We've found that most of the strongest charities - just based on scanning websites - are in the area of health. Because we want to recommend at least one "directly aiming for economic benefits" charity if at all possible, we're planning on using an approach more similar to last year's process - i.e., a grant application - for this area.Before we put together the application, we're trying to get a broad sense of what different types of charities there are in this area and what sorts of information will be reasonable to request. We're talking to representatives of various charities to try to get at this. Below is a (conceptual, not verbatim) transcript of a conversation I had last week with TechnoServe (technoserve.org). The representative has signed off on this transcript.
Holden: I see you have 5 programs listed on your website under the Work and Impact section. Business plan competition, entrepreneurship training, building businesses and industries, capital access, Aspen Network of Development Entrepreneurs. Could we get a breakdown of expenses, past present and future, by these areas?
TechnoServe representative: That information can probably be gathered but I don't believe it's how we currently organize the financial information. I don't work closely with the financial department, but I believe they track it by country and segment it by program and there's something like 65 programs, and the programs are largely segmented based on who's funding them.
Holden: informally, could you tell me which of the 5 programs are bigger and which are smaller? I'm guessing that Aspen Network for Development Entrepreneurs doesn't take up much of TechnoServe's funding while the business plan competition, entrepreneurship training, building businesses and industries might be bigger.
TechnoServe representative: the Aspen Network is tiny as far as our resources, it's basically a small commitment for one staff person. Entrepreneurship training (outside of business plan competitions) is fairly small at this point I believe. I also believe that capital access is fairly small, some pilot projects (I'm referring to capital access-specific projects although other projects involve assistance with capital access). The business plan competition category is bigger. Building Businesses and Industries is the biggest by far.
Holden: What about within the programs, are we going to be able to get a breakdown by for example how much is spent on staff vs. capital costs vs. vouchers for business services?
TechnoServe representative: I don't know whether it would be easy to break it down that way. So you know, business vouchers are almost always provided by companies in that country and are not funded or even funneled by TechnoServe. I'm not sure we'd count them even in our revenue.
Holden: So it sounds like the main programs involve fairly intensive assistance for businesses. Does TechnoServe ever or often take a stake in these businesses or recoup funds?
TechnoServe representative: There have been a few isolated incidences where some kind of fees are recouped, perhaps as a percentage of profits, but that may have happened in somewhere between 1% and 5% of cases. By no means is it standard.
Holden: so it sounds like basically TechnoServe's main activity is providing free business assistance funded by donations.
TechnoServe representative: That's right.
Holden: so how do you track the impact of these activities and see how you're doing? What are your metrics?
TechnoServe representative: Basically, for the enterprises that we work with, we track them to see how much revenue they're generating and how many people they're employing, and how much money they're paying in wages, and how much they're buying from small-scale suppliers, so basically the financial bases of the enterprises that we're helping.
Holden: And do you track that information before and after TechnoServe steps in or is it just after?
TechnoServe representative: I think someone else will have to answer that question. I'm not sure how much of a baseline is done beforehand.
Holden: And do you have any information or analysis on the question of the counterfactual, how would these businesses be doing if not for TechnoServe? Stats on comparable businesses or businesses that didn't quite make the cut?
TechnoServe representative: We will tend to have some general information along those lines, for example, for cashew farming, how much the average cashew farmer in Mozambique makes as a comparison for how much TechnoServe-assisted cashew farmers are making.
Holden: Do you track information on the standard of living for entrepreneurs and employees?
TechnoServe representative: We have info on the standard of living in an area, how much people make per day, but I'm not sure that we measure the work on a standard of living basis directly, except in an anecdotal fashion.
More in-depth evaluations have also been done that try to get at this question qualitatively in certain areas. Larger-scale surveys.
Holden: OK so to summarize, the full picture of how TechnoServe is tracking its impact is (1) tracking financial information for businesses you work with, (2) having general information about the areas you work in, both overall incomes and incomes for people who might be considered comparable to the people you're helping, (3) more in-depth evaluations using survey data to spot check how things are going.
TechnoServe representative: That's right.
Holden: Now I'd like to know how much of this information we might expect you to share with (a) GiveWell (b) the public at large, i.e., give us permission to make the materials public. First on (1) the financial information on businesses?
TechnoServe representative: This information is in the Annual Report in the flowchart. [Holden's note: this flowchart gives # businesses, total revenues, total profits, total wages, total product purchases from small-scale producers, # families who "benefited from these income sources"] We wouldn't be able to share it at an individual business level because that would be disclosing businesses' financials which could hurt their competitive position. It should be straightforward to share this information on a country level.
Holden: (2) general info about the area, standard of living?
TechnoServe representative: I'm not sure. This isn't one of our required core indicators, so it may not be standardized. I could look into how much could be shared.
Holden: What are the required core indicators?
TechnoServe representative: The numbers given in the annual report are the required core indicators.
Holden: What about sharing (3) in-depth evaluations?
TechnoServe representative: I can find out how much of that is available and how much people feel comfortable sharing that. That may not be a big issue.
- Sounds to me like there's very little info here that could offer meaningful, statistically reliable insight into this group's effectiveness.