The famous baseball statistics movie “Moneyball” has actually managed to influence a movement in charity. In a common emerging theme pushing for smarter giving, moneyball philanthropy suggests that solid, hard data should be used in order to determine whether a charity makes worthwhile use of the money. Led by Laura and John Arnold, the tactics for moneyball philanthropy are described as a high-risk, high-reward venture. Similar thoughts have been touted by the Bill and Melinda Gates Foundation and philanthropy professor Laura Andressen.
When the Arnolds decided to give most of their fortune away, they quickly become frustrated at the lack of transparency in charitable organizations. Many donors give money to local hospitals or schools because they know it will make a difference in their communities. Instead, John Arnold, who was a wildly successful hedge fund manager, decided to look for high leverage opportunities. Currently, his organization is funding the most expensive, extensive research on obesity imaginable, after creating a team of the biggest and brightest experts in nutrition. This is where moneyball principles come in: creating the widest impact per dollar possible. The foundation also hired a former New Jersey Attorney General to tackle the criminal justice system. They also have people working on public education and government efficiency.
So what can a normal donor learn from the moneyball tactics of John Arnold? First, do not give to causes on impulse. If you do not know where they money is going than it doesn’t make any sense to give it away. You can also check to see if the charity is rated on Charity Navigator. Also, pay attention to what numbers are saying. If an educational institution lists how many students it trains but not how many get jobs afterward, that may be a question to ask. Look at projects and make sure the charity has a long term vision and goal that seems concrete.