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Peter Hurford

Don’t Call Us a Charitable-Industrial Complex

A key question we at Giving What We Can ask ourselves is "how can we make the world a better place?" Currently, we think the best opportunity to do good is to donate 

Peter Buffett, a son of noted billionaire philanthropist Warren Buffett, weighed in on his ideas in his new New York Times op-ed, 

. Peter Buffett writes about what he calls "philanthropic colonialism", where people would spend a lot of their money making donations essentially to feel better about themselves, without much regard to whether or not their donations were making a difference or avoiding unintended consequences.

This message is a good one. It's echoed here by Giving What We Can, and other organizations like 

, and is a core message of what we call the effective altruism movement.

However, this is not the message that Peter Buffett ends up running with.

It turns out Peter Buffett himself doesn't like thinking in terms of "return on investment" - he says:

With more business-minded folks getting into the act, business principles are trumpeted as an important element to add to the philanthropic sector. I now hear people ask, 'what's the R.O.I.?' when it comes to alleviating human suffering, as if return on investment were the only measure of success.

Here, he mischaracterizes philanthropists, at least the ones that I know. "Return on investment" or, rather, looking at how much impact one has per dollar of their donation, is not a fancy business term about cash flows. Instead, it's looking at actual outcomes precisely in amount of suffering alleviated, and figuring out how to alleviate the most suffering given our resources. The use of this kind of language was a response to Buffett's concern that charities weren't measuring their impact.

But that isn't even what Peter Buffett really is concerned about. His main worry is that the very act of donating itself is keeping people entrenched in a system of inequality that is perpetuated by those who can afford to donate. He says:

Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left. […] But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over.

It's hard to imagine this is the entire picture. Certainly there is harm done by economic inequality and some of it probably is perpetuated by large corporations. But there's also disease, famine, and natural disasters - none of which even the most sinister corporation could be causing.

And the donations the rich - or even the significantly less wealthy - give to our recommended charities are working. Things are actually getting better, not worse.

Peter Buffett appears to be suggesting that it is bad to make things better, because that reduces the chance of a dramatic change in society. However, as Jeff Kaufman 

, even if a better system is coming, does our charity really delay it? If people 

 are they any less empowered or motivated to change their situation for the better? If they are, is this effect very large? Is this effect large enough that your donation does more through 

 to delay the implementation of a better system than it does by direct effects to make people's lives better?

Peter Buffett also quotes some statistics about rising inequality, 

, but beside the point. The statistics he doesn't quote include the massive decline in extreme poverty, the decline in malaria rates, the eradication of polio, the decline in malnutrition, etc. Buffett calls this "kicking the can down the road", but we call it success.

Peter Buffett wants "a new operating system" for the world, something that is "[n]ot a 2.0 or a 3.0, but something built from the ground up". He says that the reason we can't do this is because we're short on imagination. However, what we're really missing is the specifics. We're short on actual alternatives for how the world could be and plans for coordinating everyone and getting them to agree to a new economic system.

Even if you think capitalism is the biggest thing keeping the extremely poor people down, Peter Buffett's plan to change the world is still missing something. His hand-waving is fine for those who are thinking big and imagining a better world. And thinking big is important. But for those of us trying to put his call for better aid into practice, we need specifics.

Political and economic change are potentially valuable. But we do need to know where to move our donations to make this happen. We need good arguments and evidence for why the specific changes proposed will be effective.

Peter Buffett's proposal is very short on that.

Toby Ord

Measuring What Matters: Two key indicators for the Successor Development Goals

The Millenium Development Goals are an attempt to set overall priorities and targets for fighting poverty. However, they only cover the years up until 2015, so the international community is working to replace them with a set of 'Successor Development Goals' to cover the years from 2015 to 2030. This replacement process was kicked off with the report of the High Level Panel which came out in June with 12 suggested new goals comprised of a total of 54 indicators.

I want to describe two new indicators which I think will help improve the quality of the response to the goals on Health and Poverty. In contrast to the very specific indicators in the report, my proposals are overall measures of health and prosperity which are unlikely to be gamed or to cause distortions because they so closely track what we actually value. The usual drawback of indicators that closely track what really matters is that they are too difficult to measure. As I shall show, this doesn't apply in these cases: we can target what really matters and find out how well we are doing.

The High Level Panel suggested 'Ensure Healthy Lives' as its 4th goal, and it seems very likely that something of this kind will appear in the final list of goals. The Panel suggested five indicators, all of which are quite focused. These include vaccine coverage rates, under-5 death rates, and maternal mortality. These indicators track things that are important, but there are many parts of health that they don't cover. I think it is important to consider adding an indicator that directly measures good health so as to leave less room between what we are targeting and what we care about.

A natural and important measure is Life Expectancy, but it has a significant flaw: while it tracks mortality, it doesn't take morbidity into account. The solution is to instead use a measure called Healthy Life Expectancy (or HLE), which is currently used to track population health in the EU. This is the life expectancy in a population with each year alive weighted by the quality of health experienced. It is thus a measure of both the quantity and quality of health in an average person's life. It is based on the standard population health units of Quality Adjusted Life Years and Disability Adjusted Life Years (QALYs and DALYs), and corresponds to the average number of QALYs in someone's life. Measuring Healthy Life Expectancy requires a considerable amount of data, but luckily this is already collected and collated for the regular Global Burden of Disease report and this could easily be adapted to measure this indicator at a national level. This would have the added advantage of using the DALY framework for measuring the levels of morbidity, which is the standard in global health.

Adding a Healthy Life Expectancy target will:

make it easier to know how we are succeeding overall at improving health

naturally incorporate new health promotion opportunities as they arise

allow for differences in what is most effective in different countries

count improvements in health from causes outside the health sector

encourage finding new ways improve health as cost effectively as possible

be impossible to 'game' as it tracks what we really care about

The High Level Panel's 1st goal is to 'End Poverty'. It suggests we measure this with a set of indicators related to income and material living standards (the non-financial aspects of poverty are covered in other goals). As with health, it seems very likely that a goal like this will be present in whatever final form the Successor Goals take. One of the key indicators used by the Panel is the number of people below the World Bank's $1.25 a day poverty line. This line measures the market value of all the goods a person consumes (even if they were made personally rather than bought) and adjusts for purchasing power parity (PPP). The other indicators suggested are improved access to property rights, access to social protection systems, and reducing deaths due to natural disasters.

Other groups have called for a measure of financial inequality such as the Gini coefficient to be added to this list, but the Panel resisted this, focusing on absolute poverty. One reason for this resistance to an inequality goal is that equality can be improved in ways that make everyone worse off, such as by lowering everyone's income but lowering the richest people's by the largest amount.

There is, however, a simple way to have an indicator that measures financial prosperity, takes financial inequality into account, and is immune to the above problem. Consider GDP per capita, which is a simple measure of the average amount of consumption per person, and thus of material prosperity. This measure takes no account of how consumption is distributed in the society, and thus no account of inequality. If we simply measure the GDP per capita, we effectively assume that the benefit to an individual of increasing consumption from $1,000 to $2,000 per annum is only a hundredth that of increasing from $100,000 to $200,000. However, we know that individuals have diminishing marginal returns on consumption: the more you are already spending, the less benefit you get from spending an additional dollar. Economists have measured this relationship and found it to be logarithmic (or even more quickly diminishing). If it were logarithmic, it would say that the benefit one gets from doubling one's consumption is the same no matter what the starting point. Thus the two changes in consumption mentioned earlier would count as equally beneficial.

This chart shows that between countries and within countries there is a strong relationship between the logarithm of people's income and their life satisfaction.

We can take this into account by taking the logarithm of each person's consumption (adjusted for PPP) before averaging them. We could call this the 'average log-consumption', and it would be a measure of the prosperity in a country. Suppose one person consumes $1,000 per year and another consumes $100,000 per year. The logarithms are:

If we added $1,000 to the poorer person's consumption, it would take the average up to 4.15. Whereas if we added $1,000 to the richer person's consumption, it would only take the average up to 4.002. In practice, the figures for the average log-consumption in different countries would all be within the range of 2.50 to 4.50. Increasing it by 0.01 corresponds to a rise of about 2% in consumption across the board, or a smaller rise targeted at the poorest.

Using a measure like this for (economic) poverty will:

never reward lowering some incomes without increasing others

be based on scientific results about diminishing returns on consumption

be a decent proxy for a gross domestic happiness index

get the best of both worlds of GDP per capita and an inequality measure

avoid distortions caused by having an arbitrary poverty line

be possible without gathering much new data

This indicator will thus be a useful way of measuring a development goal on financial poverty, and would also be a very useful general indicator of a country's prosperity for other purposes (such as measuring progress, classifying countries, and being targeted by government policy).

Both Healthy Life Expectancy and Average Log-Income measure what really matters, and do so with relatively modest additional data gathering. If we are serious about these development goals, we should incorporate these measures.

Rob Wiblin

GiveWell interview: on causes outside global health, GiveWell Labs and fundraising

Research Director Robert Wiblin interviewed GiveWell co-founder Elie Hassenfeld on a range of issues suggested by volunteers and members of Giving What We Can. This is the third post, which covers causes beyond global health, GiveWell Labs, and charity fundraising. An unabridged transcript of the interview is available 

RW: You said that you thought that most of the increase in cost-effectiveness - or your hopes of finding charities that are more cost-effective - came from different sorts of causes, such as scientific research, catastrophic risk and migration. What are some of the top priorities at the moment?

EH: They are areas about which we currently know very little: the broad area of funding scientific research and the broad area of advocacy. An example of the latter would be lobbying for increased foreign aid or better allocated foreign aid or advocating for something related to immigration regulations across countries. These are areas that we find appealing. So far, we’ve published a page on 

 - both of those would fall into the catastrophic risk category. We’ve also published a page on 

 in low-income countries. Basically, we see these big areas to look into. Broadly, we’re open to pretty-much anything that could have a significant impact on humanitarian outcomes. We’re trying to come up with a systematic process to briefly investigate different areas, share what we’ve learned, and then be in a position to decide which programs deserve increased attention from GiveWell. The area we’ve actually spent the most time on is meta-research - primarily medical meta-research. This means trying to improve the replicability and reproducibility of medical trials, which to me, somewhat surprisingly, is a field that could use some support.

RW: So I imagine in a lot of these other causes that you’re hoping to investigate and get recommendations from in the future, it’s going to be harder to get firm evidence of impact in the same way that was possible in global health. Are you going to, to some extent, lower the standards or be willing to accept greater risk in those recommendations?

EH: It’s definitely going to be totally different. I think a nice quality of the research and recommendations is that they’re about as quantifiable and measurable as I think charity can be, and even then I think there’s a large aspect of the conclusions that we’ve reached that are not based entirely on quantifiable information. As we move onto new areas, they’re obviously much less measurable, quantifiable, objective, and so therefore our standards are going to remain high. Our standards of critical analysis, transparency, open discussion will be as high as ever. In some ways, I think we will need to have an even higher focus on our critical analysis, because it’s so much easier to go down a bad path when you don’t have that quantifiable outcome or that very measurable bottom-line to hold yourself accountable to. It is risky and it is difficult, but we want to do this - we feel the need to do it - because if they could be more impactful than the organisations we’ve found today, then we have to look at them. GiveWell is not about minimising risk or finding high-probability-of-impact charities. What we broadly care about is having the most humanitarian impact per dollar, and if that means having more risk, there is absolutely no reason that we would stay away from it, I mean we intend to be very bold.

 to try to get new and exciting projects off the ground – how's that going? What kinds of things are you funding, if any, and how much money is in the pot?

EH: We're open to getting new organizations off the ground, providing partnership to existing organizations, open to writing a blank check outside of global health and development that doesn't have the same type of evidence. All that is included in GiveWell Labs. The biggest focus that we see now for GiveWell Labs is figuring out which causes we want to be involved in. Do I want to focus in on global health? Is that the place GW Labs can have the most impact? Or should it be a particular causes such as advocacy? That's the project that we're undertaking. This is all at very preliminary stages, so what is out there so far are the shorter investigations of new causes that we've published, some conversations we've had with various experts in different areas, and then our research meeting audio and transcripts. But broadly GiveWell Labs today is sort of where GiveWell itself was in the fall of 2007, beginning of 2008. Preliminary stage of trying to figure out how we should go about doing the work.

RW: What difficulties with giving unrestricted funding to charities were you trying to address by starting GiveWell Labs? Do you want to have more control over the projects or do things that no existing organization was working on?

EH: There are a few different aspects of GiveWell vs. GiveWell Labs. GiveWell direct aid is what the current GiveWell was up until the creation of GiveWell Labs. We were looking for proven cost-effective organizations that can take in more money and do more good. What we were looking for was programs that had strong evidence of effectiveness, organizations that could take in an arbitrary amount of money (we recommend them, they could get $250,000 or $5 million) and they would accomplish more good. When we moved to GiveWell Labs we want to be able to do something else, consider causes that don't have the same evidence of effectiveness. There's no way one could make an argument for the cause of meta-research using the same criteria that we have used for GiveWell direct aid. Bed nets are a very different animal than funding literature reviews or reproducing existing studies. We want to look into those areas, this is something different, therefore we want to call it something different and see it as a different activity. There is this other change that goes from providing unrestricted to project funding. I think the biggest driver is that as you move into these other areas, the most common way organizations work is through the provision of project-related funding - the unrestricted vs. project distinction is not major. If we have a particular focus and we find relevant organizations, then sure, unrestricted funding works. On the other hand, we might want to play a more active role in the funding process. Major philanthropists could say that they want to create these organizations or that they want a set of organizations to focus on these particular issues that they may not have otherwise focused on. That is also a diversion from what we've done in the past, from being more passive and funding existing organizations to do the things they already want to do, to being more of a driving force behind the activities.

 suggesting that it should be possible to beat the cost-effectiveness of GW's top recommended organizations by instead giving to an organization that would fundraise for those charities. It seems like each dollar spent on fundraising raises $4+ for whichever organization - even using fairly mundane fundraising methods like having people speak to strangers on the street. Do you think this argument makes sense? If so, does it have any consequences for what our members or anyone else should be doing?

EH: I wonder what led you to the conclusion that a dollar on fundraising creates more than an additional dollar of donations? If it were true, charities should spend significantly more on fundraising, that would make them successful. The major question is, do you feel that is the case?

RW: My impressions are that it’s something that is generally accepted among fundraisers that they can pay people to do this and raise more money than what it costs them. Your main doubt is around the empirics of that? If there were strong evidence, would it potentially change your recommendations, or attract more attention from you?

EH: It could. I'm pretty skeptical that that's the case. A lot of organizations out there could easily increase the amount of money they spent on fundraising. I don't have specific knowledge, but Doctors Without Borders is a gigantic organization. They're credited with potentially creating direct-mail fundraising. Very successful. They also have a relatively low fundraising ratio. They could increase the fundraising ratio – why don't they? If it were as simple as that case make out, you should see charities behaving differently.

RW: That's the big question, why wouldn't they just spend more money on fundraising? Donors are really averse to organizations with a large overhead - this is a large obsession. If a charity was spending too much on fundraising, that would deter people from giving in the first place. Do you think that's a possible explanation?

EH: I'm skeptical that it's the main driver of what's going on here. Fundraising is hard. At GiveWell, I don't feel like we could spend an additional dollar and raise two additional dollars for our top charities. We just don't see the curve of what happens as we scale up money spent on fundraising driving more money to our top charities. I think there's a lot of charities out there – why don't they spend more? Or you're making an argument for why they don't. I think there's all these organizations out there that are incredibly successful, professional, talented at raising money, and they give their fundraising ratios a relatively low amount. If it were as simple as this argument implies, it doesn't make sense that they would do this.

RW: What if you were a small charity like AMF? If you're a large organization, everybody already knows you, it's possible you could speak or send something to everyone who would be likely to donate. But there are many people out there that haven't heard of AMF – do you think there might be more low-hanging fruit yet?

EH: Maybe. They're getting letters from MSF, from Nothing But Nets, I think it's a more competitive, more challenging space than is implied. I think the bigger picture is, it doesn't quite sync up that this should be obvious, and therefore I would assess this case on the basis of a specific organization demonstrating that it would be able to do this. It's a competitive field, there are incentives for people to go into this and be successful, so all of those are reasons that the theoretical case is not particularly compelling to me. If someone said, “I am able to do this,” and address all the questions, particularly on whether they were just reallocating funds, which is challenging to determine, that would be interesting. But it doesn't strike me as one of the more promising endeavors.

Look out for the last part of the interview on this blog soon.

Image credit: NASA/ESA and D. Jewitt (UCLA)

Just how rich are you?

Sure, you might not feel all that rich compared to the mansions and millionaires around you, but what if you compared yourself to the global poor?

If you’ve played around with Giving What We Can’s 

, you may have found that you’re much richer than you thought. For example, a family of four in the United States earning the typical (median) amount of income (about $50,000) is actually 7.7x richer than the typical person worldwide.

But what you might not know is that Giving What We Can recently updated the calculator with the latest research into worldwide income distribution. 

, an economist and researcher at the World Bank, updated the figures. Previously, the calculator had used 2002 data, but is now updated to 2008 numbers, the latest year for which there are surveys for most countries. Furthermore, all calculations are adjusted for inflation and also now adjust for 'purchasing power parity', or the fact that goods are more expensive in some countries than others. Milanovic’s research and approach can be found in his book '

This new data also shows that the typical global income has risen since 2002 because of solid economic growth across much of the developing world over that period. People in the developed world who previously found themselves in the 99th percentile might now find themselves in the 98th or 97th percentile instead. This is a great thing! Nonetheless, such a person would still have an income more than 30 times higher than the bottom third of Indians. The typical person globally is still living on what just $4.10 would buy you in the US each day.

One should note that the calculator will not display data for people below the 80th percentile of earnings worldwide (i.e., individuals earning less than $7,000, or a four person household earning a combined income under $27,000). Those who would like the full distribution for each country should use the World Bank's 

However, with this new update, the 'How Rich Am I?' calculator is the most accurate simple income calculator on the web, and should be a useful tool for those wanting to place yourself on the distribution. So 

 and see how truly rich you are, compared to the rest of the world!

Siyi Hao

Don't be shy, donate to SCI!

Schistosomiasis Control Initiative (SCI) attempts to tackle some of the most socioeconomically devastating diseases in sub-Saharan Africa. Through their work in countries such as Burundi and Ethiopia, SCI fights to stem epidemics of schistosomiasis and intestinal worms, both parasitic diseases spread by contaminated water. SCI is one of Giving What We Can’s high-confidence recommendations, as well as being among GiveWell’s top recommendations. In this post we take a look at SCI as they make inroads into new operational areas.

Although they have low mortality rates, schistosomiasis and intestinal worms impair the growth and cognitive development of millions, particularly children. The knock-on effects from this are obviously huge, and tackling these parasitic diseases poses one of the greatest challenges in addressing sub-Saharan Africa’s developmental problems.

SCI conducts mass deworming programs, treating large cohorts of people with deworming drugs at a cost of around $0.79 per treatment. SCI works on getting grants, identifying recipients and offering support to stricken regions.

Predominantly, because of its strong track record and high cost-efficiency. SCI has completed many national deworming programs. Indeed, with SCI’s support, serious schistosomiasis morbidity was eliminated in Uganda through 2003 to 2010. Furthermore, SCI’s treatments only cost 50 pence per person per year, and according to WHO, treating Neglected Tropical Diseases (NTDs) is a ‘best buy’ in public health. At the end of April, SCI reached a milestone by offering the 100 millionth treatment for bilharzia.

SCI will now be contributing to funding the launch of the National Master Plan on Neglected Tropical Disease in Ethiopia, and has agreed to provide funds for operations in both Tigray and Zege regions in Ethiopia. SCI will also be injecting money into expanding their operations in Mozambique, Senegal, and Uganda through to October 2013. Furthermore, as of 2013, SCI is expanding its operations into Mauritania and Democratic Republic of Congo.

Historically, in the face of a lack of publicity and funding, SCI has worked to treat NTDs and has generated substantial results. You now have an opportunity to contribute to an organisation expanding its operations within established target zones, and into new areas of sub-Saharan Africa. A donation to SCI therefore represents a donation to an organisation which has a huge amount of ambition, and is backed by a strong track-record in treating NTDs. Furthermore, the implications of SCI’s work for sub-Saharan development mean that the effects of 

every donation will be felt for decades to come.

Giving What We Can

We're hiring!

In just three years, Giving What We Can has grown to over 300 members in 25 countries worldwide. The community has pledged over $130m towards ending poverty.

We're now looking to step up our efforts. We're looking to build a dynamic, inspiring team to help spread the word, grow the community and produce rock-solid research.

We're recruiting for a Director of Communications/Community, a Director of Research and a Research Fellow in Global Prioritisation. And we're always on the look out for graduate volunteers and interns. Details below - or 

. Do you know anyone that might be interested? Share this post with them!

Are you ready to take Giving What We Can forward? We've just authored our communications strategy for 2013-2014 and we're looking for someone to deliver our message to our target audience and create thousands of leads to follow up. You'll help to shift public debate so that everyone who's anyone will be talking about effective altruism. Thanks to your efforts, giving 10% will increasingly be seen as the social norm.

You'll have online and offline marketing experience. You'll be able to tap into networks of early adopters and organise brilliant, creative events for which word spreads virally. And you'll know how good content gets produced - in video, web and print formats - and be willing to get stuck in where you can. Bonus points for knowledge of Adobe CS or equivalents, Drupal and HTML/CSS.

You'll be able to draw on a small team of volunteers based in Oxford and remotely, and you'll work hand-in-hand with the Director of Community - or, for the right candidate, we will combine the two roles. You'll report to the Executive Director.

Do you love the idea of building a movement? Can you hold seventeen email conversations while also speaking on the phone and writing sparkling, engaging member newsletters? In this role you'll grow our community at a faster rate than ever before - and with every new member you'll be saving lives.

You'll provide one-to-one guidance to members and potential members - helping inspire members to reach out to their social networks to grow the community. You'll have a track record of building or strengthening a community and bringing new members on board. You'll understand the value of CRM systems and learn CiviCRM in no time - if you don't know it already.

You'll have a team of volunteers to draw on and you'll work hand-in-hand with the Director of Communications - or, for the right candidate, we'll combine the two roles. You'll report to the Executive Director.

In this role, you'll help change the way people think about charity, shifting hundreds of thousands of pounds to better causes. You'll directly improve the lives of thousands.

Your main role will be to identify the next level of world-beating charities. And with slick presentation skills you'll be able to translate the detailed quantitative analysis and research methods you use to a wide audience via speaking events, workshops and conferences, as well as through blog posts and social media. Another area of research is in 'cause selection', trying to identify the best metrics to target in order to most improve the world in the long run.

You'll be an inspiring manager of a passionate group of interns and volunteers working both in Oxford and remotely. You'll report to the Executive Director.

In this role your overall aim would be to do high-level research into which approaches for improving the world are likely to have the best long-term expected impact. As a full-time member of the CEA team you would play an important role in finding the best ways to do good and moving resources into them. The specifics of this role are still to be determined and would be negotiated with a successful candidate.

An undergraduate degree in a subject such as development or global health, economics, econometrics, statistics, political science, ethics, mathematics, physics, philosophy or a field that offers relevant training is essential. The ideal candidate would also have several years of work or postgraduate experience, a thorough understanding of the key ideas of 'effective altruism' and a strong academic background, though we will consider candidates without all of these characteristics.

A lot of charities will tell you that you can make a difference. Here we actually calculate that difference and we are driven by improving the measurable results of this organisation.

Offices don't come much more intellectually stimulating than ours. Based in offices shared with the Future of Humanity Institute at Oxford University, you'll be part of a team that dedicates itself to understanding how we can do the most good - and actually delivering on those ideas.

All three positions offer fantastic personal development opportunities. We're looking for talent as well as experience - and you'll have opportunities to learn on the job, supported by a community dedicated to boosting their personal effectiveness.

Follow the link to the application form in any of the full job description documents.

Our sister organisation, 80,000 Hours, is 

The Worst Way of Picking the Worst Charities

. Here, they ranked non-profit organizations by the amount of money they paid solicitors, or fundraisers, and the amount those fundraisers returned. They mention that “watchdog groups say no more than 35 percent of donations should go to fundraising costs” and suggest that these organizations are basically nothing more than scams designed to get fundraisers rich. Perhaps these charities listed here actually are some of the worst. Perhaps they’re even outright scams. However, the amount of money they spend on fundraising isn’t going to let you know whether the organization is one not worth your donations.

 — three organizations that regularly rank non-profits — came together and wrote a 

"The percent of charity expenses that go to administrative and fundraising costs—commonly referred to as ‘overhead’ — is a poor measure of a charity’s performance.”