The good news on maternal mortality: Uncertainty about everything except the advocates' response

UPDATE 4/15, 4pm EDT: see end of post. The NYT lead story today (as well as other media) reports a new study with some very good news:

For the first time in decades, researchers are reporting a significant drop worldwide in the number of women dying each year from pregnancy and childbirth, to about 342,900 in 2008 from 526,300 in 1980.

So happy about success! Alas, the universal rule with media reports of development statistics is that they are mishandled so badly that they raise more questions than answers, such as:

(1) why is this reported as an absolute number rather than a maternal mortality rate (usually per 100,000 live births), which is the usual thing of interest, and would show even better news because of the large population increase since 1980?

(2) why attempt to estimate it for the whole world rather than only for those countries that have the most solid data?

(3) it's well known that maternal mortality numbers over the years have been mostly made up, a problem that has only recently been (partially) corrected (i.e. sometime since 2000). The 1980 and 1990 numbers are worthless, so the headline-grabbing sentence above is the wrong way to present the findings. Indeed the NYT story notes:

the new study was based on more and better data, and more sophisticated statistical methods than were used in a previous analysis by a different research team that estimated more deaths, 535,900 in 2005.

The story cannot simultaneously report "more and better data" and report a trend "drop," since the new numbers will not be comparable to the old "less and inferior" data. We can't know from this story what part of the change is due to change in methods, and which is real.

The most clear and interesting thing to emerge from this story is this:

But some advocates for women’s health tried to pressure The Lancet into delaying publication of the new findings, fearing that good news would detract from the urgency of their cause, Dr. Horton said in a telephone interview.

“I think this is one of those instances when science and advocacy can conflict,” he said.

Dr. Horton said the advocates, whom he declined to name, wanted the new information held and released only after certain meetings about maternal and child health had already taken place.

He said the meetings included one at the United Nations this week, and another to be held in Washington in June, where advocates hope to win support for more foreign aid for maternal health from Secretary of State Hillary Rodham Clinton. Other meetings of concern to the advocates are the Pacific Health Summit in June, and the United Nations General Assembly meeting in December.

People have long accused aid officials and advocates of being afraid of putting themselves out of business by success, but it's rare that such an episode is documented so clearly.  Sad, very sad.

But there does seem to be some good news on maternal mortality in here somewhere, so let all non-self-interested people celebrate!

UPDATE: Columbia Journalism Review on 4/14 posted a story on the massive confusion caused by the press on both aspects of the story discussed here.

Read More & Discuss

Michael Clemens won’t let up on the Millennium Villages + bonus links

It’s nice to see scholars bringing attention to the critical need for evaluation and informed public dialogue (not just “success stories” or short-term impact evaluation) for the Millennium Villages Project, which we have also covered on this blog. Michael Clemens of the Center for Global Development is currently carrying on a very revealing dialogue with Millennium Villages. In Michael’s first blog post which we blogged, he makes three central points:

  1. The hundreds of thousands of people living in the Millennium Villages, present and future, deserve to know whether the project’s combination of interventions is backed up by good science.
  2. Randomized evaluation is the best way to do this. While it may be too late to properly evaluate the first wave of villages, there is still time to conduct such a study for the next wave of villages.
  3. The MVP evaluation should demonstrate long-term impact before it is scaled up.

In a subsequent post, Michael parses the curious non-answer he receives from the director of monitoring and evaluation for the MVP, Dr. Paul Pronyk. He breaks down—for those of us not intimately involved in the finer details of impact evaluation—the difference between true scientific evaluation and what the MVP says it is doing, namely “matched randomly selected comparison villages.”

What the MVP has done is something very different from…a rigorous evaluation.  First, village cluster A1 was chosen for treatment, for a range of reasons that may include its potential for responding positively to the project.  Then, long after treatment began, three other clusters that appear similar to A1 were identified — call these “candidate” comparison clusters A2, A3, and A4.  The fact that all three candidates were chosen after treatment in A1 began creates an enormous incentive to pick those candidates, consciously or unconsciously, whose performance will make the intervention in A1 look good.  Then the comparison village was chosen at random from among A2, A3, and A4.

Differences between the treated cluster and the comparison cluster might be due to the MVP. But those differences might also be due to how the original Millennium Village was chosen, and how the three candidate comparison villages were chosen.  This is not a hypothetical concern…

So, either the MVP director of evaluation does not understand evaluation...or he thinks we won't know the difference.

Dr. Pronyk promises the release of the MVP’s midpoint evaluation at some unspecified time later this year, and said they “look forward to an active discussion about the initial findings regarding poverty, hunger, and disease in the Millennium Villages.” We hope the scholarly community and the wider reading public concerned with development issues will give Dr. Pronyk precisely what he’s asking for.

Bonus Links

* Sounds a bit like a parody we wish we’d written….but it’s true. Yesterday’s NYT features this quote from a story on China’s bid to supply California with technology, equipment and engineers to build a high-speed railway, and to help finance its construction:

“We are the most advanced in many fields, and we are willing to share with the United States,” Zheng Jian, the chief planner and director of high-speed rail at China’s railway ministry, said.

* We’d be remiss not to mention this helpful timeline of celebrity aid to Africa featuring an interactive map from Mother Jones (and some additional commentary from Wronging Rights and Texas in Africa.)

Read More & Discuss

Best in Aid: The Grand Prize

As long as there are disasters, there will always be people who want to help by whatever means first strikes their fancy. There will be those who insist on giving shoes (including such high profile experts as Jessica Simpson and Kim Kardashian). Still others offer used yoga mats, or baby formula. Ports and roads clogged up with shoes and yoga mats cannot deliver essential medicines, food and supplies. Then there are those who swoop in to adopt children before their extended families have had time to locate them; or just show up to ‘help’ as unskilled volunteers, adding to the confusion and occupying jobs that could go to locals. And there will always be organizations around to capitalize on those uninformed good intentions.

But now there is a small but growing chorus of voices dedicated to equipping individual donors with information on how to help effectively in a crisis. This movement has the power to harness the generosity of individuals, change ingrained giving practices, and create positive pressure on NGOs and aid agencies to demonstrate the impact of their work.

That’s why the award for Best in Aid goes to…the Smart Giving movement, nominated by Saundra Schimmelpfennig of the blog Good Intentions are Not Enough.

This year, a week after the Haiti quake, Stephanie Strom of the New York Times wrote a story on the “unprecedented effort” to teach Americans to resist the impulse to send the wrong goods to Haiti.  Many advocated just sending something very much needed and which has a low transport cost to value ratio: cash. The advice to send cash “appears to be reaching a tipping point,” wrote Strom. Some Americans saw first-hand the piles of unneeded clothing donations in the aftermath of Katrina, or heard about aid distribution problems after the Asian tsunami. Now, people are hearing the message from politicians and policy makers spreading the word on Smart Giving to Haiti in real time, in time to prevent mistakes that cause unnecessary suffering and tragedy.

Contrast Strom’s story with the high profile stories that have appeared consistently since the current surge in interest in global poverty started earlier this decade, like this NYT headline:

Coverage of both global poverty and disasters always stressed the same thing: how much was needed in TOTAL donations. It was never about the danger of the WRONG donations. Today it is.

Saundra Schimmelpfennig herself appeared in the NYT article, and many other news sources (among them CNN, NPR, USA Today, Canada’s CBC radio, WNYC, The Daily Beast, The San Francisco Chronicle, and the Christian news magazine World) sought her advice on everything from the dangers of adoption in the immediate aftermath of a disaster, to how to evaluate disaster relief volunteer opportunities. Here on Aid Watch, guest blogger Alanna Shaikh’s post on how not to help in Haiti, called Nobody wants your old shoes, became the blog’s second most popular and most-widely circulated piece ever (the first was a satire, which we’re no longer allowed to talk about).

The campaign against relying on overhead ratio as a measure of charity effectiveness is also part of the good giving message. In collaboration with six other nonprofits, Tim Ogden of Philanthropy Action launched a campaign last December to convince donors to dump the overhead ratio - the measure of how much money goes to programs versus administrative costs - as a primary means of evaluating the effectiveness of a charity. “We’re finally at a point where people do have an alternative,” said Ogden. In the last few years, organizations like GiveWell, Philanthropedia and Great Nonprofits have emerged to give people more useful information about charities, and to pressure charities to devote the resources to collecting that information and making it public.

Finally, the intensity of the debate on evaluation with randomized controlled trials in the academic world, and new organizations like 3IE (the International Initiative for Impact Evaluation) and DIME (the Development Impact Evaluation initiative at the World Bank), are other facets of the same movement. Behind the heated debate on what methods of evaluation to use, we see a much larger point – many more donors now insist on serious EVALUATION and ACCOUNTABILITY than used to do so.

As we’ve said on this blog before, accountability is not something that anyone accepts voluntarily. It is forced on political actors, aid agencies, and NGOs by sheer political power from below, from well-informed advocates for the poor and listening to poor people themselves. All of this may still be in its early stages, but since aid really CANNOT work without serious accountability, the Smart Giving movement is the best news to come along in aid in quite a while.

UPDATE: (3/20, 8:21am) the Center for Global Development reacts to our inclusion of 3IE, which was their brainchild.

Read More & Discuss

Area Man's Starbucks Purchase Finally Ends African AIDS Epidemic

by Jeff Raderstrong at the blog Change Charity:

After deciding to add a bag of (Starbucks) RED brand coffee on top of his vente mocha latte order, area man Bill West completed the final piece of the puzzle to end the AIDS epidemic in Africa...

"This is a great day for humanity," said Michel Kazatchkine, Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, where Starbucks made the $1 donation--taken from West's purchase--needed to rid the continent of the disease that had crippled it for decades. "All of our work, all of our time, all of our hopes are now validated by this one last push to end AIDS in Africa."

...Bono, humanitarian activist and U2 front-man, reached out to the broader global community to recognize the efforts of the people that made it possible.

"It is important to remember what went into this momentous occasion," said the rock star, one of the founders of the Product RED brand. "The Product RED line successfully mobilized Western consumers to go out and buy things they either already had or only moderately desired under the guise of social responsibility. With out these compassionate consumers, or the compassionate Starbucks marketing directors who decided to give up razor-thin amounts of their profit margin to the Global Fund in exchange for the Product Red partnership, this debilitating disease would still be destroying Africa."

Read More & Discuss

Analyzing We are the World for Haiti as a Music Critic and Aid Critic

Even aid critics have their sentimental side. I confess I was genuinely moved watching this video, which has been viewed more than 13 million times on YouTube. The video is very inspiring and well done. It made me let myself go and be carried along by the idealism and hope.

Unfortunately, my kids would like to point out that I also get sentimental listening to Scorpions' "There's No One Like You" , so  I may not be the best qualified music critic available.

So going back to my comparative advantage of being an aid critic, a couple of questions on the lyrics of We are the World at 25 for Haiti :

[Adam Levine] We are the ones who make a brighter day so lets start giving.

Dear Mr. Levine,  it touches me as a wee bit hubristic to restrict "brighter day" making abilities to "we" who are "the ones." Are you saying you are one of "the ones"? By the way, who are you?

[Will-I-Am] "Like Katrina, Africa, Indonesia and now Haiti needs us, they need us, they need us"

Dear Will-I-Am, Did you choose Indonesia to receive aid because it rhymes with "they need us"?

Aside from these quibbles, more power to all you artists who participated in this ! Can you let us know who to contact to make the "We aid agencies are accountable to the Haitians for results" music video?

Read More & Discuss

It’s a love fest!

Starbucks, in partnership with RED, recently announced a plan to have musicians in 156 countries participate in a Global Sing-along, which produced this totally adorable video:

What does this have to do with the price of (coffee) beans? The All-You-Need-is-Love fest is part of a giant global plan to save the continent of Africa from dying of AIDS (and also maybe sell some coffee and reap the marketing benefits of associating their brand with the compassionate, virtuous, saving Africa image).

If you spend $15 at Starbucks, they’ll give you a CD with above song on it (supplies limited!), and donate a dollar to the Global Fund.  It gets more convoluted from there: Go online to the Starbucks love website and draw a cutesy love card to trigger another donation from Starbucks to the Global Fund, this time of 5 cents. Finally, if you upload a video facing your computer camera and singing goofily along to the Beatles classic, Starbucks will toss the GF another nickel.

It's almost enough to make you forget that if you bypassed Starbucks all together and just donated your $15 bucks to the Global Fund you’d be helping…15 times more.

Read More & Discuss

Product (RED): from ridicule to dialogue

This blog has ridiculed the RED campaign from all possible angles. We’ve questioned whether creating a few pennies of aid through buying a corporate product is worth all the hype, criticized the murky finances of the legal entity behind RED, and gone after RED co-founder Bono with jibes, fake awards and parodies. Displaying exceptional cool in the face of this mockery, Bobby Shriver, the other co-founder of RED, met me for a coffee. He could have gone all angry and defensive and preachy about His Great Initiative (which others in his place have done). Instead, he asked for suggestions on how to improve RED.

In response to my suggestion that RED source more products from Africa, he pointed to the “From Africa To Africa” coffee from Starbucks and said they had apparently not done enough to advertise they were already doing that. He also said he was open to discussing it more. I think RED marketing to support self-help by African entrepreneurs to sell in the US would be brilliant. (I have to report that the RED coffee I tried was OK, but nowhere near the Tomoca Coffee I purchased in Ethiopia – the best coffee I have ever had but difficult to buy outside Ethiopia.)

I too tried to be open-minded. He understands the politics of advocacy much better than I do: “You’ve got to get them talking about the cause at the Pig Roast” (the typical fund-raising event for a congressional candidate). Let’s give Shriver and RED credit for raising awareness of AIDS in Africa, not to mention of African poverty in general (although I’m sticking to my argument that the Bono/RED approach has led to some paternalistic and misguided remedies to those problems.)

Is ridicule a good way to promote dialogue? I don’t know. I don’t believe in “why can’t we all just get along” rather than debate. There are already plenty of people using aid-establishment-speak to talk politely around the issues—blunt critiques and satire can be useful to break that spell. Shriver also deserves credit for hearing the criticism and still being willing to engage in dialogue. I am wondering if sometimes I should look harder for dialogue before the satire starts.

Read More & Discuss

Telethon: "We've seen the earth quake but the soul of the Haitian people it will never break."

You might expect a certain critic of celebrity-aid to make fun of the Haitian telethon last night. And there were indeed some cringe-inducing moments in this 4-minute video summary I just watched.

But it's a little-known dark secret that crotchety skeptics often have a sentimental streak.  So what's really wrong about some well-meaning gushy-anthem-belting megastars raising money for some currently very needy people?

I just hope that some day we will get to the point where there will also be an anthem about accountability. Here's some lyrics by an anonymous contributor, for which I take no responsibility:

So clear the fogs/Listen to the blogs/Don't just throw dollars out the door/Make sure them reaches the poor.

Read More & Discuss

Having fixed Africa and AIDS, Bono tackles filesharing (from BoingBoing)

Bono, in a New York Times top-ten essay filled with of Brilliant Ideas That Will Fix The World If Only They'd Listen To Moi, says "Intellectual Property Developers" are doomed because of filesharing...

From a post on the great blog BoingBoing.

I know the NYT is desperate to survive, but having Bono as a regular columnist is...OK, I give up. How about Lady Gaga writing on counter-terrorism?

Read More & Discuss

Forensic analyst busts Victoria’s Secret

Forensic analysts look for abnormal data patterns that allow them to catch bad guys doing bad things, with many economics applications. One of their recent non-economics triumphs has been to catch Victoria’s Secret’s blatant photo- shopping of their ads, notably the example below (HT to Tyler Cowen as usual). doctored-victorias-secret-ad The most obvious giveaway  is that they snatched the young lady’s handbag out of her right hand, leaving her holding – nothing. This made the forensic photo expert suspicious and he also caught Victoria’s Secret in more subtle photo shopping. Most predictably, they increased the young lady’s bust size. (This is documented in way more expert detail than you really want.) Not only does Victoria’s Secret objectify women to be like their gorgeous models, but even the models have to be objectified to be their concept of a fantasy woman.

I’m not a marketing expert, but I'm not sure “wear our stuff and you might look good enough to be photo-shopped” is the best ad campaign.

To Victoria’s Secret’s credit, after they got caught, they undid some of the photo-shopping and reposted the picture on their web site. They gave the young lady back her handbag. However, they did not undo the fake bust.

I realize that this is all pretty tame compared with the expectations raised by the headline. But Aid Watch NEVER exploits supermodels! Even here, I refrained from giving a far more sexy, hyper-objectified female example of photo-shopping.

Forensic economics does similar things with patterns in data rather than photos. Ray Fisman at Columbia famously caught some Indonesian companies as corruptly linked to Suharto, because their stock prices would fall whenever Suharto got sick. Ray has made a specialty of this – he also caught some countries smuggling art and antiques, using discrepancies between their exports of these items to country X and the country X data on imports of these items from these same countries.

So here’s the challenge – can we use forensic economics to keep tabs on aid agencies? Oops, I forgot, there's a lot fewer people who care about aid than Victoria's Secret models. Can both of you please forward your suggestions on forensic aid evaluation?

Read More & Discuss

How to write about poor people, cont'd (the Interactive Edition)

This second post is the result of crowd-sourcing this satire. I turned to all of you in response to one commenter who really thought I needed to improve the satire quality of the previous post. Another commenter suggests reading the all-time-great classic "How to Write About Africa," which was of course an inspiration, and whose brilliant author, Binyavanga Wainaina,  I would no more dream of matching than Shakespeare.

An anonymous commenter  (an extremely talented, knowledgeable, and well known writer on global poverty, among other topics) got the ball rolling by suggesting these additions to the list:

11. Assume that all poor people everywhere have the same interests and views on all subjects. 12. You can take the views of Western-based NGOs as a proxy for the composite opinions noted in rule 11.

I then went to crowd-sourcing and many great suggestions have now come in. I have taken the liberty of liberally editing the suggestions to fit the format, the original authors are listed below:

Alanna Sheikh MPH:

13. Leave untouched the assumption that poor people are all non-white, but never openly admit it.

14. You may use the phrase "these people" as an alternative to the poor, as in "these people have nothing" or "these people still live as their ancestors have for centuries"


15. Suggest specific answers that will end poverty in every possible situation, such as a package of microcredit, fertilizer subsidies, and a women's handicraft cooperative.


16. Simplify poor people's cultural, social, and political systems as easy to understand and easy to change. You will not have space to attempt to explain why THEIR societies are so different from OUR intractably complex societies.

@altmandaniel on Twitter:

17.  It is not necessary to talk to any real poor people, they do not understand how to solve their problems anyway.

Tyler and Sarah and booksquirm inspired the following:vanity-fair-bono

18. Use liberally the pronoun "we," such as "we must act now to end poverty." You don't ever need to make clear who is "we," although it is obviously not the poor.

And John was the inspiration for this one:

19. burning-hutWhen you give an anecdote about one poor individual, make sure it is as extreme and non-representative as possible, such an HIV-positive famine victim being chased by child soldiers

Transitionland inspired:

20. Do not mention any individuals in a poor community who have now escaped poverty, don't seek any lessons, it was probably either luck or evil behavior.


21. Write about the interests of the poor as entirely consistent with other good things, such as preserving the natural environment and fighting global warming.

and inspired by Word_Bandit:

22. Appeal to the voyeurism of your rich audience reading about "the poor," but do so tastefully.


23. If anyone does finally object to the label "the poor," use "the vulnerable" instead. "Vulnerable"  has the added advantage that it is so vague that you can make up just about any story you want about this group.


24. Be sure to include statements in the form "X children die every minute because of  diseease or problem Y. Y could be easily eliminated at a cost of $Z (a modest number)." X, Y, Z can be quoted from other people whose methods of estimating X, Y, and Z you do not need to scrutinize too carefully.

Indirectly inspired by many readers:

25. Sarah-McLachlanSuggest to the readers some demonstrative action that they can do to end poverty,such as wearing a white band on their wrist. How these actions affect global poverty does not have to be completely spelled out.

OK I think that's a wrap, thank you for all of your suggestions! The outpouring of responses suggests a lot of discontent with the cliches, stereotypes, and tolerance for nonsense in poverty writing. (I don't claim to speak for all of you, feel free to disagree.)  As I have said before, remember that satire is the weapon of the weak. None of us have much direct power to change the unaccountable establishment's "consensus." But we can tell poverty writers: "get serious,or beware of ridicule."
Read More & Discuss

How to write about poor people

  1. world-bank-poverty-numberUse a precise definition of poverty: living on less than $1.25 a day, adjusted for purchasing power. Give the precise number who fit that definition.
  2. Ignore the recent revision of  this number by 42%.
  3. Do not excessively analyze geographic or ethnographic distinctions amongst poor people.blank-world-map
  4. Discuss the following: poverty traps, vicious circles, aid financing gaps.
  5. There probably won't be time left to discuss the following concepts: initiative, savings, inventiveness, resourcefulness, adaptation to local conditions, or local knowledge.
  6. Discuss only income, health, access to clean water, and literacy. Leave it to anthropologists to cover areas like happiness, traditions, ceremonies, festivals, friendships, kinship, love between men and women, or love between parents and children.
  7. ug2_palenga_2boys_05Display pictures of poor children (alternatively women).
  8. Don't show pictures of poor men, who make your audience think of drunkards, wife-beaters, or janjaweed.
  9. These topics are only for Marxists: power, class, discrimination, oppression, or history.
  10. Your knowledge about poor people should come from other writers who observe these rules.
Read More & Discuss

Aid Watch Grinch Edition: Are We Mean to Ask that NGO Ads not be Simplistic and Wrong?

In the spirit of the holidays, let's ponder the strategy of using forlorn children and their bellies for fund-raising, which seems to intensify each year around this time.

I was introduced to, a new marketing effort of the Children’s Hunger Fund by a friend over Thanksgiving dinner. I was pulled in by the simple message “Skip something. Feed a child.”

To illustrate this, the site has a video of plates of gourmet steak and veggies being transported from a table at an upscale restaurant to starving children in another country – still on their pristine white plates, served by a smiling waitress. If this bore any relationship to what CHF actually did, Aid Watch could evaluate the number of children served, how their parents were involved, whether these children grew up to grow their own food, the effectiveness of serving children on white china, etc.

Of course, aid veterans, although not the general public, know that direct donor-to-child transfers never happen because of high transaction costs, so the ad is already misleading in a very well known way. But then we find out that the reality is that CHF is not even primarily a food distributor. According to their website, they do send “Food Paks” around the world to needy families, not just children. The photo of a Food Pak features an American diet, including saltine crackers and animal crackers, intended to feed entire families.

However, according to Fred Martin, Communications Director at CHF, “In fact our Food Pak program is a small portion of what we do. We highlight it because it is our flagship program that we’ve seen work very well in building relationships with the poor so that deeper needs can be uncovered and responded to.” I learned from Fred they also provide beds in eastern Europe and medicines in Asia, which are not identified on their website or their annual report to donors (only the totals of aid given by country or region). By reviewing their financials (IRS form 990), one sees of the extent of their non-food work: 85 percent of their donations are, in fact, medical supplies and medicines; they also collect and distribute toys, bicycles, beds and millions of dollars of clothing (a form of aid that NGO critics like Good Intentions are Not Enough is critical of).

I believe in helping people with supplies that make a difference, so, why do I sound like a Grinch? Because I believe in honesty in conveying what a charity really does. This ad seems to take us back to the simplistic and wildly inaccurate Sally Struthers “save a child” world, long since discredited. Can we please hang onto progress in aid transparency when we make some?

Read More & Discuss

Sarah Dadush addresses RED’s response to her paper

Sarah Dadush sent us this response to our Cui Bono? Post. It's gratifying that Red is willing to shed light on some of the transparency issues raised by my paper. This openness could help Red set a standard for other initiatives that resemble it. The Red model now creates many informational gaps, which extend far beyond the question of whether Bono and Shriver are making money from it.

It's not about whether to "do the (Red) thing" but about how to do it. We want to know more about whose interests our purchasing decisions are serving and in what proportion. We want to know what commercial arrangements cause the appearance of the Red logo on everything from T-shirts to strollers to laptops, and what the label represents socially.

Watchdogs, academics, journalists and blogs like this one make it their business to filter information on the public's behalf. Ensuring that regulators have access to this information is also important, because they supervise charitable activities. Hopefully this will help them to 'upgrade their choice' of regulatory tools, to use another Red slogan.

The fact that The Persuaders is required to donate its profits is reassuring though it also raises some questions: Why does the Global Fund indicate that The Persuaders is not a donor? And why not make this (positive) feature more obvious? Maybe it's because The Persuaders don't actually profit from the Red brand, so no money moves. Or maybe it's because The Persuaders would prefer to avoid regulation as a "commercial co-venturer", which would require additional disclosure.

With regard to regulating The Persuaders as a professional fundraiser, the definition of Professional Fundraiser in NY includes: "Any person who directly or indirectly by contract ... for compensation or other consideration (a) plans, manages, conducts, carries on, or assists in connection with a charitable solicitation ... ; (b) solicits on behalf of a charitable organization or any other person; or (c) who advertises that the purchase or use of goods, services, entertainment or any other thing of value will benefit a charitable organization but is not a commercial co-venturer.” The Persuaders solicits and assists in the solicitation of funds from the public through Bono and Shriver-led public outreach on T.V. shows like Oprah, and at concerts, as well as through traditional fundraising events like the Sotheby's art auction. They also engage consumers directly: when consumers buy a Red Gap T-shirt, they're buying it because it's Red, not just because it's Gap (that's the point of Red, after all). And The Persuaders are the ones coordinating the Red donation machine, which has generated over $100 million in contributions from the corporate partners. They clearly carry out these activities on behalf of the Global Fund (their only charity partner), and advertise that buying Red will benefit that charity.

These activities affect the public's trust just as traditional fundraising models do, and should be regulated accordingly. And even though The Persuaders receive no financial compensation from the Global Fund, my paper argues that the licensing fees paid to The Persuaders amount to fundraiser fees, and that the Global Fund has essentially outsourced the payment of fundraiser fees to the corporate partners.

Extending charities' regulation to encompass the Red model is important. Otherwise, the door is open to charities to avoid regulation simply by having a third party pay their fundraisers!

Read More & Discuss

Cui Bono? The murky finances of Project (RED)™

Cui Bono is the ancient legal question of "Who Benefits" from an arrangement. A great paper by Sarah Dadush on Project RED at an NYU Conference last Friday, “The Privatization of Development Assistance,” says

though Red was established with the express purpose of generating charitable funds to “help eliminate AIDS in Africa,” the entity behind the campaign is not itself a charity. Instead, the entity that owns the Red label, and that enters into the licensing agreements with the {Corporate Partners} is a limited liability company, incorporated in Delaware, under the name The Persuaders.

The Red website says that the finances are like this:


But Dadush shows they are actually like this:


You can find The Persuaders LLC on the Red web site, but only in fine print for which you have to look hard.

The opacity of the Red finances is striking. As Dadush says, on the Red website, “the words 'accountability' and 'transparency' do appear fairly frequently, but the terms are attached to the Global Fund,” not to The Persuaders LLC or the Corporate Partners. The Persuaders LLC “discloses nothing about its earnings or the licensing fee structure that allows it to operate.”

We were able to find out through further digging that any profits made by the Persuaders will be transferred to the Global Fund, but this still tells us nothing about the salaries it pays out, and in general how high are its overhead costs.

The Persuaders LLC also “requires the contributions {to the Global Fund} made by the [Corporate] Partners to be disclosed in an aggregate, to-date figure,”which does NOT break out individual corporate contributions by year, a violation of the usual Global Fund “practice of itemizing contributions by donor and by year.”

Dadush wonders whether “consumers may make decisions based on mistaken and inflated assumptions of the beneficial impact of their purchases,” a risk possibly “aggravated by the powerful slogans and advertisements that communicate the potential of buying Red to “change the world.”

(This blog already got into trouble trying to figure out how the Starbucks RED card translated into donations for the Global Fund, drawing an angry response from Starbucks but no useful information.)

RED has a mixed message that may create confusion among consumers. On the one hand, slogans like “Buy Red. Save Lives” might be taken to mean that consumers are making a direct charitable contribution. But then RED says that the campaign is NOT a charity but a sustainable business model: “The company pays extra – the purchaser does not.” This lack of clarity contributes to the Byzantine structure shown above, in which the consumer never knows who is paying how much to whom.

Dadush concludes with a bottom line that sounded very persuasive to us:

[W]here the public’s philanthropic spirit is being leveraged, opacity in charitable activities risks jeopardizing nonprofits’ most important asset: trust.

Our constructive suggestion: voluntarily open all the Red books, including donations by year by corporate partner, and the books of The Persuaders LLC.

We asked the Red campaign for a response on these issues. It was reassuring that we got a prompt response. CEO Susan Smith Ellis wrote:

To the question about whether or not our founders receive profits from (RED) -  (RED)™ is owned by the Persuaders, LLC, a company founded by Bono and Bobby Shriver.  Any profits earned by The Persuaders, LLC are required by the organization’s charter documents to be paid directly to the Global Fund to fight AIDS, Tuberculosis and Malaria. Bono has never received compensation from The Persuaders, LLC.  When Bobby Shriver served as CEO and Chairman, he was compensated for fulfilling those duties.  He no longer serves in those capacities and does not receive any compensation from The Persuaders, LLC.

As for charitable solicitation registration as a "professional fund raiser," The Persuaders, LLC is not contracted by the Global Fund to solicit contributions and does not receive any compensation from the Fund and, therefore, does not fall under the N.Y. charitable solicitation registration requirements.

Mr. Shriver also admirably made himself available for a telephone interview, which amplified further these points. Ms. Smith Ellis's response addresses any concern whether Bono or Mr. Shriver might be personally profiting from Red, and gives Red's perspective on why The Persuaders is not technically required by law to disclose its finances. But it does not address our larger concerns regarding the opacity of the Red finances and the potential confusion this lack of transparency likely creates among Red consumers. So we say again: open the Red books!

Supermodel Gisele Bundchen with Masaai warrior Keseme Ole Parsapaet

Read More & Discuss

African leaders advise Bono on reform of U2

Bono_MandelaAn expert commission of African leaders today announced their plan for comprehensive reform of music band U2. Saying that U2’s rock had lost touch with its African roots, the commission called for urgent measures to halt U2’s slide towards impending crisis.

“Our youth today are imperiled by low quality music,” said Commission chairman Nelson Mandela. “We will be lending African musicians to U2 to try to refurbish their sound to satisfy the urgent and growing needs for diversionary entertainment at a time of crisis in the global music and financial sectors.”

Concerns about U2 have been growing in Africa for a while. One Western aid blogger testified to the Commission that his teenage kids found U2’s music “cheesy.” The Mandela Commission proposed that U2 follow a series of steps to recover its Edge:

1) Hire African consultants to analyze U2’s “poverty of music trap”

2) Prepare a Band-owned and Commission-approved Comprehensive U2 Reform Strategy Design (CURSD)

3) Undertake a rehabilitation tour of African capitals to field-test and ground-truth proposed reforms

4) Subject all songs to randomized experiments in which the effect on wellbeing of control and treatment groups is rigorously assessed.

Mandela expressed optimism that the Commission’s report and proposed reforms had come in time to stave off terminal crisis in U2, and restore its effectiveness in the 80s arena rock field.

Read More & Discuss

Celebrities finally swamp advocacy market -- an application of economic theory

After a string of deadly serious blogs on random variables and statistical evidence, industrial policy, the history of development thought, and Afghanistan issues, I think I’ve earned a break to do another (hopefully the last) in our popular series on celebrity advocacy. To keep a bit of seriousness, though, I’m going to propose a theory of international trade between Africa and celebrities. Africa exports stereotypical images of misery in return for celebrities’ advocacy for more Africa funds. The theory of trade says that trade only happens when both parties gain. Celebrities gain some combination of altruistic satisfaction, a good PR image, and a boost for their acting or singing career. Africa gains aid funds.

If there is still any doubt about the Africa stereotype thing, the awesome blog Wronging Rights removed it yesterday by awarding its “headline of the week” to the Independent (Ireland) for the headline "We can't abandon Africa to cannibalism and genocide."

(Thinking of the stereotypes associated with my birth-state, this headline made me imagine a domestic counterpart: “We can’t abandon West Virginia to feuds and incest.”)

As always, things are more complicated than the simplistic theory above. The stereotypes are usually from NGOs, official aid agencies, and journalists outside of Africa, while some of the funds for “Africa” may get eaten up by these same intermediaries – NGOs, the UN, etc. So some proceeds of Africa's exports of misery images gets captured by outsiders, the same as with some of Africa's other exports.

Celebrity benefits, in contrast, do usually go directly to the celebrities. I am sure Bono has noble intentions, but his high international profile as Savior of Africa has not exactly been catastrophic for U2 revenues.

And for a wee bit of anecdotal evidence that celebrity advocacy is bad advocacy, U2 and Amnesty International are teaming up on a concert tour and Demand Dignity campaign in which they are peddling the dubious notion that poverty is best addressed as a human rights violation.

OK getting back to economics, what is the current state of supply and demand for celebrity advocacy? We teach our Econ 101 students that the market price is simultaneously equal to the cost of the last unit produced by the suppliers and the benefit of the last unit consumed by the demanders. A lot of supply drives down the price such that the additional benefit to the demanders is very low.

Supply keeps growing as new celebrities keep entering the sector. 17-year-old Disney Channel star Selena Gomez just visited Ghana for UNICEF as its newest ambassador (I would have missed this except for a tip-off from my 13-year-old). See the mercifully short 32 second video.

The current celebrity advocacy market indeed seems to have abundant supply. At least that was the impression I got from a web site announcing an Oscar-like Awards show for Celebrity Humanitarians. The celebrities being honored including some that I’d never heard of, like Brett Ratner. Even after I looked him up on the Internet, I still can’t remember what he is not famous for. So with the upcoming Noble Humanitarian Awards at which Brett is a headliner, the celebrities are barely trading above the price of used books at this point.

So maybe celebrity advocacy has finally saturated the market, and we could now give advocacy back to people who know something about their causes.

And I think my making fun of celebrity advocates has also saturated my blog market.

I’ll stop if they will.

Read More & Discuss