It’s worth spelling out why you think that individuals are cheaper than institutions. Reasons I can see:
Individuals are willing to work for less. But this doesn’t really speak to the opportunity cost of their time, which (from the perspective of society, or “effective altruism” as a whole) is the main cost.
Tax treatment. Most of the time this is much worse for gifts to individuals (unless you arrange to make a grant to an individual, which is quite difficult for most donors and introduces significant additional reporting overhead). It can be better if (a) donors weren’t able to deduct their donations anyway (e.g. because they are in an unfavorable jurisdiction or are donating > 50% of AGI in the US), and (b) people are willing to work for very low wages outside of institutions.
Fundraising. I don’t see why this would be cheaper for individual donors, though I agree that in general we could as a community reduce fundraising costs by improving our collective decision-making.
Coordination. Groups spend time coordinating with each other, on training and recruiting, etc., but in general these seem like worthwhile projects that are pursued precisely because they are cost-effective.
Administrative overhead. This seems like the main game. Some of this is useful work that improves efficacy, while some is just overhead involved with hiring people, accounting, maintaining non-profit status. It would be useful to get a more precise estimate for the total “lost” overhead that can be avoided by working independently. I think this is the main thing you could do to make this case more compelling.
It’s worth pointing out that the number of dollars spent on overhead as a fraction of total dollars isn’t a directly relevant metric, given that the opportunity cost of employee time is often significantly higher (so e.g. a 20% financial overhead may be more like a 5-10% overhead if we include all inputs). Between this and some overhead being useful for productivity (e.g. having an office, saving employee time, recruiting...), I mostly don’t feel concerned about institutional overhead.
Strongly second this comment. As someone currently doing a lot of things that more or less amount to ‘pay other people to do thing x that I think should be done’, I would be very interested in understanding the most efficient way of doing so. But from this post I really don’t know why individuals should be cheaper overall; charitable status is a huge factor in favour of institutions (a much larger factor in the UK than the US admittedly, but still) and is currently the only significant factor I am aware of in either direction.
One difference in cost comes from institutions such as Oxford requiring their employees to get prestigious wages. That makes the $75k average misleading. More obscure charities can hire employees much more cheaply.
To give the example of a charity that’s competitive with paying individuals (and indeed obscure, at least outside EA!), the employees at Charity Science try to live on fairly minimal expenses. And we’re currently spending very little time and thus money on administrative overhead; the estimate of operations time in 2015 here is generous.
This isn’t to say that I’m against funding individuals at all. Indeed the boundaries are fuzzy. People can fund me directly to work on the projects I run (albeit with some money then going to people I pay to work on them when this is more efficient), but they can do that tax-deductibly by donating to Charity Science (the legal umbrella entity, rather than the core fundraising projects).
the employees at Charity Science try to live on fairly minimal expenses. And we’re currently spending very little time and thus money on administrative overhead; the estimate of operations time in 2015 here is generous.
As great as that all is, isn’t this largely due to the culture at Charity Science, and the culture it tries to promote? I expect it would be difficult to normalize or replicate this in existing effective altruism charities. (It seems it would be difficult enough to spread among the existing non-profit world at large, where it isn’t already being practiced, that I won’t bother discussing it). Not that it wouldn’t be worth trying, but we can dissect the problem to get a better sense of it.
It’s not necessarily that existing employees of various charities would be averse to engendering these norms, per se, but they might have a culture which already normalizes how perfectly acceptable it is to not live at a fairly minimal level, i.e., just covering basic living costs. I don’t know what other organizations do or don’t do this, so I won’t speculate.
If Charity Science or its employees would want to change this, they can spread these values among other effective altruists or other supporters they meet, and who are enthusiastic about Charity Science. Then, when they go on to do some kind of direct work, they’ll be more inclined to keep costs this low. One or more of you could also post to this forum, as its readership is amenable to (some) more personal stories. I think those values in how to run an organization or how to do the work won’t stick unless some people who all shared those values founded an organization together.
Of course, Charity Science could always get more volunteers, expand to hire effective altruists doing independent work in line with its mission, or hire contractors(?).
Sure, that’s totally fair. Though as I’m sure you know it doesn’t affect the point about whether institutions or individuals are more efficient to fund: we’re one example of people who could be funded cheaply whether as individuals or as an organisation. Admittedly an unrepresentative example, at one extreme.
[One could] spread these values among other effective altruists [so that] when they go on to do some kind of direct work, they’ll be more inclined to keep costs this low. One or more of you could also post to this forum, as its readership is amenable to (some) more personal stories.
That could be a good idea, though I don’t know if we’ll personally write this—we’re happy for others to do so though! (It could be along the lines of that EA interview series you mentioned you might continue.)
It’s worth spelling out why you think that individuals are cheaper than institutions. Reasons I can see:
Individuals are willing to work for less. But this doesn’t really speak to the opportunity cost of their time, which (from the perspective of society, or “effective altruism” as a whole) is the main cost.
Tax treatment. Most of the time this is much worse for gifts to individuals (unless you arrange to make a grant to an individual, which is quite difficult for most donors and introduces significant additional reporting overhead). It can be better if (a) donors weren’t able to deduct their donations anyway (e.g. because they are in an unfavorable jurisdiction or are donating > 50% of AGI in the US), and (b) people are willing to work for very low wages outside of institutions.
Fundraising. I don’t see why this would be cheaper for individual donors, though I agree that in general we could as a community reduce fundraising costs by improving our collective decision-making.
Coordination. Groups spend time coordinating with each other, on training and recruiting, etc., but in general these seem like worthwhile projects that are pursued precisely because they are cost-effective.
Administrative overhead. This seems like the main game. Some of this is useful work that improves efficacy, while some is just overhead involved with hiring people, accounting, maintaining non-profit status. It would be useful to get a more precise estimate for the total “lost” overhead that can be avoided by working independently. I think this is the main thing you could do to make this case more compelling.
It’s worth pointing out that the number of dollars spent on overhead as a fraction of total dollars isn’t a directly relevant metric, given that the opportunity cost of employee time is often significantly higher (so e.g. a 20% financial overhead may be more like a 5-10% overhead if we include all inputs). Between this and some overhead being useful for productivity (e.g. having an office, saving employee time, recruiting...), I mostly don’t feel concerned about institutional overhead.
Strongly second this comment. As someone currently doing a lot of things that more or less amount to ‘pay other people to do thing x that I think should be done’, I would be very interested in understanding the most efficient way of doing so. But from this post I really don’t know why individuals should be cheaper overall; charitable status is a huge factor in favour of institutions (a much larger factor in the UK than the US admittedly, but still) and is currently the only significant factor I am aware of in either direction.
One difference in cost comes from institutions such as Oxford requiring their employees to get prestigious wages. That makes the $75k average misleading. More obscure charities can hire employees much more cheaply.
To give the example of a charity that’s competitive with paying individuals (and indeed obscure, at least outside EA!), the employees at Charity Science try to live on fairly minimal expenses. And we’re currently spending very little time and thus money on administrative overhead; the estimate of operations time in 2015 here is generous.
This isn’t to say that I’m against funding individuals at all. Indeed the boundaries are fuzzy. People can fund me directly to work on the projects I run (albeit with some money then going to people I pay to work on them when this is more efficient), but they can do that tax-deductibly by donating to Charity Science (the legal umbrella entity, rather than the core fundraising projects).
As great as that all is, isn’t this largely due to the culture at Charity Science, and the culture it tries to promote? I expect it would be difficult to normalize or replicate this in existing effective altruism charities. (It seems it would be difficult enough to spread among the existing non-profit world at large, where it isn’t already being practiced, that I won’t bother discussing it). Not that it wouldn’t be worth trying, but we can dissect the problem to get a better sense of it.
It’s not necessarily that existing employees of various charities would be averse to engendering these norms, per se, but they might have a culture which already normalizes how perfectly acceptable it is to not live at a fairly minimal level, i.e., just covering basic living costs. I don’t know what other organizations do or don’t do this, so I won’t speculate.
If Charity Science or its employees would want to change this, they can spread these values among other effective altruists or other supporters they meet, and who are enthusiastic about Charity Science. Then, when they go on to do some kind of direct work, they’ll be more inclined to keep costs this low. One or more of you could also post to this forum, as its readership is amenable to (some) more personal stories. I think those values in how to run an organization or how to do the work won’t stick unless some people who all shared those values founded an organization together.
Of course, Charity Science could always get more volunteers, expand to hire effective altruists doing independent work in line with its mission, or hire contractors(?).
Sure, that’s totally fair. Though as I’m sure you know it doesn’t affect the point about whether institutions or individuals are more efficient to fund: we’re one example of people who could be funded cheaply whether as individuals or as an organisation. Admittedly an unrepresentative example, at one extreme.
That could be a good idea, though I don’t know if we’ll personally write this—we’re happy for others to do so though! (It could be along the lines of that EA interview series you mentioned you might continue.)