For the past two years, ACE has recognized Animal Equality as a Top Charity. Needless to say, we have felt very confident in the high quality of their work, their strategic mindset, and their ability to accomplish substantial victories around the world. This year, after deep consideration, we made the decision to move Animal Equality to our list of Standout Charities—with the qualification that we think those who have donated to Animal Equality in the past should continue to support them with a percentage of their previous donations. This blog post will outline our reasons for making the aforementioned change.
We know that ACE’s recommendation has brought in a significant amount of money in donations to Animal Equality—over $1 million in 2016 alone. Animal Equality will continue to need financial support in order to maintain the important gains they have accomplished over the last few years, and we think it would be unfortunate if those gains were lost due to a total migration of ACE donors to our new Top Charities. Thus, while we have chosen not to recommend them as a Top Charity at this time, we still recommend that donors who have supported them in the past continue to support them in some way.
The main factor in this decision is that Animal Equality has recently experienced significant growth, and we feel that the efficiency of their operations has slightly slowed as they are dealing with rapid expansion. If they are able to improve their operational efficiency in the future, we will consider moving them back into the Top Charity category. Secondly, Animal Equality focused more on grassroots outreach in 2016 than 2015 (from 18% of program spending to 42%). While we are happy that Animal Equality does some work in this area, we tend to be more excited about some other interventions, such as corporate outreach and undercover investigations.
Animal Equality’s Recent History
Animal Equality has experienced substantial growth over the past four years. In fact, their rapid increase in income is among the highest percentage gain we’ve seen. In 2012, Animal Equality had an income of just over $60,000; in 2016, they have taken in over $2 million.
This is an impressive accomplishment; strong growth is a good sign of a healthy organization. Just two years ago, Animal Equality had volunteers coordinating efforts in several countries, something that is simply not sustainable if trying to take full advantage of the opportunities in those countries. With this growth, they’ve been able to make many key hires and increase the stability of the organization.
We believe that Animal Equality’s growth over the past two years has been possible in significant part due to the support they’ve received as a result of ACE’s designation of them as a Top Charity. Anecdotally, we’ve encountered many people who told us they first learned about Animal Equality by reading about our recommended charities. This year, slightly under half of Animal Equality’s revenue has come from donations which we’ve tracked as resulting from our recommendation.
Our Current Reservations
While we remain happy about this growth, as well as optimistic about Animal Equality’s work as a whole, we have seen some signs that these substantial increases in income have resulted in growing pains. This is not unexpected given the rapid rate of expansion, but it has led to some concerns about Animal Equality’s ability to maintain the high rate of efficiency they had when we recommended them as a Top Charity in the past.
For example, we have had somewhat regular exchanges with donors who have expressed frustration with the difficulty of making contact with Animal Equality. We believe that some of these reports may have been exaggerated, but we believe that the number of these reports indicates that some real problems exist.
This has been reinforced by our own communications with Animal Equality, in which we have also experienced delays on a regular basis over the past year, often necessitating repeated contact attempts. This is in some ways understandable—their own work should take priority over communications with a third-party evaluator—but they have not indicated to us that they were deprioritizing communication with us, and instead it seemed they were trying to communicate promptly and just struggling to do so.
These two examples indicate that Animal Equality has grown so much in such a short period of time that they have struggled in some ways to maintain efficiency. To their credit, Animal Equality independently informed us that project management and internal communication were areas they struggled with this year and have been actively trying to improve. Regardless, in making the decision about which charities to select for our top recommendation, we must be critical of all aspects of a charity’s work to ensure that we pick the very top groups that are functioning strongly in all of these aspects.
Our Current Evaluation of Animal Equality
Due to the issues mentioned above, we have decided to move Animal Equality to our list of Standout Organizations.
On the whole, we remain very optimistic about Animal Equality. We still find their leadership to be among the most effectiveness-focused in the movement, and we still believe that they are doing impactful work. We are impressed with their decision to conduct research to evaluate new interventions, such as their ongoing study of using virtual reality as a form of veg outreach. In fact, the decision to use virtual reality at all was impressive and indicated an innovative approach. They still show a strong responsiveness to evidence, as demonstrated by their decision to begin work in corporate campaigns due to the ability to affect large numbers of animals—a decision which was made based on the success of corporate cage-free campaigns in 2015 and 2016.
Recommendations For Donors
We recommend that donors who supported Animal Equality last year because of our recommendation continue to support Animal Equality’s work with a percentage of the amount that was given to them previously.
Stable funding is very important to charities. This is especially true after a period of expansion, as a charity will have created new programs or positions that need continued support. Insufficient funding could result in stagnation or even the loss of those programs or positions, as programs and staff members are typically not as effective initially as they will be once established, and the loss of jobs or entire departments can be highly detrimental to employee and organizational motivation.
We want to see Animal Equality continue to solidify their expanded operations, and that means we want to see our donors continue to give somewhere between 25–75% of their previous gifts to Animal Equality this year, if those donors would otherwise have decided to shift all of their donations to ACE’s new Top Charities. We hope that this will give Animal Equality time to find new sources of funding.
Some foundations offer “exit grants” to organizations that they choose not to support after a previous period of awarding grants. These exit grants are meant to help stabilize operations of an organization as they deal with an unforeseen decrease in income due to not receiving a full grant. While ACE doesn’t make grants, we have similar goals to foundations that would provide an exit grant to an organization that they chose to no longer support. By removing a top recommendation, we are undoubtedly reducing the amount of funding we direct to Animal Equality. Thus we encourage donors to consider continuing to support their work in some capacity, which would fulfill a similar function to an exit grant.
ACE’s Relationship With Animal Equality in 2017
Recent signs indicate that Animal Equality is fixing the issues we’ve seen arise over the past year. We feel encouraged by this, and we hope to see that improvement continue. Because we remain very positive about their organization, we will offer Animal Equality another comprehensive review in 2017 so that they can again be considered for Top Charity status.
We will continue to accept donations for Animal Equality through our website for the next three months from those who previously had set up recurring donations, to ensure that donors have had ample time to consider all the facts, read our reviews, and ask us questions about their specific situation. Over the course of those three months, we will be contacting these donors and recommending that they either continue donating to Animal Equality directly—given that they will need support maintaining their new programs—or else donate to ACE’s new Top Charities.
Denis Drescher says
I agree that in general a shift toward more grassroots outreach at the expense of undercover investigations seems less than optimal. I haven’t had a closer look at the budget, but is it possible that this is related to the roll-out of iAnimal? If so, that part of the budget should not be judged by the standards of past grassroots outreach but is probably rather carried by its value of information – if VR turns out to be a valuable tool, it will be adopted by others, and AE will have been a major generator of this impact; but even if it turns out to be ineffective, the experiment will save other organizations who would’ve investigated the technology a lot of resources. In the best case on this hypothetical branch, these organization will use the same resources to discover new, highly effective interventions. (And at the same time, AE is ramping up another highly promising intervention.)
On the second count, again, I probably don’t have all the information that have gone into the decision, and it’s probably always a balancing act between not falling prey to status quo bias or missing signs of permanent insufficiencies in the management of an organization and not being fidgety either.
But as you point out in the article, “stable funding is very important to charities.” It allows them to take the many intimidating risks that come with increases in scale. The effect that I’m afraid this demotion may have is that ACE recommendations will become less valuable to organizations because the donations they motivate may come to look too unreliable for many of the most neglected (because risky) and hence most valuable investments.
I was similarly unconvinced of GiveWell’s demotion of AMF in 2013, which has probably delayed AMF’s expansion a little until it was reversed. Conversely, GiveWell’s 2014 (I think) review of SCI painted a picture of a confused and overworked staff with a byzantine accounting system, and yet SCI has remained top charity throughout. GiveWell’s confidence was carried by the cost-effectiveness of the intervention (despite weak evidence). I think the qualities that you list of AE – first and foremost its amazing increase in scale (“strong growth is a good sign of a healthy organization”) – should warrant similar confidence.
As Ben Todd has explained at greater length, it’s completely normal for startups to be in the red for years while they scale up operations. For nonprofits this may mean that they generate hardly any impact (have a negative impact due to opportunity costs) for years until they reach the scale at which it makes sense to shift priorities and earn back this investment – hopefully many times over. Therefore, I don’t think donor should be interested in how much impact their donation is likely to generate throughout the next year but should maximize the impact they’ll generate throughout all of the future.
AE, by intent or accident, seems to go the route where it’s not the immediate impact that is curtailed while the organization scales up but rather some operations functions. (Perhaps this is even the result of pressure from donors who are too focused on short-term impact.) But you seem to be optimistic that AE can fix these issues throughout 2017. I would see such a demotion as warranted if I thought that the issues are indicative of deeper problems and I have very little hope that they will get resolved.
On the positive side, this may give AE and you more information about how many of the donors you referred follow your recommendations exactly and how many rather build their decisions upon your research but in the end make more permanent commitments than the first group.
Are you considering updating the recommendations after half a year like GiveWell did before?
Jon Bockman says
Great points, Denis, thanks for your contribution.
The shift in spending was one of several considerations in this decision. We do think this was partially due to the expansion of iAnimal. While we are very interested in AE’s efforts to test the impact of using this new technology, we’re not sure that it will be more cost-effective than existing technologies for grassroots outreach. We’re also unsure whether AE’s tests will be successful, in the sense of producing a clear recommendation for or against using the VR technology that is adopted by other groups. While we agree that the findings from that experiment will be valuable for all groups, most previous studies of animal advocacy methods have been inconclusive, and we’re not sure how many charities will change their behavior even if this study produces a very strong finding. Overall, even though we think testing VR technology is a good choice among grassroots outreach strategies, we still think AE’s investigations work likely has more robust impacts than their grassroots work.
We don’t think this decision will cause ACE recommendations to become any less valuable; in fact, this decision should indicate that we are critically assessing all our recommended charities and making tough decision about which ones are really doing the very best work. We appreciate charities taking risks in some ways – MFA expanding to new countries, THL investing heavily in corporate outreach – but feel it’s also important to maintain a high quality of operations throughout those transitions. We encourage charities to explore new opportunities, assess their impact, and decide whether or not to invest further. However there is a time and place for that, and there is such a thing as branching out too wide, or undertaking too many new projects, which could cause a decline in the quality of other operations.
At the end of the day, we’re trying to make clear funding recommendations to our donors, and because of that, we want to keep the group of top charities to a size where we don’t have a preference between the organizations on that list. Animal Equality was very close to that cutoff, but we felt strongly enough about our top three that we choose that we decided to move AE to a Standout designation. This doesn’t mean that we feel they have deeper problems; quite the contrary, as we think they have problems that they could certainly fix over the course of the next year. But in our effort to maintain clear top recommendations to donors, we opted to pick the three charities we felt most strongly about as our Top Charities.
We are indeed very interested in seeing how this change may affect AE’s fundraising in 2017. While we influenced a large number of donations this past year based on our recommendation of AE as a Top Charity, we also introduced them to a very large number of donors, and they have had the opportunity to steward those donors on their own. We’ve tried to be clear in our messaging that we still think our donors should choose to support AE with at least a percentage of their previous donation, but that doesn’t necessarily translate into that actually happening.
We have not discussed updating recommendations mid-year, but we do plan to pay closer attention to the amount of funds that our recommended charities receive throughout the year, so that we can make adjustments or add specific instructions for our donors, should a situation call for a change.
Denis Drescher says
“We’re also unsure whether AE’s tests will be successful, in the sense of producing a clear recommendation for or against using the VR technology”: Yeah, good point. I don’t even know how formally they are studying the effects yet.
“We don’t think this decision will cause ACE recommendations to become any less valuable”: I think you’re talking about donors here. The value of ACE recommendations for donors won’t decrease because it’s carried by the other excellent top charities (unless the donors “threaten” to fill all funding gaps :-)). What I was referring to was the value for organizations, the incentive they have to go through the review process.
“However there is a time and place for that, and there is such a thing as branching out too wide, or undertaking too many new projects, which could cause a decline in the quality of other operations”: The leadership making the decisions here is probably competent enough that we can only afterwards determine what has been “too wide” or “too many,” so I’m being a little facetious and hyperbolical here of course, but this does sounds a bit like “We’re happy for charities to take risks, but only so long as nothing goes wrong.”
Then again I realize now that the comparison to GiveWell’s patience with SCI was unfair in the way that GiveWell has been reviewing SCI since 2009, so they’ve had much more time to build up confidence into the organization and its team than you’ve had with AE. But that shouldn’t weaken the argument that much since you are actually confident in the AE.
“We want to keep the group of top charities to a size where we don’t have a preference between the organizations on that list”: Hmm, interesting. I didn’t know that. It seems like more of a “stateless” approach (I hope this is understandable with a CS background) in that it doesn’t seem to take previous recommendations into account. (Maybe it does in some indirect fashion.) It may be an advantage that this year’s decisions are not dependent on last year’s decisions, but I see a greater disadvantage in the opposite direction because it limits the responsibility of this year’s decisions for next year’s decisions.
Rather, my feelings for what should constitute a top charity where more centered around the question, to quote GiveWell, “Did [this evaluator] err in its previous recommendation of [the charity]?” Or more clearly, taking the distinction between right and rational into account, “Irrespective of whether our previous recommendation of the charity was rational, do we continue to think it was right?” If the answer is “No, we now think it was wrong,” then the charity should be removed. If the answer is “Yes, we continue to think it was right,” then the charity should either remain top charity or be removed temporarily for temporary reasons such as filled up room for funding.
The goal is to say “No, we now think it was wrong,” a certain fraction of the time, say, in exactly 50% of the cases. Since these decisions are made yearly – a very short timeframe – this framing introduces for every decision the valuable commitment that it be based on the evaluator’s confidence into the maximally long-term impact of the charity. The 50% figure is a fairly arbitrary example, but I thought it would be as valuable to aim for high accuracy for obvious reasons as it is valuable to aim for low accuracy to counter risk aversion and quantifiability bias and to have a counterbalancing incentive to demote charities with (comparatively) low long-run potential.
Admittedly, there is a final “No, we now think it was wrong,” but no final “Yes, we think it was right,” so the percentage is probably hard to monitor and one would have to trust one’s calibration from other domains, but maybe a mathematician can come up with some approximation here. (The hacker in me is also wary of a kind of Ponzi scheme where Attribution Moloch dynamics would lead an evaluator to disguise a drop below 50% accuracy by adding more, hasty recommendations and thus continually borrowing from its future self and exacerbating the situation. But it’s easy to trust that ACE won’t be tempted to do that. ^^)
[Epistemic status: I had not previously made my idea of what a top charity is as concrete as this – because I had not noticed that there were alternatives – so my thoughts are likely inchoative. I may also be biased because some of the value of my in-person fundraising is in using AE as an example to point donors to ACE. And I just had some ridiculously yummy finger food at AE’s 10-year anniversary party. ;-)]