Thanks, this is helpful (though as you predict not by itself not enough to resolve the issue). Fundraising seems a good reference class—not too broad (like ‘all businesses’ would be) and not too narrow. One comment/question, at least for now:
The activity that GWWC is engaging in is not fundraising for itself, but encouraging people to give (and give effectively). Compared to charities fundraising for themselves, there is less competition, and the approach is also more novel: both of these could support more of the low-hanging fruit still being available. Moreover it may be easier to persuade people to give when there is no obvious conflict-of-interest of the charity receiving funds being the same as the people trying to persuade you.
This seems the main reason that could account for your fundraising being so much more profitable than normal. The lack of conflict of interest could help, and I’ve read Charity Science use the same argument somewhere. But it has very limited strength, there are many independent people who fundraise for charities they’re passionate about, and it’s hard to see why it’d drive up fundraising profitability that much. That would take a novel approach in an enviroment of low hanging fruit (because low competetition). What exactly is GWWC’s approach of this sort? I’m still not clear what you will do with the staff time our money buys to churn out a hundred dollars per dollar.
First is the focus on effective giving. This makes the case for giving much stronger, to those who are convinced by the arguments. Your giving is really saving lives.
Related, the case is supported by analytical arguments, which really appeals to a certain type of person, who often isn’t engaged by existing charity.
Second is the size of the ask. Most charity fundraising focuses on small donations. GWWC focuses on a 10% lifetime pledge. This is much harder to get, but results in much more money. It seems like the extra difficultly doesn’t fully offset the extra money (at least when combined with the first point).
Now GWWC also has the advantages of a strong community, lots of experience, credibility, a large audience etc. which make it easier and easier to get more pledges on the margin.
Another way that Giving What We Can can beat normal fundraisers and faces little competition is this:
The vast majority of fundraising is done by organisations raising money for themselves. And it’s very rare someone will be willing to make a lifetime commitment to a specific organisation, because they want to stay flexible in where they donate.
As a result, for most fundraising organisations there’s no sense in them pushing for such a major long-term commitment. It won’t work. They could in theory ask for a lifetime commitment to any organisation, not just themselves, but in addition to being very weird, that doesn’t help them achieve their fundraising goals when people move on to other groups.
So one reason this approach is very neglected, is it’s only sensible for those who are fundraising for other groups, or a very general cause like ‘the common good’. And that’s a very niche and little explored approach.
A possible exception is churches/temples/mosques which people expect to be involved with for their entire life, but then they did have tithing and collected enormous sums that way.
One thing to bear in mind is that there will naturally be quite a bit of variance in fundraising ratios. There was a factor-of-20 difference between median returns from standard methods, and I’m sure quite a bit of variance for each method according to implementation. I think the GWWC team is quite talented and it would be hard for an arbitrary charity to duplicate it at the same salaries, which might make you think they’d be in the positive tail for the method chosen.
However, I think you’re right that “no conflict-of-interest” probably doesn’t carry you so far by itself.
I think the main new thing that GWWC has been doing is asking people to donate a large amount on an ongoing basis. Compared to normal ongoing giving which might be £5/month for five years, the GWWC pledge may be two or three orders of magnitude larger. The question is how much lower the rate of getting people is. My prior uncertainty on this would be extremely large—it’s obvious that it will be lower, but unclear whether just a bit or 6+ orders of magnitude.
I think the big ask means people thinking seriously about their lives, rather than making an in-the-moment decision (as I think most charitable donations are). I think it’s also much less plausible for individual charities to get this commitment from people than a general encouragement to give more—this is the proper force of my previous “no conflict-of-interest” point, but it’s broader than that because the GWWC pledge also doesn’t involve binding your future judgements about which charities actually are best.
Now, I’m not sure this is entirely new. People have tried to persuade others to be generous before. But it’s plausible that such efforts have in fact always been very effective. Because of a lack of data, and because no individual charity could scale this up to get large income for themselves, it’s not clear that the market would have been saturated even if it always were a great activity.
Thanks, this is helpful (though as you predict not by itself not enough to resolve the issue). Fundraising seems a good reference class—not too broad (like ‘all businesses’ would be) and not too narrow. One comment/question, at least for now:
This seems the main reason that could account for your fundraising being so much more profitable than normal. The lack of conflict of interest could help, and I’ve read Charity Science use the same argument somewhere. But it has very limited strength, there are many independent people who fundraise for charities they’re passionate about, and it’s hard to see why it’d drive up fundraising profitability that much. That would take a novel approach in an enviroment of low hanging fruit (because low competetition). What exactly is GWWC’s approach of this sort? I’m still not clear what you will do with the staff time our money buys to churn out a hundred dollars per dollar.
There’s a couple of new bits.
First is the focus on effective giving. This makes the case for giving much stronger, to those who are convinced by the arguments. Your giving is really saving lives.
Related, the case is supported by analytical arguments, which really appeals to a certain type of person, who often isn’t engaged by existing charity.
Second is the size of the ask. Most charity fundraising focuses on small donations. GWWC focuses on a 10% lifetime pledge. This is much harder to get, but results in much more money. It seems like the extra difficultly doesn’t fully offset the extra money (at least when combined with the first point).
Now GWWC also has the advantages of a strong community, lots of experience, credibility, a large audience etc. which make it easier and easier to get more pledges on the margin.
Another way that Giving What We Can can beat normal fundraisers and faces little competition is this:
The vast majority of fundraising is done by organisations raising money for themselves. And it’s very rare someone will be willing to make a lifetime commitment to a specific organisation, because they want to stay flexible in where they donate.
As a result, for most fundraising organisations there’s no sense in them pushing for such a major long-term commitment. It won’t work. They could in theory ask for a lifetime commitment to any organisation, not just themselves, but in addition to being very weird, that doesn’t help them achieve their fundraising goals when people move on to other groups.
So one reason this approach is very neglected, is it’s only sensible for those who are fundraising for other groups, or a very general cause like ‘the common good’. And that’s a very niche and little explored approach.
A possible exception is churches/temples/mosques which people expect to be involved with for their entire life, but then they did have tithing and collected enormous sums that way.
One thing to bear in mind is that there will naturally be quite a bit of variance in fundraising ratios. There was a factor-of-20 difference between median returns from standard methods, and I’m sure quite a bit of variance for each method according to implementation. I think the GWWC team is quite talented and it would be hard for an arbitrary charity to duplicate it at the same salaries, which might make you think they’d be in the positive tail for the method chosen.
However, I think you’re right that “no conflict-of-interest” probably doesn’t carry you so far by itself.
I think the main new thing that GWWC has been doing is asking people to donate a large amount on an ongoing basis. Compared to normal ongoing giving which might be £5/month for five years, the GWWC pledge may be two or three orders of magnitude larger. The question is how much lower the rate of getting people is. My prior uncertainty on this would be extremely large—it’s obvious that it will be lower, but unclear whether just a bit or 6+ orders of magnitude.
I think the big ask means people thinking seriously about their lives, rather than making an in-the-moment decision (as I think most charitable donations are). I think it’s also much less plausible for individual charities to get this commitment from people than a general encouragement to give more—this is the proper force of my previous “no conflict-of-interest” point, but it’s broader than that because the GWWC pledge also doesn’t involve binding your future judgements about which charities actually are best.
Now, I’m not sure this is entirely new. People have tried to persuade others to be generous before. But it’s plausible that such efforts have in fact always been very effective. Because of a lack of data, and because no individual charity could scale this up to get large income for themselves, it’s not clear that the market would have been saturated even if it always were a great activity.
Note: Ben’s answer is better (more comprehensive and more to the point) than mine.