If itâs average future that still could justify a 1x bar, depending on what weâre averaging over.
I donât think it does. Itâs conceptually coherent for an organization to have a very high average cost-effectiveness while also having a marginal cost-effectiveness below 1x. For this reason, I donât think you should have a âbarâ for average cost-effectiveness. (You might be making the point that if the average cost-effectiveness is above 1, then you are better off making the grant than burning the money, and so it clears a bar in that sense, but itâs not clear itâs worth making the grant vs making a potentially much smaller grant, and so itâs not a helpful âbarâ in the sense the term is usually used.)
I agree with the concerns about uncertainty, displacing less-effective charities, and counterfactuality. But Iâd rather see attempts to adjust the estimate for that rather than ~âweâre saying 6x but not really, probably lower after considering thisâ. This will help avoid temptations towards soldier/âpromotion mentality, and make it more comparable to other estimates.
Sure, but these are hard to account for. I agree itâs better to adjust the model when itâs possible, but youâll still be left with a model that has a tonne of uncertainty.
(RE âopportunity cost of the labor of the employees who could otherwise do impactful work or eartn to give, etcââif EA people are putting in free labor into these efforts, that should also be factored into the cost estimates, naturally, not just the direct CG investment.)
Yep! I wasnât trying to suggest you shouldnât account for that.
I want to make sure weâre talking about the same thing here. Iâd be want to know the cost-effectiveness in terms âfor each $1 we spend to promote givingâ (via starting new orgs or doing more fundraising) âhow much do we raise in truly counterfactual donations to the most effective charitiesâ and Iâd want this to be net of any donations or effective work that might be crowded out.
E.g., suppose Joe lives in the USA and earns $100k per year. Without our spending Joe, would not give anything to charity and would also not be doing socially-useful work. We spend $1 on ads and this causes Joe (a rich guy) to give $1.50 to The Humane League or The Malaria Consortium, without affecting anyone elseâs behavior. From the PoV of ~âthe EA communityâ we have earned our $1 back plus gained an additional 50 cents. Again from the global EA community perspective, wouldnât we always want to do this?
The example you gave is about marginal cost-effectiveness (we spend â$1 on adsâ). I agree that then, in this abstract/âidealized case, you should spend the $1 on ads. I think all the uncertainty you would realistically have makes it less obvious, though.
But average cost-effectiveness would be more like, we spent $1,000,000 on an organization that did a bunch of different activities, and we think that led to $1,500,000 counterfactually going to charity. This seems good on average, but thereâs a further question of whether we should give another $1 to the organization. And I think that the 6x figure of the orignal post is referring to average cost-effectiveness (âour current grantees deliver an average adjusted return on donations of 6x across our effective giving portfolioâ). This is at least conceptually coherent with the bar for the marginal $ being closer to 1x.
I think you might find the GWWC impact evals interesting, they go into an enormous amount of depth on all these issues.
Okay, thank you. I aim to take a look at these evals and hopefully learn something and maybe give some useful feedback.
And one more point which maybe is obvious but just to get it out there.
Sure, but these are hard to account for. I agree itâs better to adjust the model when itâs possible, but youâll still be left with a model that has a tonne of uncertainty.
I agree that a large amount of uncertainty will persist, but I suppose we should aim to do the modeling and adjustments is mean zero. E.g., weâd put in a large adjustment for âpotential non-counterfactualityâ for things like âmaybe the people who pledged would have pledged later on anyways and the fact that they pledged and donated now means that theyâre likely to end their pledges earlier.â
I suspect that the impact evaluations indeed consider things like these, and I am looking forward to going over them when I have a moment. Thanks for engaging.
I donât think it does. Itâs conceptually coherent for an organization to have a very high average cost-effectiveness while also having a marginal cost-effectiveness below 1x. For this reason, I donât think you should have a âbarâ for average cost-effectiveness. (You might be making the point that if the average cost-effectiveness is above 1, then you are better off making the grant than burning the money, and so it clears a bar in that sense, but itâs not clear itâs worth making the grant vs making a potentially much smaller grant, and so itâs not a helpful âbarâ in the sense the term is usually used.)
Sure, but these are hard to account for. I agree itâs better to adjust the model when itâs possible, but youâll still be left with a model that has a tonne of uncertainty.
Yep! I wasnât trying to suggest you shouldnât account for that.
I want to make sure weâre talking about the same thing here. Iâd be want to know the cost-effectiveness in terms âfor each $1 we spend to promote givingâ (via starting new orgs or doing more fundraising) âhow much do we raise in truly counterfactual donations to the most effective charitiesâ and Iâd want this to be net of any donations or effective work that might be crowded out.
E.g., suppose Joe lives in the USA and earns $100k per year. Without our spending Joe, would not give anything to charity and would also not be doing socially-useful work. We spend $1 on ads and this causes Joe (a rich guy) to give $1.50 to The Humane League or The Malaria Consortium, without affecting anyone elseâs behavior. From the PoV of ~âthe EA communityâ we have earned our $1 back plus gained an additional 50 cents. Again from the global EA community perspective, wouldnât we always want to do this?
The example you gave is about marginal cost-effectiveness (we spend â$1 on adsâ). I agree that then, in this abstract/âidealized case, you should spend the $1 on ads. I think all the uncertainty you would realistically have makes it less obvious, though.
But average cost-effectiveness would be more like, we spent $1,000,000 on an organization that did a bunch of different activities, and we think that led to $1,500,000 counterfactually going to charity. This seems good on average, but thereâs a further question of whether we should give another $1 to the organization. And I think that the 6x figure of the orignal post is referring to average cost-effectiveness (âour current grantees deliver an average adjusted return on donations of 6x across our effective giving portfolioâ). This is at least conceptually coherent with the bar for the marginal $ being closer to 1x.
I think you might find the GWWC impact evals interesting, they go into an enormous amount of depth on all these issues.
Okay, thank you. I aim to take a look at these evals and hopefully learn something and maybe give some useful feedback.
And one more point which maybe is obvious but just to get it out there.
I agree that a large amount of uncertainty will persist, but I suppose we should aim to do the modeling and adjustments is mean zero. E.g., weâd put in a large adjustment for âpotential non-counterfactualityâ for things like âmaybe the people who pledged would have pledged later on anyways and the fact that they pledged and donated now means that theyâre likely to end their pledges earlier.â
I suspect that the impact evaluations indeed consider things like these, and I am looking forward to going over them when I have a moment. Thanks for engaging.