My Q1 2019 EA Hotel donation

On March 31, 2019, I donated 3200 GBP to the EA Ho­tel fundraiser via GoFundMe. The dona­tion cost me $4,306.14 USD. My de­ci­sion was based mainly on the in­for­ma­tion in the EA Ho­tel page and the doc­u­ments linked from the dona­tions list web­site page on EA Ho­tel, which in­clude the re­cent Effec­tive Altru­ism Fo­rum posts.

In this post, I de­scribe the rea­sons that in­fluenced my de­ci­sion to donate. I didn’t draft the post be­fore donat­ing, so some of the elab­o­ra­tion in­cludes as­pects that didn’t (at least con­sciously) in­fluence my dona­tion de­ci­sion.

I limited the time I spent writ­ing the post, and will most likely not be able to re­spond to com­ments. But please feel free to com­ment with your thoughts in re­sponse to my post or other com­ments!

NOTE: I have no af­fili­a­tion with the EA Ho­tel. I have never vis­ited it, nor have I closely col­lab­o­rated with any­body liv­ing there. I did not show this post to any­body af­fili­ated with the EA Ho­tel be­fore post­ing. Noth­ing here should be taken as an offi­cial state­ment about the EA Ho­tel.

The sec­tions of the post:

  • I like the idea of the EA Hotel

  • I like the skin-in-the-game of the key players

  • I like the ex­e­cu­tion so far

  • I see in­sti­tu­tional risk rea­sons for lack of in­sti­tu­tional fund­ing: Th­ese rea­sons don’t ap­ply to in­di­vi­d­ual donors, so I don’t see the lack of in­sti­tu­tional fund­ing as a rea­son to dis­suade me from donating

  • I have not been dis­suaded by the rea­sons against donat­ing that I have seen so far

  • I find the value of marginal dona­tions high and easy to grasp

  • How I de­cided to donate and de­ter­mined the dona­tion amount

I like the idea of the EA Hotel

My in­ter­pre­ta­tion of the fun­da­men­tal prob­lem the EA Ho­tel is try­ing to solve: provide low-cost and op­ti­mized tran­sient liv­ing ar­range­ments to peo­ple en­gaged in self-study or early stages of pro­jects. The ho­tel’s low-cost liv­ing ar­range­ments are fur­ther sub­si­dized so that long-term res­i­dents don’t have to pay any­thing at all, and in fact, get a stipend to cover some liv­ing ex­penses. This means that res­i­dents can pur­sue pro­jects with sin­gle-minded fo­cus with­out burn­ing through sav­ings or hav­ing to do ad­di­tional jobs just to keep them­selves fi­nan­cially afloat.

The back­drop of the prob­lem, as I un­der­stand:

  • EA com­mu­ni­ties have con­gre­gated in some of the most ex­pen­sive places in the world, such as the San Fran­cisco Bay Area, Bos­ton/​Cam­bridge, New York City, and Lon­don. Even out­side of these, most places with sig­nifi­cant num­bers of EAs tend to be cities, and these tend to have higher costs of liv­ing.

  • Most EA pro­jects have trou­ble rais­ing enough money to cover costs of liv­ing in these places, even af­ter they get fund­ing. More­over, most EA or­ga­ni­za­tions, which are also based in these ar­eas, do not pay enough of a pre­mium for peo­ple to build sav­ings that would al­low them to com­fortably spend months work­ing on such pro­jects in these ex­pen­sive lo­ca­tions.

  • Ten­den­cies within EA to donate large frac­tions of one’s per­sonal wealth may have fur­ther ex­ac­er­bated peo­ple’s lack of ad­e­quate sav­ings to pur­sue EA pro­jects.

Th­ese prob­lems, spe­cially the first one, have been widely ac­knowl­edged. At­tempts to figure out a new, lower-cost city for EAs and build group hous­ing in that city started since as far back as 2014, when the Co­or­di­na­tion of Ra­tion­al­ity/​EA/​SSC Hous­ing Pro­ject group was cre­ated. Brows­ing through the archives of that Face­book group is in­ter­est­ing be­cause it shows the amount of effort that has gone in over the years in iden­ti­fy­ing lower-cost liv­ing places for EAs. This is the group where EA Ho­tel founder Greg Colbourn first an­nounced his in­ten­tion to buy a ho­tel in Black­pool.

Side note: Peter McCluskey’s com­ment sug­gests that com­plain­ing about the high rent in ma­jor hubs is a sig­nal of low sta­tus, be­cause the most suc­cess­ful and in­fluen­tial peo­ple don’t seem to com­plain about it. This does not ac­cord with my im­pres­sion. More suc­cess­ful peo­ple tend to per­son­ally be able to af­ford high rents, but I’ve seen con­cern about high cost of liv­ing among peo­ple across the spec­trum. It’s more that the set of high-sta­tus in­fluen­tial peo­ple doesn’t over­lap much with the set of peo­ple who are most vo­cal about this prob­lem and most in­ter­ested in solv­ing it.

I like the skin-in-the-game of the key players

One of the main prob­lems with ex­e­cut­ing a pro­ject like the EA Ho­tel is that it is cap­i­tal-in­ten­sive: a lot of money needs to be put in to im­ple­ment an idea like this in a man­ner that is low-cost in the long run. In this case, Greg Colbourn had to spend 130,000 GBP to buy the EA Ho­tel, and this was af­ter get­ting it at a cheap price! For com­par­i­son, Berkeley REACH pays some­thing like $6,000 per month for rent for a cafe in Berkeley.

I find it im­pres­sive that Greg put his own money into pur­chas­ing the build­ing and fi­nanc­ing the first year of the ho­tel’s op­er­a­tions, at a time when get­ting out­side sup­port would be hard.

Also, brows­ing through the Co­or­di­na­tion of Ra­tion­al­ity/​EA/​SSC Hous­ing Pro­ject group archives, it looks like both Greg and Toon Alfrink, the ho­tel’s man­ager, have par­ti­ci­pated in the group for quite a while. While that doesn’t in and of it­self mean much, it does un­der­score their long-term com­mit­ment to the vi­sion.

Skin-in-the-game of key play­ers is very im­por­tant for me when mak­ing a siz­able dona­tion to an or­ga­ni­za­tion that has not yet achieved the level of fi­nan­cial sta­bil­ity that would make its sur­vival au­to­matic.

I like the ex­e­cu­tion so far

This breaks down into a lot of pieces:

  • I like both the high de­mand and the com­pe­tence ex­hibited in meet­ing the de­mand effectively

  • I like that the res­i­dents are very pos­i­tive about the hotel

  • I find the res­i­dent pro­files and their pro­jects rea­son­ably impressive

  • I like the open­ness about the ho­tel op­er­a­tions and the de­tailed in­for­ma­tion available on the website

  • I like the cost-effec­tive­ness of the ho­tel and think it solves the prob­lem (of pro­vid­ing low-cost liv­ing) that it set out to solve

I like both the high de­mand and the com­pe­tence ex­hibited in meet­ing the de­mand effectively

The pub­lic an­nounce­ment about the spe­cific EA Ho­tel, af­ter buy­ing it, was made by Greg Colbourn on June 18, 2018. Oc­cu­pancy started climb­ing through July and Au­gust. On Au­gust 9, the web­site had been launched and book­ings could be made through the web­site.

By Septem­ber, the ho­tel ap­peared to be run­ning in full steam, and even got press cov­er­age in The Economist and The Times. For the last six months, the ho­tel ap­pears to have been op­er­at­ing at rea­son­ably high oc­cu­pancy. The oc­cu­pancy chart across time is available with the header “Num­ber of guests over time” on the EA Ho­tel wiki.

Start­ing a new pro­ject and im­me­di­ately get­ting trac­tion is im­pres­sive. It’s even more im­pres­sive to have been able to cope well with the de­mand and keep the ho­tel res­i­dents satis­fied.

I like that the res­i­dents are very pos­i­tive about the hotel

Ho­tel res­i­dents ap­pear quite pos­i­tive about their ex­pe­rience at the ho­tel; see for in­stance Matt Gold­en­berg (halffull) and the com­ments on the other posts dis­cussing the ho­tel.

I find the res­i­dent pro­files and their pro­jects rea­son­ably impressive

The de­scrip­tion of the res­i­dents so far and the pro­jects and work com­pleted are both de­cent, and par­tic­u­larly good for some­thing that’s just got­ten off the ground.

I like the open­ness about the ho­tel op­er­a­tions and the de­tailed in­for­ma­tion available on the website

The EA Ho­tel web­site offers a lot of valuable in­for­ma­tion for po­ten­tial ho­tel res­i­dents, but also for oth­ers in­ter­ested in un­der­stand­ing the progress of the ho­tel. For in­stance, it in­cludes a de­scrip­tion of cur­rent guests and their work, a his­tor­i­cal oc­cu­pancy chart, and de­tailed in­for­ma­tion about food, clean­ing and laun­dry, show­ers, wifi, and more.

The EA Ho­tel team has also been quite forth­com­ing in shar­ing in­for­ma­tion in their fundraiser posts, in­clud­ing in­for­ma­tion they didn’t ini­tially ex­pect to share.

I like the cost-effec­tive­ness of the ho­tel and think it solves the prob­lem (of pro­vid­ing low-cost liv­ing) that it set out to solve

Let’s dig more into this. The offi­cial es­ti­mate for the EA Ho­tel is a cost of 5700 GBP per res­i­dent per year, in­clud­ing the stipend paid out to them. That trans­lates to about $7500 USD per per­son per year.

How low-cost is this com­pared to other op­tions? It’s definitely cheaper than the av­er­age deal in the San Fran­cisco Bay Area or New York City. My anec­do­tal ev­i­dence sug­gests it would be very very hard to get a place in the San Fran­cisco Bay Area where even the rent + util­ities is lower than $7500/​year, and once you add food, it will clearly ex­ceed that range. Land­ing a good deal like this would it­self take weeks if not months of search­ing, time that can burn sav­ings or run­way.

I know of two cat­e­gories of op­tions that would be cheaper than the EA Ho­tel:

  • Liv­ing with oth­ers who are tak­ing care of the main liv­ing ex­penses: This could mean liv­ing with par­ents or with a spouse, a sibling, or friends, who are shoulder­ing the ma­jor­ity of the house­hold liv­ing ex­penses. Depend­ing on the liv­ing ar­range­ment, the marginal cost of the res­i­dent may not be too high. For in­stance, you might be liv­ing with your par­ents in a room in their house, but they wouldn’t have rented it out oth­er­wise, so the effec­tive rent cost is zero. Food, util­ities, etc. are all shared, and the marginal cost of your food and util­ities would likely be in the $200 to $400 range. Similar ar­range­ments may ex­ist with a spouse or sibling.

  • Liv­ing in a much lower-cost part of the world: Ex­am­ple places in­clude Eastern Europe, South­east Asia, and South Asia.

The dis­ad­van­tages of these op­tions:

  • Some peo­ple may not have oth­ers will­ing to take care of main liv­ing ex­penses, or may not be com­fortable seek­ing their help: In par­tic­u­lar, a per­son who quits a well-pay­ing job to work on an EA pro­ject may not feel com­fortable or wel­comed re­duc­ing liv­ing costs by go­ing and liv­ing with their par­ents.

  • Liv­ing in places with differ­ent cul­ture and lan­guage may not be con­ducive to fo­cus­ing on an EA pro­ject: Go­ing to Thailand or Ro­ma­nia to cut costs may mean too much ad­just­ment time and effort and not enough re­sources left to fo­cus on the pro­ject. For some peo­ple, this op­tion might ac­tu­ally work well, based on their back­ground and com­fort lev­els in differ­ent places. But for oth­ers, this op­tion may not work.

  • In both cases, one does not have the ad­van­tage of be­ing plugged into a net­work of other peo­ple also work­ing on and mo­ti­vated to make progress on similar pro­jects.

Based on this anal­y­sis, I think the EA Ho­tel offers a good op­tion that is not clearly dom­i­nated by any other. More­over, the gen­eral idea of hav­ing such a ho­tel, if suc­cess­ful, could be repli­cated in other lo­ca­tions. That would lead to a wider range of price points to meet the needs of peo­ple with differ­ent trade-offs.

I see in­sti­tu­tional risk rea­sons for lack of in­sti­tu­tional funding

Ac­cord­ing to a com­ment on a ques­tion ask­ing why the EA Ho­tel is hav­ing trou­ble fundrais­ing:

EA Grants is tak­ing a long time to re­view the ho­tel’s ap­pli­ca­tion. There have been ru­mours that this is be­cause of one or sev­eral of the fol­low­ing: (a.) staffing is­sues at CEA which have only re­cently been re­solved; (b.) de­sire to perform an au­dit/​re­view of the ho­tel. Also, to see some op­er­a­tional changes at the ho­tel be­fore ex­tend­ing run­way; (c.) a strate­gic de­ci­sion to de­lay fund­ing the ho­tel as a coun­ter­mea­sure against cul­tural dilu­tion, or PR risk. (c.) seems un­likely.

I can’t speak to the ac­cu­racy of the claims here, but they are sug­ges­tive.

The EA Ho­tel is a suffi­ciently dis­tinc­tive pro­ject, and also an in­cu­ba­tor of many other pro­jects, that in­sti­tu­tions fund­ing it may per­ceive risk to their rep­u­ta­tion from even one of the funded pro­jects by the EA Ho­tel go­ing wrong. I don’t ex­pect this to pre­vent the EA Ho­tel from get­ting in­sti­tu­tion­ally funded in the long run. But I do ex­pect the pro­cess to take longer. I think a stronger, longer track record will be needed be­fore it gets funded by EA Funds, EA Grants, or other larger sources of fund­ing in the EA com­mu­nity.

This means that in­di­vi­d­ual donors, who have less of these in­sti­tu­tional risk con­cerns, have a big­ger role to play in the be­gin­ning.

I have not been dis­suaded by the rea­sons against donat­ing that I have seen so far

This ap­plies first and fore­most to the rea­sons I had ac­cess to prior to mak­ing my dona­tion de­ci­sion. But I’ve been keep­ing an eye on the com­ments on the Grue Slinky’s $100 prize for best ar­gu­ment post, the ques­tion post by Milan Griffes, and the case for the EA ho­tel post and even now, I don’t see any­thing that changes my stance mean­ingfully.

My syn­the­sis of the ar­gu­ments so far is that there is a strong prior in fa­vor of sup­port­ing in­di­vi­d­u­als and pro­jects di­rectly rather than sup­port­ing the EA Ho­tel. In this view, the ev­i­dence emerg­ing from the EA Ho­tel so far does not mean­ingfully al­ter that prior. Differ­ent var­i­ants of this story:

  • Challeng­ing the idea of the ho­tel as a hub: The very idea of hav­ing peo­ple con­gre­gate at the EA Ho­tel to work doesn’t make sense; it doesn’t add value rel­a­tive to them go­ing to other places and work­ing.

  • Challeng­ing the fi­nanc­ing model of the ho­tel: The EA Ho­tel is a great idea, and should con­tinue to ex­ist as an op­tion for in­di­vi­d­u­als work­ing on pro­jects, but in­di­vi­d­u­als com­ing to the EA Ho­tel should get their own fund­ing and pay at cost. This will re­duce the EA Ho­tel’s op­er­a­tional costs to near-zero, be­cause it is re­cov­er­ing costs from all res­i­dents (this is Ar­gu­ment 2 in Bren­don Wong’s com­ment).

  • Challeng­ing the spe­cific ac­com­plish­ments so far: The speci­fics that we have of the EA Ho­tel res­i­dents and their out­puts is not yet strong enough ev­i­dence that the EA Ho­tel can gen­er­ate sig­nifi­cant value. How­ever, if in the fu­ture, much more high-value stuff comes out of the EA Ho­tel, the EA Ho­tel would be­come a worth­wile dona­tion tar­get.

I see all the cri­tiques as hav­ing some value. In fact, it may well be the case that the sus­tain­able model for the ho­tel in the long term would be to put a much lower ceiling on the num­ber of long-term res­i­dents for whom fees are waived. Nonethe­less, I think the ev­i­dence so far is pos­i­tive enough, and the peo­ple in­volved in run­ning the ho­tel have enough skin in the game, that I ex­pect with high prob­a­bil­ity that they will make the nec­es­sary ad­just­ments based on the feed­back they get. In the mean­time, I think there is a lot of value in this ex­per­i­ment, and I want there to be enough room for the EA Ho­tel team to plan the tran­si­tion and tweak­ing of their mod­els with­out caus­ing too much dis­rup­tion.

I find the value of marginal dona­tions high and easy to grasp

The EA Ho­tel has a rel­a­tively easy-to-grasp op­er­a­tional math: it costs about 240 GBP per day to run, with the cost vary­ing a bit based on cur­rent oc­cu­pancy, and in par­tic­u­lar on the mix of res­i­dents (how many are pay­ing cost and how many are stay­ing for free). The fundraiser uses this math to ask for 130,000 GBP to cover 18 months of op­er­a­tions. Greg Colbourn gives a figure of 265 GBP in this com­ment but clar­ifies that ac­tual costs in Jan­uary and Fe­brary where 25% less af­ter fac­tor­ing in rent paid costs; I’m tak­ing 240 GBP as some­where in be­tween the the­o­ret­i­cal figure and the ob­served figure for Jan­uary and Fe­bru­ary.

In the same com­ment, Colbourn says:

Our costs are ~£8k/​month, so even buy­ing a month or two run­way would make a big differ­ence in terms of giv­ing us some breath­ing space to work on get­ting more money com­ing in. It’s also ap­prox­i­mately con­tin­u­ously di­visi­ble in that ev­ery ~£265 will keep us go­ing an­other day.

With this model of spend­ing, I can con­cretely think of my dona­tion of 3200 GBP as hav­ing added about 13 days to the ho­tel’s run­way.

The as­pect of this that’s hard to quan­tify: I’m not ac­tu­ally just buy­ing 13 days of the ho­tel’s op­er­a­tions. My goal is to help the ho­tel ex­tend its run­way so that it can be bet­ter equipped to do some com­bi­na­tion of rais­ing more money and mak­ing the op­er­a­tional changes needed to sur­vive with what­ever money it has. How good 13 days is in terms of mak­ing the ho­tel more likely to fundraise enough money to sur­vive in the long term, I don’t know. Nonethe­less, it is still a rel­a­tively clear calcu­la­tion with a po­ten­tial for high im­pact.

The other part that is hard to pre­dict in ad­vance: how much my dona­tion might trig­ger other dona­tions. It is pos­si­ble that some large dona­tions can spur other large dona­tions by send­ing a sig­nal. It’s even pos­si­ble that this post might con­vince more peo­ple to donate to the EA Ho­tel, though that is not the pri­mary pur­pose of my writ­ing this post.

One area of con­cern I have is that the fundraiser has not gone well. I am not con­cerned in terms of what it says about the value of fund­ing the ho­tel, but I do have con­cern in terms of what it says about the ho­tel’s abil­ity to raise funds in the longer term. How­ever, I chose to donate de­spite this be­cause:

  • The EA Ho­tel team seems to be su­perfo­cused on ac­tu­ally run­ning the ho­tel, and do­ing a good job of it. It’s nat­u­ral if this doesn’t leave a lot of time or en­ergy for fundrais­ing.

  • As men­tioned ear­lier, both Greg Colbourn and Toon Alfrink seem to have enough skin in the game that I’m some­what con­fi­dent that with more re­sources they will be able to fo­cus their at­ten­tion on the prob­lem of fund­ing.

  • Judg­ing from the past his­tory of similar EA pro­jects, such as Berkeley REACH, there may well be an in­flec­tion point com­ing soon when the dona­tion vol­ume to the EA Ho­tel goes up. With Berkeley REACH, the situ­a­tion seemed quite dire till June 2018, but then with both Eliezer Yud­kowsky and Ben Hoff­man plug­ging REACH, a num­ber of peo­ple made pledges. Later, REACH also got in­sti­tu­tional fund­ing from BERI and EA Funds. To­day, REACH has $3,528 in com­mit­ted monthly funds.

How I de­cided to donate and de­ter­mined the dona­tion amount

Un­like the other sec­tions, this sec­tion is a more per­sonal one that dis­cusses how I traded off my own fi­nances against what I saw as a fund­ing gap that needed filling. For back­ground, see my dona­tion his­tory page and my 2018 dona­tions post.

A few months ago, back when the first EA Ho­tel fundraiser post was pub­lished, I had looked at the EA Ho­tel fundraiser and dug around a bit on their web­site. I re­mem­ber do­ing so while do­ing the ini­tial round of adding doc­u­ments re­lated to the EA Ho­tel on the dona­tions list web­site (the date of this com­mit was Jan­uary 9, about two weeks af­ter the fundraiser post).

Since then, I didn’t think ac­tively about the EA Ho­tel till I saw more posts of theirs on the Effec­tive Altru­ism Fo­rum in the past week. On March 30, I added a bunch more doc­u­ments re­lated to the EA Ho­tel to the dona­tions list web­site. As I read through the doc­u­ments, I started think­ing through the ar­gu­ments de­scribed in this post. I came to the ten­ta­tive con­clu­sion that there was an im­por­tant fund­ing gap that ur­gently needed to be filled.

I ran this think­ing by my es­teemed friend and col­lab­o­ra­tor-on-many-pro­jects Issa Rice, who did not im­me­di­ately point out ma­jor flaws in my think­ing. I slept over the thought on the night of March 30. On the morn­ing of March 31, I re­viewed the in­for­ma­tion, and read a new post The case for the EA Ho­tel. This solid­ified my de­ci­sion to donate.

When I had ini­tially been pon­der­ing how much to donate, I had been think­ing of an amount in the range of 1500 to 4000 USD. I ul­ti­mately de­cided on a value slightly above the high end of this range. My rea­sons for donat­ing as much as I did were:

  • In the past few months, I’ve ended up spend­ing less on some other pro­jects than I had an­ti­ci­pated, and there­fore built up sav­ings at a greater rate than ex­pected. This has made it more fea­si­ble for me to donate a larger amount.

  • In light of all the over­head, both for me and for the re­cip­i­ent, I wanted a dona­tion amount that made a big enough differ­ence to jus­tify the over­head. One week of op­er­a­tions did not in­tu­itively feel like enough, but two weeks did.

The main rea­sons I didn’t donate more:

  • The pri­mary con­straint was how much I felt I could com­fortably af­ford to donate with­out com­pro­mis­ing my long-term sav­ing tar­gets. Although I could prob­a­bly donate a lit­tle more, be­ing con­fi­dent of that would have re­quired more care­ful fi­nan­cial calcu­la­tion. The amount I ul­ti­mately ended up donat­ing was at the high end of what I felt I could donate with­out hav­ing to do much calcu­la­tion.

  • I am also in­ter­ested in see­ing the dy­namic of how fur­ther dona­tions play out. I think this amount is enough to serve as so­cial proof that out­siders are will­ing to give money to the EA Ho­tel. Depend­ing on how fundrais­ing dy­nam­ics pro­ceed, I may make one more dona­tion.

The main rea­sons I didn’t defer the dona­tion:

  • I felt I had enough in­for­ma­tion (thanks to all the ex­ten­sive dis­cus­sion on the EA Fo­rum about the EA Ho­tel in the past few days) and was un­likely to get any­thing in the next few days that would change my stance sig­nifi­cantly.

  • I felt a sense of ur­gency given that the ex­ist­ing run­way was ex­pected to last till May. Donat­ing now, I felt, could ex­tend the run­way enough to let the fundraiser pick up pace.

  • Also, since I’m quite busy dur­ing the week, I felt that the week­end is a good time to make the dona­tion and do the aux­iliary work such as doc­u­ment­ing it in this post.