Effektiv Spenden—Review of the Year 2021
It has been a good year.
In 2021, Effektiv Spenden was able to raise a total of 18.86 million euros from more than 9,000 donors for some of the most effective charities in the world. This represents a growth of over 560% compared to the previous year (2.84 million euros), once again exceeding all our expectations.
56% of the donations went to development aid organizations, 22% to climate change organizations, 19% to animal welfare organizations, and 3% to organizations seeking to reduce existential risk or invest in the Effective Altruism community.
Four reasons were particularly decisive for this, in our view, extremely positive development:
1. Attracting major donors
58% of our donation volume in 2021 came from people who donated 100,000 euros or more (2020: 21%). In cooperation with our partner legacies.now as well as other philanthropic advisors, we were able to respond to individual needs—sometimes at very short notice—without having to compromise on the effectiveness of the charities we recommended.
2. Effektiv Spenden Switzerland
We set up a non-profit in Switzerland in 2021 and met a high level of interest there from day one, thanks in part to the support of the Effective Altruism Foundation. Particularly through major donors, this has led to donations from Switzerland accounting for 48% of our total donation volume last year.
3. Press relations
In 2021, wide-reaching media once again reported on us and the idea of effective giving. In addition to radio appearances on Deutschlandfunk or Bayerischer Rundfunk, we were also briefly the lead story on Spiegel Online, Germany’s largest news site outside the tabloids, in December.
4. Growth of Effective Altruism
The language barrier continues to prevent excellent English-language contributions from the Effective Altruism community (e.g., The Precipice, 80,000 Hours podcasts and articles, etc.) from reaching a wider audience in German-speaking countries. Nevertheless, we have benefited from the general growth of the EA community. To find out what percentage of our donors are familiar with Effective Altruism, we regularly conduct surveys, with the following results: about 24% said they were well versed in Effective Altruism. 47% said they were somewhat familiar, and 29% had not previously heard of Effective Altruism. However, among major donors the proportion of people already very familiar with Effective Altruism was smaller.
In addition to raise money for effective charities, we opened TEAMWORK in May 2021, a coworking space by and for the EA community. Despite the constraints of the Covid 19 pandemic, we were thus able to offer people from more than 20 EA-aligned organizations an opportunity to (net)work.
With an average of less than 2 full-time employees in 2021, we were able to keep our costs very low despite the rapid growth of the platform. Excluding the start-up costs for setting up and operating the TEAMWORK Office and additional flow-through costs, these amounted to approximately 175,000 euros according to preliminary calculations. Putting this in relation to the volume of donations we raised results in a multiplier of 107, i.e. for every euro we needed to operate the platform, we were able to generate 107 euros for the charities we recommended.
One reason for the relatively low costs is also that we were able to switch from an external donor management system that had become increasingly more expensive and inflexible for our needs to a customized solution of our own. This was only possible thanks to the initiative of Patrick Gruban, who, as a volunteer, designed and programmed a customized system within a few months. With this we were able to process several million euros and francs in December 2021 alone.
If you use models to calculate the counterfactual donation volume generated by us, such as this one from the Effective Altruism Foundation or this one from RC Forward, you arrive at values in the (large) range between 1.8 million euros and 15.9 million euros, which would correspond to a multiplier between 11 and 91. Even under extremely conservative assumptions, Effektiv Spenden has thus mobilized at least 10 times its own costs in effective donations.
Despite the remarkable development of the past year we so far cover only approx. 0,1% of the German-Swiss donation market. However, we see the potential for Effektiv Spenden at at least 3%, i.e. a factor of 30 higher than we are currently exploiting. There is therefore no reason to rest on our current achievements. This year, the focus will again be on donations from Germany and Switzerland. In addition, we are currently exploring with international partners whether and how we can also make our offer accessible in countries such as Austria, the Czech Republic, France or Italy.
For all this, but also to put the existing organization on a more sustainable and solid footing, we need to invest significantly more than in the past. We have already started to do this and have grown to more than 4 full-time employees as of May 2022. In the short term, this will lead to a decrease in the multiplier listed above. However, we will gladly accept this if it means we succeed in significantly increasing the counterfactual donation volume in absolute figures for particularly effective organizations. After all, it is the absolute figures that determine how many people escape the consequences of extreme poverty, how many animals are freed from factory farming, how many CO2 emissions are prevented and what other potentially existential risks can be significantly reduced.
During the first year we have already had representatives from Centre for Effective Altruism, Founders Pledge, OpenAI, High Impact Athletes, Charity Entrepreneurship, Family Empowerment Media, High Impact Professionals, Momentum, Altruisme Efficace France, Czech Association for Effective Altruism, Effective Altruism the Netherlands, Training for Good, Spark Wave, Future Matters Project, Fish Welfare Initiative, Effective Altruism and Consulting Network, Effective Altruism Belgium, Effective Altruism Kyiv, GiveDirectly, Allfed, One for the World, Animal Charity Evaluators, Legal Priorities Project, WirklichGut, NEAD und Future Cleantech Architects work with at TEAMWORK.
These preliminary figures were calculated on a cash flow basis and will therefore differ from those in the official financial statements. If we add the costs for the part of the TEAMWORK office that we do not use (e.g. telephone booths, rent, furniture… ) and additional flow-through costs, the same calculation brings the total expenditures to 230,000 euros, which corresponds to a multiplier of 82.