One problem I see is lots of funders would hate this: from their perspective it creates a sort of tax on their donation. Instead of the whole donation going to whatever new thing they’d want to fund, a percentage gets set aside for current employees. I think this is part of the reason (per Jared’s smart reply) that grantwriting commissions are looked down upon in the industry.
I really hope this isn’t true for EA donors. For most EA organisations, the staff are the supermajority of the cost anyway, so the only questions should be whether this sort of incentive scheme motivates them to be more or less productive per $ than a flat salary, and zooming out, whether such schemes would encourage more total high value work to get done.
Another problem could be that lots of donors want to feel like nonprofit employees are not motivated by money, and implying otherwise could make the nonprofit unatttractive.
Again, are we talking about EA donors? If so, I’d hope they were neutral on what motivated the staff except inasmuch as it related to how much they could get done.
one problem is a lot of results take a long-term to materialize (and are hard to prove/calculate reliably), and you might have to pay too many premiums (to adjust for risk + time value of money) to make it worth it.
This seems plausibly insurmountable to me. Compare for-profit startups: I would be very surprised if those that offered their employees stock-based comp didn’t outperform those that offered them internally judged results-based comp. (do any of them even do the latter?)
Yeah I wasn’t really talking about EA donors per se: I think EA nonprofits should try to be funded by non EA donors (/expand the EA community) to the extent possible and that we also shouldn’t assume there’s a clear differentiation between EA and non-EA donors.
That said, I do think the tax effect I outlined would reasonably be of concern to EA donors or insofar as it’s not because the compensation mechanism will definitely create better results, it may make the argument a bit circular. I also think there’s a principle/agent problem with donors (maximize impact) and non-profit staff (motivated consciously or unconsciously in part by maximizing compensation/job security), and it would be a mistake to assume that shared EA values fully solve that problem.
‘I think EA nonprofits should try to be funded by non EA donors (/expand the EA community) to the extent possible’
The extent possible for ‘weird’ EA projects is often ‘no extent’. We have applied to various non-EA grants that sorta kinda cover the areas you could argue we’re in, and to my knowledge not received any of them. I believe that to date close to (perhaps literally) 100% of our funding has come from EAs or EA-adjacent sources, and I suspect that this will be true of the majority of EA nonprofits.
‘Assuming that shared EA values fully solve the problem’ is exactly what we’re trying to avoid here. Typical nonprofit salaries just work on the assumption that the person doing the job is willing to take a lower salary with no upside, which leads to burn out, lack of motivation and sometimes lack of competence at EA orgs. We’re trying to think of a way to recreate the incentive-driven structure of successful startups, both to give the staff a stronger self-interest-driven motivation and to make future such roles more appealing to stronger candidates.
I really hope this isn’t true for EA donors. For most EA organisations, the staff are the supermajority of the cost anyway, so the only questions should be whether this sort of incentive scheme motivates them to be more or less productive per $ than a flat salary, and zooming out, whether such schemes would encourage more total high value work to get done.
Again, are we talking about EA donors? If so, I’d hope they were neutral on what motivated the staff except inasmuch as it related to how much they could get done.
This seems plausibly insurmountable to me. Compare for-profit startups: I would be very surprised if those that offered their employees stock-based comp didn’t outperform those that offered them internally judged results-based comp. (do any of them even do the latter?)
Yeah I wasn’t really talking about EA donors per se: I think EA nonprofits should try to be funded by non EA donors (/expand the EA community) to the extent possible and that we also shouldn’t assume there’s a clear differentiation between EA and non-EA donors.
That said, I do think the tax effect I outlined would reasonably be of concern to EA donors or insofar as it’s not because the compensation mechanism will definitely create better results, it may make the argument a bit circular. I also think there’s a principle/agent problem with donors (maximize impact) and non-profit staff (motivated consciously or unconsciously in part by maximizing compensation/job security), and it would be a mistake to assume that shared EA values fully solve that problem.
‘I think EA nonprofits should try to be funded by non EA donors (/expand the EA community) to the extent possible’
The extent possible for ‘weird’ EA projects is often ‘no extent’. We have applied to various non-EA grants that sorta kinda cover the areas you could argue we’re in, and to my knowledge not received any of them. I believe that to date close to (perhaps literally) 100% of our funding has come from EAs or EA-adjacent sources, and I suspect that this will be true of the majority of EA nonprofits.
‘Assuming that shared EA values fully solve the problem’ is exactly what we’re trying to avoid here. Typical nonprofit salaries just work on the assumption that the person doing the job is willing to take a lower salary with no upside, which leads to burn out, lack of motivation and sometimes lack of competence at EA orgs. We’re trying to think of a way to recreate the incentive-driven structure of successful startups, both to give the staff a stronger self-interest-driven motivation and to make future such roles more appealing to stronger candidates.