and the 22% fund raising would be separate. Maybe that 22% will really pay off in the future. If Bill likes them though they can't be doing too bad.

The proportion spent on fundraising isn't a good indicator of effectiveness either. Generally, the metrics tracked by Charity Navigator are easy to measure, and aren't very useful.

GiveWell is a much better evaluator of charity quality. Since they spend much more time on analyzing each charity, they cover way fewer charities. They are quite strategic about prioritizing which ones to interview. http://www.givewell.org/international/process

Interesting, GiveWell goes as far as to not recommend Heifer, though for different reasons.

It would be ridiculously inefficient to literally use your money to buy the chickens or whatever. So yes, it's abstracted a bit, but so is every charity.

Why would that be inefficient?

They just need to count the number of donors who have selected 'baby goat', count the number of baby goats you've distributed, and make sure they're equal. Charge enough per goat to cover some reasonable management overheads. If donors are supplying more goats than you need, stop accepting the donations and ask them to choose chickens instead.

Organisations do things like this all the time. Orders are placed, orders are paid for, orders are fulfilled. Internet retailers manage this millions of times a day with very low overheads. What's the problem?

If a charity wants donations to a general fund rather than a specific use, they should be honest about that in their marketing materials.

I think the idea is to show that worthwhile things can be done with what seems like a small amount of money, otherwise potential donors may feel that their $10 can't make a measurable difference to a real person's outcome and will be less inclined to donate.

Ringfencing money like that would be very inefficient unless you can perfectly balance supply/demand beforehand. What happens if a ton of donors donate goats but then you find that nobody needs the goats anymore but you could really use the money for something boring like employment liability insurance?

What if lots and lots of people donate to the goat fund, but what people really need is chickens?

I think there's a middle ground where you are giving the gift of x dollars in real food / livestock to a family in xyz. Then the actual logistics of what that means are figured out and told to you.

Your complaint is why Watsi (and Kiva before it) exist.

Kiva's no different.

oh? Well consider me effectively misled.

Kiva is sort-of iffy in some areas, for example pre-dispersal means that most loans are funded long before they're live on the website[1]: when you're loaning $25 to an individual, you're actually just sending money out to the field partner, who have already granted a loan to the individual. Another concern some people have is that because of the way field partners work they can be aggressive with gathering loan repayments as every delinquent loan reflects poorly on the field partner.

Personally I find the amount of good that Kiva does far exceeds the negatives that some people put forward, and while they're far from perfect they are a very well managed charity[2] that I have a lot of confidence in.

[1] They do include this information on each borrowers page though, it's transparent if you know to look for it, but a lot of people don't understand it.

    Loan disbursal can happen anywhere from 60 days before to 90 days 
    after the loan is posted on the Kiva website. The disbursed date indicates 
    the date that the borrower receives their loan funds from the Field Partner.

    Many of Kiva's Field Partners choose to disburse loan funds before 
    the loan request is posted on Kiva. We allow pre-disbursal because 
    it ensures that the funds reach the borrower as soon as they are needed. 
    Loan funds from Kiva lenders then go to backfill that amount and as a 
    lender you assume the risk of the loan. By doing this, our Field Partners
    assume the risk that, if the loan isn't funded by Kiva lenders, the Field 
    Partner has to fund the loan without any funds from Kiva lenders."

[2] http://www.charitynavigator.org/index.cfm?bay=search.summary...

Kiva Zip is the new program they've launched recently that lets you make loans directly to borrowers.

https://zip.kiva.org/

It really is quite convincing.

I used Kiva during one of their "Free $25 Loan" promos. Unfortunately, several months before "my" borrower was able to finish repaying her loan, I received an E-mail saying that she had passed away. The thing is, Kiva still shows the final few months' repayment as having been received.

This made me question the numbers that I was seeing; while it's definitely possible that her family paid everything off, I'm not sure that I trust them.

I don't believe that anything malicious is going here, just misrepresentation.

For this reason I'd much rather support the microfinance institutions themselves (even though Kiva doesn't take a cut).

You learned how the sausage is made.

I'm sure they are doing good, but I was a lot less enthusiastic about Heifer International after hearing their responses on a This American Life show about the best way to help people through charity:

http://www.npr.org/blogs/money/2013/08/23/214875696/cash-cow...

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