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)
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?
---
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)