Times: Givewell Scandal Part II

There is a talmudic principle of qal vehomer - reasoning from the light to the heavy. If something is the case in the light situation, let's say in the non-profit world, then it is certainly the case in the heavy situation, let's say the for profit world.

So here we go again watching the disintegration of two former heavies (clean-cut young Jewish Hedge Fund Guys) now making their generous "contributions" to the light-weight world of charities.

It's fair to assume that in the for profit world you will find a good deal of slimeball behavior and unethical practices. But really now. These fellows are aspiring to evaluate the worthiness of charities. Don't the evaluators have to be trustworthy? Suggestion for a motto: "Givewell - we lie and impersonate so that you will know whom to trust." Sure.

Nonprofit Punishes a 2nd Founder for Ruse
By STEPHANIE STROM

The board of GiveWell, a new nonprofit research organization that seeks to assess the effectiveness of charities, has disciplined the second of its two founders for promoting the organization by posing on the Internet as someone else.

The punishment comes only a week after the board acted against the other founder for engaging in a like deception.

In the latest move, the directors said in a statement posted Friday that Elie Hassenfeld had admitted using a false name online to steer people to the GiveWell site. They said they had fined Mr. Hassenfeld $5,000 but had decided to keep him on in his position as a program officer.

“We believe that Mr. Hassenfeld’s previous commitment to the goals of GiveWell demonstrates that he can continue to make a positive contribution to the work of the organization in the future,” the board said.

A week earlier, the board announced that Mr. Hassenfeld’s co-founder, Holden Karnofsky, had admitted posing online as a prospective charitable donor who sought information about where to contribute and then answering his own question by recommending GiveWell, without disclosing his affiliation with it.

Mr. Karnofsky was demoted from executive director to program officer, and $5,000 will be withheld from his $65,000-a-year salary to pay for a professional development course he will take. Mr. Hassenfeld will not be required to take the same course.

GiveWell has been attracting attention in the charity world for some time, in part because of Mr. Karnofsky’s pithy criticism of charities and foundations. The organization was a focus of articles on Dec. 20 in The New York Times and The Wall Street Journal, and its founders, both former hedge fund analysts, were featured that day on the CNBC program “Power Lunch.”

Mr. Karnofsky told the board on Dec. 31 about his failure to identify himself in various online forums. But Mr. Hassenfeld did not tell the board until last week about his use of his girlfriend’s name, also on Dec. 31, to answer a question — “Where should I donate?” — that had been posted by someone on mnspeak.com, a Minneapolis blog aggregator.

“Have you seen www.givewell.net?” Mr. Hassenfeld replied as Talia. “It’s a new Web site that tries to help donors answer that question by researching, evaluating and recommending the best charities. It was mentioned in The New York Times last week.”

Reached by phone on Monday, Mr. Hassenfeld said he could not comment.

It is unclear whether the online deception by GiveWell’s founders has had any impact on the organization, which thus far has been largely financed by its directors, several of them former colleagues of Mr. Hassenfeld and Mr. Karnofsky in the hedge fund industry.

Mr. Karnofsky said in mid-December that the Hewlett Foundation had expressed interest in putting money into the organization, and Eric Brown, a spokesman for Hewlett, said Monday that it continued to be interested.

“We’re going to wait and see,” Mr. Brown said, “but we think the concept has a lot of value.”