I’ve been thinking a bit about EA consultancy solutions for a while. A few thoughts:
1. I think many EA orgs are much more resistant to outsourcing large amounts of work than they should be. I’ve had a surprising amount of trouble getting groups to pay even token amounts of Guesstimate, a few years back, and have seen other groups refrain from making payments. This seems due to multiple reasons: they often aren’t sure how their donors would view this (often somewhat expensive) spending, this sort of spending often needs approval from a few parties, and in many situations it just isn’t allowed (University rules).
2. Right now the market for large EA consulting seems very isolated to OpenPhil. If this is the case, I imagine the value proposition is precarious to the contractors. Often the main benefit to hiring a contractor over an employee is the ease of firing/ending contracts, but this is obviously quite undesired by the contractor. When you have only one client, being an employee is generally a better deal than being a contractor (with the exception that sometimes they pay significantly more to compensate). See the recent ridesharing contractor debate as an example.
3. As mentioned in (2), generally the way that contractors work is that they cost a fair bit (~1.3x to 2x) more than an employee per hour worked. This is because they need to also pay for work benefits, the time between jobs, and the costs of finding new work. As long as all parties are fine with this, this can work, but it’s something to be aware of. I think a lot of organizations balk when they see contractor prices for most kinds of work they’re not used to.
If we’d like to move in the direction of an “Effective Altruist Economy/Market”, some things that might help kickstart this would be:
1. Setting expectations that contractors will cost money, but are often a good move, all things considered. I imagine it could eventually become common knowledge that contracting relationships are often worthwhile. This would prevent the awkwardness around funders seeing big contractor line-items.
2. Subsidizing contractor rates to small or medium sized client organizations. Like, EA Funds pays out $0.40 for each $1 paid to a contractor by one of these organizations, for research work. In theory there could be some sort of quadratic funding setup for group purchased.
3. Many contractors that organizations themselves come from those organizations. In general, having better systems to facilitate engagement with core Effective Altruists and promising other people will lead to better understandings of needs, which will enable more new consulting groups. I think that understanding the internal needs is really important, but also very difficult.
Thanks Ozzie, these are good suggestions. To add some thoughts: I think we may benefit from someone building a directory of aspiring freelance consultants .This can help solve coincidence of wants issues (i.e., knowing who wants to hire/be hired) and help provide the scale and critical mass needed for many person consultancies to form and grow.
It would need to be low effort as now many potential consultants are doing very well in their work lives and don’t really have time to engage with EA groups and organisations. Even something like this which we have for the behaviour science community would be a big help to start. https://www.eac-network.com/ might be worth contacting as they could be good people to lead something.
Some advanced market commitments (i.e., organisations publicly committing to pay for consulting services if they are offered) might also be helpful. Related to that, some sort of EA wide survey of what consultants orgs need and will pay for might help to catalyse the development of a market. I wonder if RP could do something like that in the next survey round?
RP and others offering incubation support and grants might also help. The EA infrastructure fund drive probably helps but most people still don’t know much about how to set up and run an organisation. I think that charity entrepreneurship has a good model to learn from in that regard. You get in, you learn, then if it goes well you will usually get funded.
To give some context: I am one of the people who set up READI in 2019 to potentially provide behavioural/social science research support and consulting services related to pressing social issues. Our most notable so far is probably the SCRUB project which has been funded (through BehaviourWorks Australia, where three of us work) by the government for over a year. We have also finished two literature reviews on promoting philanthropy and reducing animal product consumption, both of which are in review for journals.
My experience with that has been that it isn’t easy to know what EA orgs want and would pay for without reaching out directly, which is a lot of effort for full time professionals and also quite low efficiency. It’s also hard to know how to effectively structure and run such an org. Hence many of the ideas above.
My guess is that this is going to be a bit difficult. My impression is that the needs EA organizations know they have are fairly specific; they look like “really great research into key questions”, or sometimes very tactical things like, “bookkeeping” or simple website development. “Consultant” is a really broad class of thing and really needs to be narrowed down in conversation.
Generally, organizations don’t have that much time to experiment with non-obvious contractor arrangements. This includes time brainstorming ways they might be useful. If one is having a lot of trouble getting integrated (as a possible contractor), the best method I know of is to just work in one of these organizations for a while and develop a close understanding, or perhaps try to write blog posts on topics that are really useful to these groups and see if these pick up.
Around having things like a directory, I expect the ones to work will be more narrow. There are a few smaller “contractor hubs” around; or “talent agencies”, that assist with hiring contractors and charge some fee on top. I think this is a pretty good model for low-level work, and I’d like to see more of it. It does require people with either really good understandings of EA needs (or the relationships), or really good ability to do some super-obviously useful problems (like accounting).
If anyone is interested in doing consulting, one easy way to indicate so would be by just posting in a comment in this thread, or there could be a new thread for such work.
Some advanced market commitments (i.e., organisations publicly committing to pay for consulting services if they are offered) might also be helpful.
My guess is that this would be a tough sell, but I appreciate the idea.
The EA infrastructure probably helps but most people don’t know much about how to set up and run an organisation
One (small) positive is that I think contractor setups can be some of the easiest to get started with. If you’re just doing contracting with yourself, and maybe one other person, you don’t even need to set up a formal business, you could just do it directly. The big challenges are in finding clients and providing value. You don’t need much scale at first. But those things are challenges.
I imagine it could be considered nice for organizations to hire more new contractors than would otherwise make sense, as that would be effectively subsidizing the industry.
Thanks Ozzy, that’s useful. I don’t have time to respond in full or say much more, but I will mention:
After reflection I still think that the catalyst needs to be something that solves the coincidence of wants issue (i.e., consultants don’t know who would hire them if they took the time to advertise and work in this space and orgs don’t know who they can hire or if it would go well).
I think that next steps that could help could be as simple as i) someone creating something like this for consultants in EA and posting about it on the forum when filled and ii) the next time someone does a survey of EA leaders they could ask them to benchmark how much more they to spend annually on consultants if they had the talent available, and for what exactly, then share that on the forum also.
I think that you go narrower after the first two steps are done as right now we don’t have much to work with. Though maybe Luke’s suggestions are evidence enough to form narrow directories in those areas, or to have them as ‘specialisations’ in the initial database?
I think that a talent agency is a great idea. I can imagine a ‘head-hunter/recruiter’ with contacts across both the organisations and the consulting networks would help to accelerate things.
Agree that working in existing orgs is a good idea for potential org founders. I am warming more to the RP incubator idea!
I agree that doing things as a sole contractor is probably easier but that’s also a lot more stressful for many people as you assume full responsibility for the work and need to be across all of the accounting and other aspects. It’s probably got some of the issues of being a sole founder in that it asks a lot of one person. It probably works well in a lot of cases though.
RP and others offering incubation support and grants might also help. The EA infrastructure fund drive probably helps but most people still don’t know much about how to set up and run an organisation. I think that charity entrepreneurship has a good model to learn from in that regard. You get in, you learn, then if it goes well you will usually get funded. [emphasis added]
Actually, this makes me think, maybe it would be great if Charity Entrepreneurship’s next “round” was focused on EA consultancies, rather than on a particular cause area? Their usual process seems potentially well-suited to this; they can survey relevant stakeholders regarding what needs exist and what might be best for filling them, do some additional shallow investigation of various ideas like those listed in Luke’s post, then attract people and help them set these things up.
At first glance, it seems at least plausible that:
an EA funder would be happy to fund this whole process
this process would result in, say, ~3 orgs that will provide a fair amount of value at good cost-effectiveness for at least 2 years, & 1 org that might eventually grow up to be something kinda like RP.
Maybe I’ll contact CE to see what they think. I’d also be interested to hear if anyone thinks this would be a bad idea for some reason.
(I also think people applying to EA Funds, trying to learn from or get advice from RP, and/or trying to get funding and support in other ways would be good. But I agree that this won’t always be “enough”.)
Edit: Someone downvoted this, which seems reasonable if they mean to say “I do think that this would be a bad idea”, but then I’d be quite interested to hear why they think so.
I really like this idea, as you might have guessed. The best solution of all probably involves RP working in collaboration with CE where you merge RP’s experience of consulting for EA orgs with CE’s ability for training up new people to set up organisations. I think that RP could also think about how to i) get more people in to learn about their processes and ii) how to support those people to take that knowledge and found new research organisation that focus on different regions, topics or methods but can keep much of the prior learning
Re: reluctance. Can you say more about the concern about donor perceptions? E.g. maybe grantmakers like me should be more often nudging grantees with questions like “How could you get more done / move faster by outsourcing some work to consultants/contractors?” I’ve done that in a few cases but haven’t made a consistent effort to signal willingness to fund subcontracts.
What do you mean about approval from a few parties? Is it different than other expenditures?
Re: university rules. Yes, very annoying. BERI is trying to help with that, and there could be more BERIs.
Re: “isolated to Open Phil.” Agree that the consultancy model doesn’t help much if in practice there’s only one client, or just a few — hence my attempt (mostly in the footnotes) to get some sense of how much demand there is for these services outside Open Phil. Of course, with Open Phil being the largest funder in the EA space, many potential clients of EA consultancies are themselves in part funded by Open Phil, but that doesn’t seem too problematic so long as Open Phil isn’t institutionally opposed to subgranting/subcontracting.
(Even within Open Phil, a bit of robustness could come from multiple teams demanding a particular genre of services, e.g. at least 3 pretty independent teams at Open Phil have contracted Rethink Priorities for analysis work. But still much safer for contractors if there are several truly independent clients.)
Re: prices. Seems like an education issue. If you find you need additional validation for the fact that contractors have good reasons for costing ~1.3x to 2x as much as an employee per hour worked, feel free to point people to this comment. :)
Re: subsidizing. Yes, this would be interesting to think more about. There’s even a model like Founders Pledge and Longview where donors fund the service entirely and then the consultant provides the services for free to clients (in this case, donor services to founders and high-net-worth individuals).
I’m struggling to parse “Many contractors that organizations themselves come from those organizations.” Could you rephrase?
Definitely agree that understanding the internal needs of clients is difficult. Speaking from the side of someone trying to communicate my needs/desires to various grantees and consultants, it also feels difficult on this end of things. This difficulty is often a major reason to do something in-house even if it would in theory be simpler and more efficient to outsource. E.g. it’s a major part of why Open Phil as built a “worldview investigations” team: it’s sort-of weird to have a think tank within a grantmaker instead of just funding external think tanks, but it was too hard to communicate to external parties exactly what we needed to make our funding decisions, so the only way forward was to hire that talent internally so we could build up more shared context etc. with the people doing that work. That was very expensive in staff time, but ultimately the only way to get what we needed. But in other cases it should be possible (and has been possible) for clients to communicate what they need to consultants. One person I spoke to recently suggested that programs like RSP could be a good complement to consultancy work because it allows more people to hang out and gain context on how potential future clients (in that case FHI, but also sort-of “veteran hardcore longtermists in general”) think about things and what they need.
I found this post and the comments very interesting, and I’d be excited to see more people doing the sort of things suggested in this post.
That said, there’s one point of confusion that remains for me, which is somewhat related to the point that “Right now the market for large EA consulting seems very isolated to OpenPhil”. In brief, the confusion is something like “I agree that there is sufficient demand for EA consultancies. But a large enough fraction of that demand is from Open Phil that it seems unclear why Open Phil wouldn’t instead or also do more in-house hiring.”
I think the resolution of this mystery is something like:
Really Open Phil should and plans to do both (a) more in-house hiring and (b) more encouragement and contracting of EA consultancies, but this post just emphasises one half of that
There are many reasons why Open Phil doesn’t want to just hire more people in-house, and “our needs change over time, so we can’t make a commitment that there’s much future work of a particular sort to be done within our organizations” is actually a smaller part of that than this post (to me) implies
The rest of this comment just explains my confusion a bit more, and may be worth skipping.
The post says:
EA organizations like Open Phil and CEA could do a lot more if we had access to more analysis and more talent, but for several reasons we can’t bring on enough new staff to meet these needs ourselves, e.g. because our needs change over time, so we can’t make a commitment that there’s much future work of a particular sort to be done within our organizations
[...] This system works because even though demand for these services can fluctuate rapidly at each individual client, in aggregate across many clients there is a steady demand for the consultancies’ many full-time employees, and there is plenty of useful but less time-sensitive work for them to do between client requests. [emphasis added]
But then elsewhere you (Luke) write things like:
If their current typical level of analysis quality can be maintained, I would like to see RP scale as quickly as they can.
And:
If this was feasible to do while maintaining quality, I’d probably want to commission enough ongoing analysis from RP on AI governance research questions alone to sustain >10 FTEs there.
And:
(Even within Open Phil, a bit of robustness could come from multiple teams demanding a particular genre of services, e.g. at least 3 pretty independent teams at Open Phil have contracted Rethink Priorities for analysis work. But still much safer for contractors if there are several truly independent clients.)
In light of this and other things, I guess it seems to me like Open Phil is big enough, RP researchers are generalist enough (or are sufficiently interested and capable in multiple Open Phil focus areas), and demand will continue to remain high enough that it seems like it also could really make sense for Open Phil to hire more people who are roughly like RP researchers.
It seems one could’ve in the past predicted, or at least can now predict, that some RP researchers will continue to be in demand by someone at Open Phil, for some project,for at least few years, which implies that they or similar people could also be hired in-house.
(I’m not saying such people should be hired in-house by Open Phil. I think the current set up is also working well, hence me choosing to work at RP and being excited about RP trying to scale its longtermist work relatively rapidly. It’s just that this makes me think that “our needs change over time, so we can’t make a commitment that there’s much future work of a particular sort to be done within our organizations” isn’t really as large a cause of the rationale for EA consultancies as this post seems to me to imply?)
Yes, there are several reasons why Open Phil is reluctant to hire in-house talent in many cases, hence the “e.g.” before “because our needs change over time, so we can’t make a commitment that there’s much future work of a particular sort to be done within our organizations.”
I actually think there is more widespread EA client demand (outside OP) for EA consulting of the types listed in this post than the post itself represents, because there were several people who gave me feedback on the post and said something like “This is great, I think my org has lots of demand for several of these services if they can be provided to a sufficient quality level, but please don’t quote me on that because I haven’t thought hard enough about this and don’t want people to become over-enthusiastic about this on the basis of my OTOH reaction.” Perhaps I should’ve mentioned this in the original post.
Re: reluctance. Can you say more about the concern about donor perceptions? E.g. maybe grantmakers like me should be more often nudging grantees with questions like “How could you get more done / move faster by outsourcing some work to consultants/contractors?” I’ve done that in a few cases but haven’t made a consistent effort to signal willingness to fund subcontracts.
Contractors are known to be pricey and have a bit of a bad reputation in some circles. Research hires have traditionally been dirt cheap (though that is changing). I think if an org spends 10-30% of its budget on contractors, it would be treated with suspicion. It feels like a similar situation to how a lot of charities tried to have insanely low overheads (and many outside EA still do).
I think that grantmakers / influential figureheads making posts like yours above, and applying some pressure, could go a long way here. It should be obvious to the management of the nonprofit that the funders won’t view them poorly if they spend a fair bit on contractors, even if sometimes this results in failures. (Contract work can be risky for clients, though perhaps less risky than hiring.)
What do you mean about approval from a few parties? Is it different than other expenditures?
At many orgs, regular expenditures can be fairly annoying. Contracting engagements can be more expensive and more unusual, so new arrangements have to sometimes be figured out. I’ve had some issues around hiring contractors myself in previous startups for a similar reason. The founders would occasionally get cold-feet, sometimes after I agreed to an arrangement with a contractor.
doesn’t seem too problematic so long as Open Phil isn’t institutionally opposed to subgranting/subcontracting
I agree. The main thing for contractors is the risk of loss of opportunities. So if there were multiple possible clients funded by one group, but each makes separate decisions, and that one group is unlikely to stop funding all of those subgroups at once, things should be fine.
Re: prices. Seems like an education issue.
Agreed
I’m struggling to parse “Many contractors that organizations themselves come from those organizations.” Could you rephrase?
Sorry, this was vague. I meant cases where: 1) Person A is employed at Organization B. 2) Person A leaves employment. 3) Person A later (or immediately) joins Organization B as a contractor.
I’ve done this before. The big benefit is that person A has established a relationship with Organization B, so this relationship continues to do a lot of work (similar to what you describe).
One person I spoke to recently suggested that programs like RSP could be a good complement to consultancy work because it allows more people to hang out and gain context on how potential future clients
Yep, this is what I was thinking about above in point (3) on the bottom. Having more methods to encourage interaction seem good. There’s been a bit of discussion of having more coworking between longtermists in the Bay Area for example; the more we have things like that, the better I’d expect things to be. (Both because of the direct connections, and the fact that it could make it much easier to integrate more people, particularly generalists)
When you have only one client, being an employee is generally a better deal than being a contractor (with the exception that sometimes they pay significantly more to compensate). See the recent ridesharing contractor debate as an example.
i think that depends hugely on the industry. in software, where i work, everyone i know who is a freelancer prefers to stay that way, even if they work for an extended period for just one customer, and german law (which puts up a number of rules about contractors working for a single customer) is seen as a nuisance by them (though it’s no doubt good for contractors who have less negotiating power).
I’ve been thinking a bit about EA consultancy solutions for a while. A few thoughts:
1. I think many EA orgs are much more resistant to outsourcing large amounts of work than they should be. I’ve had a surprising amount of trouble getting groups to pay even token amounts of Guesstimate, a few years back, and have seen other groups refrain from making payments. This seems due to multiple reasons: they often aren’t sure how their donors would view this (often somewhat expensive) spending, this sort of spending often needs approval from a few parties, and in many situations it just isn’t allowed (University rules).
2. Right now the market for large EA consulting seems very isolated to OpenPhil. If this is the case, I imagine the value proposition is precarious to the contractors. Often the main benefit to hiring a contractor over an employee is the ease of firing/ending contracts, but this is obviously quite undesired by the contractor. When you have only one client, being an employee is generally a better deal than being a contractor (with the exception that sometimes they pay significantly more to compensate). See the recent ridesharing contractor debate as an example.
3. As mentioned in (2), generally the way that contractors work is that they cost a fair bit (~1.3x to 2x) more than an employee per hour worked. This is because they need to also pay for work benefits, the time between jobs, and the costs of finding new work. As long as all parties are fine with this, this can work, but it’s something to be aware of. I think a lot of organizations balk when they see contractor prices for most kinds of work they’re not used to.
If we’d like to move in the direction of an “Effective Altruist Economy/Market”, some things that might help kickstart this would be:
1. Setting expectations that contractors will cost money, but are often a good move, all things considered. I imagine it could eventually become common knowledge that contracting relationships are often worthwhile. This would prevent the awkwardness around funders seeing big contractor line-items.
2. Subsidizing contractor rates to small or medium sized client organizations. Like, EA Funds pays out $0.40 for each $1 paid to a contractor by one of these organizations, for research work. In theory there could be some sort of quadratic funding setup for group purchased.
3. Many contractors that organizations themselves come from those organizations. In general, having better systems to facilitate engagement with core Effective Altruists and promising other people will lead to better understandings of needs, which will enable more new consulting groups. I think that understanding the internal needs is really important, but also very difficult.
Thanks Ozzie, these are good suggestions. To add some thoughts: I think we may benefit from someone building a directory of aspiring freelance consultants .This can help solve coincidence of wants issues (i.e., knowing who wants to hire/be hired) and help provide the scale and critical mass needed for many person consultancies to form and grow.
It would need to be low effort as now many potential consultants are doing very well in their work lives and don’t really have time to engage with EA groups and organisations. Even something like this which we have for the behaviour science community would be a big help to start. https://www.eac-network.com/ might be worth contacting as they could be good people to lead something.
Some advanced market commitments (i.e., organisations publicly committing to pay for consulting services if they are offered) might also be helpful. Related to that, some sort of EA wide survey of what consultants orgs need and will pay for might help to catalyse the development of a market. I wonder if RP could do something like that in the next survey round?
RP and others offering incubation support and grants might also help. The EA infrastructure fund drive probably helps but most people still don’t know much about how to set up and run an organisation. I think that charity entrepreneurship has a good model to learn from in that regard. You get in, you learn, then if it goes well you will usually get funded.
To give some context: I am one of the people who set up READI in 2019 to potentially provide behavioural/social science research support and consulting services related to pressing social issues. Our most notable so far is probably the SCRUB project which has been funded (through BehaviourWorks Australia, where three of us work) by the government for over a year. We have also finished two literature reviews on promoting philanthropy and reducing animal product consumption, both of which are in review for journals.
My experience with that has been that it isn’t easy to know what EA orgs want and would pay for without reaching out directly, which is a lot of effort for full time professionals and also quite low efficiency. It’s also hard to know how to effectively structure and run such an org. Hence many of the ideas above.
Hi Peter,
Thanks for the ideas here.
My guess is that this is going to be a bit difficult. My impression is that the needs EA organizations know they have are fairly specific; they look like “really great research into key questions”, or sometimes very tactical things like, “bookkeeping” or simple website development. “Consultant” is a really broad class of thing and really needs to be narrowed down in conversation.
Generally, organizations don’t have that much time to experiment with non-obvious contractor arrangements. This includes time brainstorming ways they might be useful. If one is having a lot of trouble getting integrated (as a possible contractor), the best method I know of is to just work in one of these organizations for a while and develop a close understanding, or perhaps try to write blog posts on topics that are really useful to these groups and see if these pick up.
Around having things like a directory, I expect the ones to work will be more narrow. There are a few smaller “contractor hubs” around; or “talent agencies”, that assist with hiring contractors and charge some fee on top. I think this is a pretty good model for low-level work, and I’d like to see more of it. It does require people with either really good understandings of EA needs (or the relationships), or really good ability to do some super-obviously useful problems (like accounting).
If anyone is interested in doing consulting, one easy way to indicate so would be by just posting in a comment in this thread, or there could be a new thread for such work.
My guess is that this would be a tough sell, but I appreciate the idea.
One (small) positive is that I think contractor setups can be some of the easiest to get started with. If you’re just doing contracting with yourself, and maybe one other person, you don’t even need to set up a formal business, you could just do it directly. The big challenges are in finding clients and providing value. You don’t need much scale at first. But those things are challenges.
I imagine it could be considered nice for organizations to hire more new contractors than would otherwise make sense, as that would be effectively subsidizing the industry.
Thanks Ozzy, that’s useful. I don’t have time to respond in full or say much more, but I will mention:
After reflection I still think that the catalyst needs to be something that solves the coincidence of wants issue (i.e., consultants don’t know who would hire them if they took the time to advertise and work in this space and orgs don’t know who they can hire or if it would go well).
I think that next steps that could help could be as simple as i) someone creating something like this for consultants in EA and posting about it on the forum when filled and ii) the next time someone does a survey of EA leaders they could ask them to benchmark how much more they to spend annually on consultants if they had the talent available, and for what exactly, then share that on the forum also.
I think that you go narrower after the first two steps are done as right now we don’t have much to work with. Though maybe Luke’s suggestions are evidence enough to form narrow directories in those areas, or to have them as ‘specialisations’ in the initial database?
I think that a talent agency is a great idea. I can imagine a ‘head-hunter/recruiter’ with contacts across both the organisations and the consulting networks would help to accelerate things.
Agree that working in existing orgs is a good idea for potential org founders. I am warming more to the RP incubator idea!
I agree that doing things as a sole contractor is probably easier but that’s also a lot more stressful for many people as you assume full responsibility for the work and need to be across all of the accounting and other aspects. It’s probably got some of the issues of being a sole founder in that it asks a lot of one person. It probably works well in a lot of cases though.
Hi Peter,
I already created a directory for EA aligned consultants.
Best,
Jona
Excellent! Sorry, I didn’t know about this. I will promote it to a few relevant people.
Actually, this makes me think, maybe it would be great if Charity Entrepreneurship’s next “round” was focused on EA consultancies, rather than on a particular cause area? Their usual process seems potentially well-suited to this; they can survey relevant stakeholders regarding what needs exist and what might be best for filling them, do some additional shallow investigation of various ideas like those listed in Luke’s post, then attract people and help them set these things up.
At first glance, it seems at least plausible that:
an EA funder would be happy to fund this whole process
this process would result in, say, ~3 orgs that will provide a fair amount of value at good cost-effectiveness for at least 2 years, & 1 org that might eventually grow up to be something kinda like RP.
Maybe I’ll contact CE to see what they think. I’d also be interested to hear if anyone thinks this would be a bad idea for some reason.
(I also think people applying to EA Funds, trying to learn from or get advice from RP, and/or trying to get funding and support in other ways would be good. But I agree that this won’t always be “enough”.)
Edit: Someone downvoted this, which seems reasonable if they mean to say “I do think that this would be a bad idea”, but then I’d be quite interested to hear why they think so.
I really like this idea, as you might have guessed. The best solution of all probably involves RP working in collaboration with CE where you merge RP’s experience of consulting for EA orgs with CE’s ability for training up new people to set up organisations. I think that RP could also think about how to i) get more people in to learn about their processes and ii) how to support those people to take that knowledge and found new research organisation that focus on different regions, topics or methods but can keep much of the prior learning
.
Thanks for your thoughtful comment!
Re: reluctance. Can you say more about the concern about donor perceptions? E.g. maybe grantmakers like me should be more often nudging grantees with questions like “How could you get more done / move faster by outsourcing some work to consultants/contractors?” I’ve done that in a few cases but haven’t made a consistent effort to signal willingness to fund subcontracts.
What do you mean about approval from a few parties? Is it different than other expenditures?
Re: university rules. Yes, very annoying. BERI is trying to help with that, and there could be more BERIs.
Re: “isolated to Open Phil.” Agree that the consultancy model doesn’t help much if in practice there’s only one client, or just a few — hence my attempt (mostly in the footnotes) to get some sense of how much demand there is for these services outside Open Phil. Of course, with Open Phil being the largest funder in the EA space, many potential clients of EA consultancies are themselves in part funded by Open Phil, but that doesn’t seem too problematic so long as Open Phil isn’t institutionally opposed to subgranting/subcontracting.
(Even within Open Phil, a bit of robustness could come from multiple teams demanding a particular genre of services, e.g. at least 3 pretty independent teams at Open Phil have contracted Rethink Priorities for analysis work. But still much safer for contractors if there are several truly independent clients.)
Re: prices. Seems like an education issue. If you find you need additional validation for the fact that contractors have good reasons for costing ~1.3x to 2x as much as an employee per hour worked, feel free to point people to this comment. :)
Re: subsidizing. Yes, this would be interesting to think more about. There’s even a model like Founders Pledge and Longview where donors fund the service entirely and then the consultant provides the services for free to clients (in this case, donor services to founders and high-net-worth individuals).
I’m struggling to parse “Many contractors that organizations themselves come from those organizations.” Could you rephrase?
Definitely agree that understanding the internal needs of clients is difficult. Speaking from the side of someone trying to communicate my needs/desires to various grantees and consultants, it also feels difficult on this end of things. This difficulty is often a major reason to do something in-house even if it would in theory be simpler and more efficient to outsource. E.g. it’s a major part of why Open Phil as built a “worldview investigations” team: it’s sort-of weird to have a think tank within a grantmaker instead of just funding external think tanks, but it was too hard to communicate to external parties exactly what we needed to make our funding decisions, so the only way forward was to hire that talent internally so we could build up more shared context etc. with the people doing that work. That was very expensive in staff time, but ultimately the only way to get what we needed. But in other cases it should be possible (and has been possible) for clients to communicate what they need to consultants. One person I spoke to recently suggested that programs like RSP could be a good complement to consultancy work because it allows more people to hang out and gain context on how potential future clients (in that case FHI, but also sort-of “veteran hardcore longtermists in general”) think about things and what they need.
(Personal views only)
I found this post and the comments very interesting, and I’d be excited to see more people doing the sort of things suggested in this post.
That said, there’s one point of confusion that remains for me, which is somewhat related to the point that “Right now the market for large EA consulting seems very isolated to OpenPhil”. In brief, the confusion is something like “I agree that there is sufficient demand for EA consultancies. But a large enough fraction of that demand is from Open Phil that it seems unclear why Open Phil wouldn’t instead or also do more in-house hiring.”
I think the resolution of this mystery is something like:
Really Open Phil should and plans to do both (a) more in-house hiring and (b) more encouragement and contracting of EA consultancies, but this post just emphasises one half of that
There are many reasons why Open Phil doesn’t want to just hire more people in-house, and “our needs change over time, so we can’t make a commitment that there’s much future work of a particular sort to be done within our organizations” is actually a smaller part of that than this post (to me) implies
Some other reasons are discussed in Reflections on Our 2018 Generalist Research Analyst Recruiting and somewhere in Holden Karnofsky (Open Philanthropy) | EA Global: Reconnect 2021 (I can’t remember the relevant time stamp, unfortunately)
Does that sound right to you?
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The rest of this comment just explains my confusion a bit more, and may be worth skipping.
The post says:
But then elsewhere you (Luke) write things like:
And:
And:
In light of this and other things, I guess it seems to me like Open Phil is big enough, RP researchers are generalist enough (or are sufficiently interested and capable in multiple Open Phil focus areas), and demand will continue to remain high enough that it seems like it also could really make sense for Open Phil to hire more people who are roughly like RP researchers.
It seems one could’ve in the past predicted, or at least can now predict, that some RP researchers will continue to be in demand by someone at Open Phil, for some project, for at least few years, which implies that they or similar people could also be hired in-house.
(I’m not saying such people should be hired in-house by Open Phil. I think the current set up is also working well, hence me choosing to work at RP and being excited about RP trying to scale its longtermist work relatively rapidly. It’s just that this makes me think that “our needs change over time, so we can’t make a commitment that there’s much future work of a particular sort to be done within our organizations” isn’t really as large a cause of the rationale for EA consultancies as this post seems to me to imply?)
A couple quick replies:
Yes, there are several reasons why Open Phil is reluctant to hire in-house talent in many cases, hence the “e.g.” before “because our needs change over time, so we can’t make a commitment that there’s much future work of a particular sort to be done within our organizations.”
I actually think there is more widespread EA client demand (outside OP) for EA consulting of the types listed in this post than the post itself represents, because there were several people who gave me feedback on the post and said something like “This is great, I think my org has lots of demand for several of these services if they can be provided to a sufficient quality level, but please don’t quote me on that because I haven’t thought hard enough about this and don’t want people to become over-enthusiastic about this on the basis of my OTOH reaction.” Perhaps I should’ve mentioned this in the original post.
Contractors are known to be pricey and have a bit of a bad reputation in some circles. Research hires have traditionally been dirt cheap (though that is changing). I think if an org spends 10-30% of its budget on contractors, it would be treated with suspicion. It feels like a similar situation to how a lot of charities tried to have insanely low overheads (and many outside EA still do).
I think that grantmakers / influential figureheads making posts like yours above, and applying some pressure, could go a long way here. It should be obvious to the management of the nonprofit that the funders won’t view them poorly if they spend a fair bit on contractors, even if sometimes this results in failures. (Contract work can be risky for clients, though perhaps less risky than hiring.)
At many orgs, regular expenditures can be fairly annoying. Contracting engagements can be more expensive and more unusual, so new arrangements have to sometimes be figured out. I’ve had some issues around hiring contractors myself in previous startups for a similar reason. The founders would occasionally get cold-feet, sometimes after I agreed to an arrangement with a contractor.
I agree. The main thing for contractors is the risk of loss of opportunities. So if there were multiple possible clients funded by one group, but each makes separate decisions, and that one group is unlikely to stop funding all of those subgroups at once, things should be fine.
Agreed
Sorry, this was vague. I meant cases where:
1) Person A is employed at Organization B.
2) Person A leaves employment.
3) Person A later (or immediately) joins Organization B as a contractor.
I’ve done this before. The big benefit is that person A has established a relationship with Organization B, so this relationship continues to do a lot of work (similar to what you describe).
Yep, this is what I was thinking about above in point (3) on the bottom. Having more methods to encourage interaction seem good. There’s been a bit of discussion of having more coworking between longtermists in the Bay Area for example; the more we have things like that, the better I’d expect things to be. (Both because of the direct connections, and the fact that it could make it much easier to integrate more people, particularly generalists)
i think that depends hugely on the industry. in software, where i work, everyone i know who is a freelancer prefers to stay that way, even if they work for an extended period for just one customer, and german law (which puts up a number of rules about contractors working for a single customer) is seen as a nuisance by them (though it’s no doubt good for contractors who have less negotiating power).