I’ve not thought about this idea much or read the linked articles on impact purchases, but a few quick thoughts:
I think prizes suffer from only allowing the most risk-tolerant to be incentivized by them since there is generally an aspect of competition in them and the winner often takes all or most of the prize funds.
Impact purchases seem like an improvement over this if you set it up like a grant that pays at the end rather than the beginning, so it’s tied to a single project/team and not a competition.
There might be hybrid model possible where a certain amount of funds are granted at the start of the project to cover costs and additional funding is awarded only as certain project milestones are hit, up to and including completion of the project. Some of this completion money is for awarding impact and not just funding the next phase of the project, as would be the case in a grant, with most of the impact award money held back until the end.
This lets me imagine funding something at like 20% the value of its impact up until it is created at which point I pay off the remaining 80% owed.
For me the most important consideration is flexibility, i.e. not having to wait for a grant comity to make up their mind before I can start. For this problem, the hybrid model is no better than a grant, unless it can speed up the application process by an order of magnitude.
Also, any major improvement in evaluation time also needs to be combined with running applications. Otherwise the applicant still have to wait a few months (on expectation) for the next grant round to come around. I guess there is a reason no major grant agency has running applications?
Let’s say you have running applications that evaluation time is proportional to the amount of money (I have no idea of that is true). Then funding something 20% up front would take a 1⁄5 of the time to evaluate, which is not bad. But I’m not sure how useful that would be for the applicant. I think most applications will fall into one of two cases:
1) The applicants is fine with taking the risk of not getting paid anything
2) The applicant needs to know that the majority of the budget will get covered
For example, if I run an event online or at CEEALAR (formally EA Hotel), I’m ok with taking the risk of not getting paid, I’ll just adjust my calculations for deciding if I want to run that event again. But if I run an event that has actual cost for me (other than my time), like travel and/or venue, then I need to know that those cost will be covered, 20% up front is probably not good enough.
But if an applicant is willing to put up with the hassle of applying for a grant (because they need the guaranteed money), then having some token amount depend on the outcome might be motivating. However, this also means that the grant maker need to evaluate the project twice, which takes even more time. But if I imagine myself as the recipient, I would very much welcome a post project evaluation from the grant maker, if this is something they want to do.
I think a improvement of this suggestion, is to cover any necessary cost in an initial grant (weather that be 0% or 90%). And offer an additional payment as a bonus if the project is successful. Where projects that request 0% in advance are “auto accepted” for the first half (which is £0). There might still be some point to pre-register projects with the grant makers, I think? Maybe they can say what metrics to track for the post evaluation? E.g. what questions they want in an event evaluation survey, and similar?
You can also borrow against the future prize or impact purchase, e.g. as Goldman Sachs allows you to do (in some limited cases). This moves the risk onto diversified private investors.
That’s pretty cool, but it seems mostly focused around supporting government agencies using this as an alternative funding mechanism to save money or defer costs or avoid paying for undelivered services, thus improving government spending efficiency. I wonder what it would take to develop that into something that would support a wider range of funding sources? Seems like something someone with some expertise and experience in finance could potentially pioneer as a neglected way to generally support EA.
I’ve not thought about this idea much or read the linked articles on impact purchases, but a few quick thoughts:
I think prizes suffer from only allowing the most risk-tolerant to be incentivized by them since there is generally an aspect of competition in them and the winner often takes all or most of the prize funds.
Impact purchases seem like an improvement over this if you set it up like a grant that pays at the end rather than the beginning, so it’s tied to a single project/team and not a competition.
There might be hybrid model possible where a certain amount of funds are granted at the start of the project to cover costs and additional funding is awarded only as certain project milestones are hit, up to and including completion of the project. Some of this completion money is for awarding impact and not just funding the next phase of the project, as would be the case in a grant, with most of the impact award money held back until the end.
This lets me imagine funding something at like 20% the value of its impact up until it is created at which point I pay off the remaining 80% owed.
For me the most important consideration is flexibility, i.e. not having to wait for a grant comity to make up their mind before I can start. For this problem, the hybrid model is no better than a grant, unless it can speed up the application process by an order of magnitude.
Also, any major improvement in evaluation time also needs to be combined with running applications. Otherwise the applicant still have to wait a few months (on expectation) for the next grant round to come around. I guess there is a reason no major grant agency has running applications?
Let’s say you have running applications that evaluation time is proportional to the amount of money (I have no idea of that is true). Then funding something 20% up front would take a 1⁄5 of the time to evaluate, which is not bad. But I’m not sure how useful that would be for the applicant. I think most applications will fall into one of two cases:
1) The applicants is fine with taking the risk of not getting paid anything
2) The applicant needs to know that the majority of the budget will get covered
For example, if I run an event online or at CEEALAR (formally EA Hotel), I’m ok with taking the risk of not getting paid, I’ll just adjust my calculations for deciding if I want to run that event again. But if I run an event that has actual cost for me (other than my time), like travel and/or venue, then I need to know that those cost will be covered, 20% up front is probably not good enough.
But if an applicant is willing to put up with the hassle of applying for a grant (because they need the guaranteed money), then having some token amount depend on the outcome might be motivating. However, this also means that the grant maker need to evaluate the project twice, which takes even more time. But if I imagine myself as the recipient, I would very much welcome a post project evaluation from the grant maker, if this is something they want to do.
I think a improvement of this suggestion, is to cover any necessary cost in an initial grant (weather that be 0% or 90%). And offer an additional payment as a bonus if the project is successful. Where projects that request 0% in advance are “auto accepted” for the first half (which is £0). There might still be some point to pre-register projects with the grant makers, I think? Maybe they can say what metrics to track for the post evaluation? E.g. what questions they want in an event evaluation survey, and similar?
You can also borrow against the future prize or impact purchase, e.g. as Goldman Sachs allows you to do (in some limited cases). This moves the risk onto diversified private investors.
That’s pretty cool, but it seems mostly focused around supporting government agencies using this as an alternative funding mechanism to save money or defer costs or avoid paying for undelivered services, thus improving government spending efficiency. I wonder what it would take to develop that into something that would support a wider range of funding sources? Seems like something someone with some expertise and experience in finance could potentially pioneer as a neglected way to generally support EA.