What do hedge funds and nonprofit organizations have in common? They can both benefit from in-depth analysis. Although it may sound unusual for an Ivy League graduate to leave a position as an analyst at a $125 billion hedge fund and use his analytical skills to help charities, it happened not once but twice.


A Bloomberg Businessweek article covered the career switch made by Harvard grad Holden Karnofsky and Columbia grad Elie Hassenfeld. The two were analysts at Bridgewater Associates when they decided to start a new nonprofit organization, GiveWell.


At GiveWell, the two take their analytical skills and use it to evaluate the worthiness of charities based on five different criteria: evidence of effectiveness, cost-effectiveness, need for funding, transparency, and self-monitoring. According to the Bloomberg Businessweek article, only two percent of charities reviewed actually receive a recommend rating.


“Though the two now make salaries that are less than half what they earned at Bridgewater, donations to charities they recommend, such as Village Reach and Against Malaria Foundation, have more than tripled in the last year, totaling $1,606,274. Next, they are launching a project called GiveWell Labs, targeting high-net-worth donors. Hassenfeld says they hope to ultimately “change the rules of the game.”  Source: Bloomberg Businessweek


The GiveWell website explains why it is more likely to recommend international charities over domestic-based organizations and the explanation is really quite simple, “your dollar goes further overseas.” GiveWell’s top-rated charity, Against Malaria Foundation (AMF), can save a life with just $2,000. This $2,000 is all-encompassing and includes transportation and administration costs.


For more information about Hassenfeld and Karnofsky’s organization or to find out how you can help, visit the GiveWell website.

Former hedge fund analysts switch their focus to charities
Two Ivy League grads ditched their cushy careers to focus on more important issues.