#207 – Why she shut down her charity, and why more founders should follow her lead (Sarah Eustis-Guthrie on The 80,000 Hours Podcast)

By 80000_Hours @ 2024-11-15T12:55 (+34)

We just published an interview: Sarah Eustis-Guthrie on why she shut down her charity, and why more founders should follow her lead. Listen on Spotify, watch on Youtube, or click through for other audio options, the transcript, and related links. Below are the episode summary and some key excerpts.

Episode summary

In today’s episode, host Luisa Rodriguez speaks to Sarah Eustis-Guthrie — cofounder of the now-shut-down Maternal Health Initiative, a postpartum family planning nonprofit in Ghana — about her experience starting and running MHI, and ultimately making the difficult decision to shut down when the programme wasn’t as impactful as they expected.

They cover:

• The evidence that made Sarah and her cofounder Ben think their organisation could be super impactful for women — both from a health perspective and an autonomy and wellbeing perspective.
• Early yellow and red flags that maybe they didn’t have the full story about the effectiveness of the intervention.
• All the steps Sarah and Ben took to build the organisation — and where things went wrong in retrospect.
• Dealing with the emotional side of putting so much time and effort into a project that ultimately failed.
• Why it’s so important to talk openly about things that don’t work out, and Sarah’s key lessons learned from the experience.
• The misaligned incentives that discourage charities from shutting down ineffective programmes.
• The movement of trust-based philanthropy, and Sarah’s ideas to further improve how global development charities get their funding and prioritise their beneficiaries over their operations.
• The pros and cons of exploring and pivoting in careers.
• What it’s like to participate in the Charity Entrepreneurship Incubation Program, and how listeners can assess if they might be a good fit.
• And plenty more.

Producer: Keiran Harris
Audio engineering: Ben Cordell, Milo McGuire, Simon Monsour, and Dominic Armstrong
Content editing: Luisa Rodriguez, Katy Moore, and Keiran Harris
Transcriptions: Katy Moore

Highlights

What it's like to found a charity

Luisa Rodriguez: So what happens next? How do you go from deciding to found a charity in Ghana to actually implementing a working programme?

Sarah Eustis-Guthrie: That’s exactly the question I was asking myself two years ago! It was pretty daunting to be in this space of, I’ve now got a bunch of money and I now get to start this organisation. Also have to start this organisation.

I think one thing I loved about my cofounder, Ben, is he’s just one of the most entrepreneurial people I’ve ever met. And so when he was faced with that question, he was like, “Cool, we’ll figure it out. All we have to do is ask people who’ve done it before, think in a big-picture way, what do you have to do? And we’ll just go from there.” Meanwhile, I’m sitting there being like, “How did I get into this situation? This is terrifying!”

Luisa Rodriguez: Yeah, yeah.

Sarah Eustis-Guthrie: But we figured it out, and I do think he was genuinely right: that a lot of it is more simple than you might think it is. So if you just sit down and think, how would you start a health organisation? Well, I’m going to have to get permissions from the government. I’m going to have to figure out where I want to work. There’s a lot of really concrete questions there.

So we reached out to a bunch of potential partners. These are local nonprofits that had implemented similar programmes in the past. And once we had these partners, we were tasked with figuring out exactly what the programme should actually look like. Because going from “we want to run postpartum family planning” to building an actual programme has a lot of questions. When you look at the studies, you’ll find that postpartum family planning can look like infinitely different iterations.

And one thing that we realised is that because we wanted to devise our programming based on the evidence base, based on the studies, what we found is that studies tend to be very good at telling you the numbers about how the programme did or did not work out, but they often don’t have a lot of details in terms of what was actually in the programme. So we found that we were lucky if it would say things like, the providers were trained for one day versus one month, and then extremely lucky if they would say anything about what the providers were even trained in.

So this process involved a lot of desk research, it involved a lot of talking to experts. We would email someone and say, “We’re implementing this programme. Can you talk to us and tell us what exactly it was that you did?”

And I found myself feeling quite insecure throughout this process. I had this perennial fear that I would email people and they would say, “Who are you to found this programme? You don’t know what you’re talking about!”

Luisa Rodriguez: Totally. Yeah, I would feel the same way.

Sarah Eustis-Guthrie: Yeah. It got a bit better as time went on. I do think this was something that we struggled with, and maybe was a bit of a mistake, that we kind of perennially felt so insecure that it made us afraid to ask silly questions.

Yellow flags and difficult calls

Sarah Eustis-Guthrie: One interesting, kind of funny thing that happened is we ended up going on a trip to Ghana even before we decided on it as a country, because there was another family planning charity that was going on a trip. This was actually only a couple weeks after the Charity Entrepreneurship programme had ended, but they said, “Hey, we’re going to Ghana. We know you’re considering it. You want to just tag along?” So we thought, let’s tag along.

So we went on this trip, we went to some hospitals, we spoke to some experts — and we both got kind of a bad gut feeling from the trip, if that makes any sense. It’s a bit hard to pin down, but I think some of it is that we were struck by how high the baseline level of family planning access was. And to be clear, we were mostly in the capital, Accra. So that’s going to be very different from other regions of the country. But you’re just walking around, you see a billboard for family planning. Or I did this thing where I went into a bunch of different pharmacies and I asked if I could get family planning, which was a slightly awkward experience, but really interesting.

So that was in September. And then as we worked on the geographic analysis, we realised there’s actually really strong fundamental reasons to do it. Also, as people who are evidence based, we don’t want to over-update on gut feelings.

And honestly, even now I don’t really know what to do with this. I think we actually made a pretty reasonable call in still going with it, because one thing we found later, and you can see has a kind of obvious truth, is that there’s so much variation within countries. So later on, when we’d go to more rural regions, it’s like you’re in a totally different country in terms of the access. And our programme was mainly working in the northern parts of the country where the situation is totally different.

But still, in retrospect, it does make me feel a little silly to say that we had this bad gut feeling, and then in some senses, that bad gut feeling panned out.

And in fact, and I am almost a little embarrassed to say this, but what ended up happening is that we had so many doubts — the ones I mentioned, but also a number of other ones — that we sat down in that fall and we said, “Is this still a good idea? Should we still do this project?” I think we felt a lot of feelings about this, because people had been so excited about it, we’d been so excited about it — but we were starting to say, “Are we kind of in over our head? Is this less promising than we thought?”

So we sat down and did some desk research, we talked to some experts, and ultimately we said that we think that there’s still a decent chance that this is a phenomenal opportunity, and we think that we just can’t resolve these uncertainties until we actually run a programme on the ground. So let’s go run a programme on the ground, and in a year we’ll circle back and we’ll see, were we right about these uncertainties? We thought that there was a decent chance that we would say, “We were totally wrong, and this is actually phenomenal,” and then some chance that maybe we’d look back and say, “We’re fools! We should have shut down back then.” And some chance we’ll be somewhere in the middle.

And so we ended up saying that we have these concerns, but we’re going to set them aside. We’re really going to commit to running this programme.

Disappointing results

Sarah Eustis-Guthrie: So overall, we’ve felt that those results from postnatal care were a disappointment, because they showed that there were real challenges in implementation. There were real challenges despite us going to a lot of effort to try and make sure that things happen. And then also the results on the effects were, at the very least, mixed.

Luisa Rodriguez: How did this feel?

Sarah Eustis-Guthrie: Not great. I remember it was around Thanksgiving, and I was visiting my family, and I remember I was sitting and parsing the results — because it’s not like just a number pops up; you have to do some amount of analysis. I was seeing these numbers, and I was just scrolling through the surveys, and they’d be like, “Not using, not using…” And I just felt terrible.

Luisa Rodriguez: Gut wrenching. It must have just felt really awful.

Sarah Eustis-Guthrie: I think part of it is that when you run an organisation, you feel very personally responsible for what’s happening with that organisation. I think this felt extra strong for us because not only had we decided to found this organisation, but we decided to found this organisation as opposed to other organisations that could have been really good. So that was my cofounder and I kind of staking our claim for like, “We think that this is good. We think that this is so good that we want you to give money that you otherwise could give to these other really compelling organisations.”

And then not only that, but I’m good friends with a lot of other folks in the Charity Entrepreneurship community — which is great, they’re an awesome group of people — but what that means is that sometimes I’ll be chatting with someone, and in the nicest possible way, it’s like their programme’s going phenomenally, they’re helping so many people, they’re getting this huge grant. And even though I think people make an effort to make it non-stressful and non-competitive, it’s such a warm community, it also just is inherently, you’re sitting there and you’re thinking, “Man, is it the intervention or is it me?” Yeah, not the best feeling ever.

The ups and downs of founding an organisation

Sarah Eustis-Guthrie: I think my overall experience with Charity Entrepreneurship, with founding an org, was that the benefits were a lot bigger than I’d expected and then the downsides were a lot bigger than I expected. I think I would go back and do it again, and I would recommend other people do it. But also I did not comprehend how big of a change in my life it would be.

And I don’t want to say that this happens for everyone, because I think people have very different experiences with it. But I think for me, that sense of responsibility, that sense of feeling like the results really reflected on me — which I don’t fully endorse as a take, and was something that I was trying to shift away from — I found really tough. Because it was just true that for some aspects of the programme, how well they went were a direct reflection of how good of a job I did — and sometimes I would make a mistake, and that would have bad effects in the world, and that was really stressful. And then some aspects of the programme had very little to do with how hard I was working or how smart I was about making a particular choice.

And I think that I found that to be immensely stressful, and I found it hard to turn off thinking about the organisation. I would try to do these things like, “I won’t check Slack after I stop work for the day” and that kind of thing. But what I found is I’d just be walking around in my life, and because this was the most interesting and felt like the most important thing coming up in my life, that’s what I would think about.

So yeah, I did have this experience of, I would wake up in the middle of the night to get a drink of water, and before I was even fully conscious I would find that I was thinking about the organisation, or I was thinking about some of these issues, and then it would be hard to fall back asleep. And I’ve talked to other people who say, “Yeah, I have that exact same experience.”

Luisa Rodriguez: Wow. Yeah. I’m trying to think of an analogy, and I’m finding it hard to. But it sounds closer to like having a child or something. Like you’re trying to create this thing, and there’s so much responsibility and personal ownership in a way that you just don’t have in most cases when you are employed by a place to do a thing, and the bottom line responsibility isn’t with you.

Sarah Eustis-Guthrie: Right. And I think there’s a lot of jobs where people have that sense of real responsibility. I do think that there are good aspects of this. I found it deeply satisfying and deeply fulfilling. I remember when I was thinking about applying to jobs before this, I was thinking, I want to have this feeling that if I’m working extra hard, that that’ll make more good things happen in the world. I don’t want to have this feeling of, I’m accruing additional profit to a corporation, or it doesn’t really matter that much how hard I work. But this is the flip side of that: when it matters how good of a job you do, it’s hard to let go of.

And also I do just think there is a big difference between being the person who’s running the organisation and being someone who has a really substantial role. Because ultimately so much of your job is making these really tough calls — tough calls that you could potentially invest infinite time into. So it’s really hard to know when did I make a good decision? When did I invest the correct amount of time into making a decision? There’s a lot that’s really tough.

And I think having a cofounder does make a big difference. There are some folks that solo found. I have so much respect for that. I could not have done that with MHI. But having a cofounder makes a big difference, because you can really share that burden.

And I also think having a community makes a big difference, where I would talk to other folks running orgs and say, “I found this thing immensely stressful, and I don’t know if I made the right call,” and they would say, “I felt the exact same way.” And then also having advisors who we could turn to. I think that helps take on some of that responsibility. That’s similar to having a manager, but I didn’t totally trust that our advisors would be telling us in the frankest possible way if we were totally messing up.

So it was hard. I felt like I had to carry that burden myself. I ended up doing a lot of second guessing myself, a lot of asking myself, “Am I messing up? Am I doing a good job?” And in retrospect, I wish I’d done more to try and offload that, but I think it’s fundamentally just a super tough challenge.

Entrepreneurship and being willing to make risky bets

Luisa Rodriguez: Did you have the sense that some of the Charity Entrepreneurship charities had shut down, and that there were “failures” to come out of the incubation programme, and that that was a possible outcome?

Sarah Eustis-Guthrie: Yeah. So there have been organisations that have shut down. And since we shut down, another organisation from our cohort actually also shut down. But before we had shut down, it was generally because things had gone wrong quite early on, and there wasn’t a clear-cut example of someone saying, “This just doesn’t work as well as we’d hoped, and so we’re going to shut down and just leave it at that.”

I do think the folks at Charity Entrepreneurship wanted this to be more of a thing, because I think they do have this genuine bets-based mindset. I don’t want to put words in their mouth, but my sense of it is that the ideal is you start a bunch of charities, they test stuff out, and then some of them turn out to be phenomenally effective, and you want to scale those up as fast as possible; some of them turn out to not work out at all, and you want to shut those down as quickly as possible; and then there’s a lot of disagreement about what you do in the middle cases. So some people would say, if it’s not going to be the most effective thing, then you should shut it down. Some people would say it depends on where you get your funding from.

But I think one of the reasons I took this so hard is because entrepreneurship is all about this bets-based mindset. So you say, “I’m going to take a bunch of bets. I’m going to take some risky bets that have really high upside.” And this is a winning strategy in life, but maybe it’s not a winning strategy for any given hand. So the fact of the matter is that I believe that intellectually, but l do not believe that emotionally.

And I have now met a bunch of people who are really good at doing that emotionally, and I’ve realised I’m just not one of those people. I think I’m more entrepreneurial than your average person; I don’t think I’m the maximally entrepreneurial person. And I also think it’s just human nature to not like failing.

Luisa Rodriguez: Yeah, it feels like it’s one of these cases where the optimal thing might be to have a bunch of people make these bets, and have some massively pay off and some not pay off and fail. And on the whole, that’s a great strategy. And everyone participating should get some credit for the wins, because they’re participating in the system that overall has this really valuable high payoff strategy.

But individually, the people who make the really successful charities with high cost effectiveness get to feel that win very viscerally, and the people who don’t feel like they’ve lost, despite it being a thing that was maybe the best thing for the world. And it just feels incredibly unfair and really difficult and painful. And yeah, I’m both grateful to you for participating. I’m also not quite outraged, but I do feel indignant that there are cases where this strategy is optimal and people have to…

I mean, I think it is really applicable for careers, and the thing 80,000 Hours is about: we’re telling a bunch of people to be really ambitious with their careers. And it does make me feel really pained that, for some, despite it being the optimal thing that they took a really big career bet, they will feel like they failed. But that’s still part of the portfolio we want to have.

So just a massive thank you, and well done. But obviously it felt really painful.

Why aren't more charities shutting down?

Luisa Rodriguez: It strikes me that charities seem to scale back or shut down at potentially a much lower rate than businesses — and that seems bad. It seems like businesses have some incentives that don’t always lead to incredible outcomes, but they are probably tracking something like whether they provide value. And if charities aren’t shutting down nearly as often, that might suggest something about too many existing that aren’t providing much value. Does that seem true to you?

Sarah Eustis-Guthrie: I think you’re pointing to the most important factor here, which is that structurally charities are built in such a way that your expectation on priors would be that a lot of them would just be doing stuff that’s not very useful. Because the difference in the way a business works is, at least in an ideal case, a business provides a product or a service to their consumers. If that product or service isn’t very good, then unless there’s a monopoly or something wonky going on, consumers stop purchasing that product and that business goes out of business.

But what happens is that instead of it being dual when it comes to charities, it’s actually this triangle: one point you have the charity, one point you have its beneficiaries, but then on another point you have the donor. And in some ways, the donor ends up having most of the power — because if the donor is the one that’s giving the money to make this programme happen, and you’re the charity, and you’re looking at your beneficiaries and you’re looking at your donor, you’re saying, “If the donor doesn’t like what we’re doing, the programme can’t happen. But if the beneficiaries don’t like what’s going on, as long as the donor keeps liking this, this can keep happening.”

And to be clear, I’m not saying that charity founders are sitting there saying, “Bwahahaha, I’m going to do bad things for my beneficiaries.” I think nearly all charity founders are really well intentioned and are trying to make the world better. But you end up in this structural space where you are structurally incentivised to make your donors as happy as possible — and then you’re only really incentivised to make sure you’re helping the beneficiaries insofar as the donor cares about it.

So maybe the donor wants to see photos of happy-seeming beneficiaries; maybe they want to see studies of this programme is really effective; maybe they want to see ongoing monitoring and evaluation data — but depending on what they demand, things could look very different on the ground. And of course, organisations can also demand these things, but in general, I think funders are often the ones who have the most leverage.

How to think about shutting down

Luisa Rodriguez: How realistic is it to think that nonprofits will shut down programmes with 30+ employees that don’t have that culture, or even entirely shut down their organisation?

Sarah Eustis-Guthrie: I absolutely agree with the premise that this is a tough challenge, and one that is not going to be solved in a day. I think that reframing it from shutting down to shifting programme focus areas, or shifting people from one programme to another programme, is a really helpful way of thinking about this.

One interesting example for this is New Incentives, which provides conditional cash transfers to help incentivise immunisations. You may have heard of New Incentives because right now it’s doing really well: it’s one of GiveWell’s top charities; it’s widely recommended.

But what you might not know is that when New Incentives originally started, they were doing a very different programme. Their founder was really excited about conditional cash transfers to help reduce poverty. She was originally focused on, I think, cash transfers to prevent mother-to-child HIV transmission. So she was working in Nigeria, and they were working in a bunch of clinics. And it was going decently, but they realised things looked different than they originally thought, and they were really not going to be able to scale up with this programme.

So they’d been operating for a couple of years, it had been going kind of well. I wasn’t involved at all, but my sense is they faced this fork in the road of: should we keep going with this programme that we think is decent, or should we try to pivot to something else? I can imagine them sitting in the room trying to figure it out, like, “Wow, this is a really tough decision. We have a lot of staff who might be affected. What’s going to happen?”

What they ended up saying is, “We are here to make a cost-effective, impactful charity and we want to focus on the most useful thing.” So they ended up pivoting to these cash transfers for immunisation. They ran an RCT, it turned out really well, and then they massively scaled. So they went from a small number of employees to I think they now have more than 3,000 employees in Nigeria.

Luisa Rodriguez: Holy crap! I did not know that.

Sarah Eustis-Guthrie: So pivoting is what allowed them to unlock their potential as an organisation.

Luisa Rodriguez: Nice.

Sarah Eustis-Guthrie: So I think that this is a lot about how we frame this conversation. Are we framing this as, “More people should do the painful and unpleasant thing of shutting down,” or do we frame this as, “More people should look at the exciting opportunities of pivoting their programmes to things that can help more people”?