Could you explain your first sentence? What risks are you talking about?
Probably the risks of moving down the diminishing returns curve. E.g. if Good Ventures put its entire endowment into a donor lottery (e.g. run by BMGF) for a 1⁄5 chance of 5x endowment diminishing returns would mean that returns to charitable dollars would be substantially higher in the worlds where they lost than when they won. If they put 1% of their endowment into such a lottery this effect would be almost imperceptibly small but nonzero. Similar issues arise for the guarantor.
With pots that are small relative to the overall field or the guarantor’s budget (or the field of donors the guarantor considers good substitutes) these costs are tiny but for very big pots they become less negligible.
Also, how does one lottery up further if all the block sizes are $100k?
Take your 100k and ask Paul (or CEA, to get in touch with another backstopping donor) for a personalized lottery. If very large it might involve some haircut for Paul. A donor with more resources could backstop a larger amount without haircut. If there is recurrent demand for this (probably after donor lotteries become more popular) then standardized arrangements for that would likely be set up (I would try to do so, at least).
Probably the risks of moving down the diminishing returns curve. E.g. if Good Ventures put its entire endowment into a donor lottery (e.g. run by BMGF) for a 1⁄5 chance of 5x endowment diminishing returns would mean that returns to charitable dollars would be substantially higher in the worlds where they lost than when they won. If they put 1% of their endowment into such a lottery this effect would be almost imperceptibly small but nonzero. Similar issues arise for the guarantor.
With pots that are small relative to the overall field or the guarantor’s budget (or the field of donors the guarantor considers good substitutes) these costs are tiny but for very big pots they become less negligible.
Take your 100k and ask Paul (or CEA, to get in touch with another backstopping donor) for a personalized lottery. If very large it might involve some haircut for Paul. A donor with more resources could backstop a larger amount without haircut. If there is recurrent demand for this (probably after donor lotteries become more popular) then standardized arrangements for that would likely be set up (I would try to do so, at least).