I feel that changing the nature of the Maximum Impact Fund in this way should come with a renaming of the fund, since it is now no longer going all-out on expected value; whereas before it was “maximizing” expected “impact”, it’s no longer doing that. And many donors have come to expect that the MIF is the go-to for high EV donation, and will not notice this change.
Something like the ‘Top Charities Fund’ or ‘High Impact Fund’ flags the fundamental change, and is a bit less misleading.
Thanks for your feedback! We considered renaming the Maximum Impact Fund in the lead-up to these changes, but decided not to in the end. The Maximum Impact Fund has been a popular giving option that’s attracted a lot of new donors; we wanted to err on the side of not confusing these newer donors, who we believe associated this fund with high confidence rather than with high expected value, despite the name. For those like you who follow our work more closely, we expected the risk of confusion would be lower: we thought they’d be more likely to understand the differences in the funds and find it relatively straightforward to make the switch to supporting All Grants versus the Maximum Impact Fund, if their priority was high expected value.
All that said, while this was a considered decision, we recognize that it might not have been the right one. Part of our reason for introducing the All Grants Fund was to help clarify our giving options for donors, and it’d obviously be bad if keeping the Maximum Impact Fund’s name were introducing more confusion than clarity. We appreciate your feedback about this, and we’ll certainly think about whether this decision merits revisiting!
Similar thoughts crossed my mind (including the thanks!).
For a donor whose values are closely aligned with GiveWell’s and who trusts them to spend wisely on operations, it seems like an unrestricted donation might actually have the highest expected impact.
But it also seems like there’s potentially a funging “cascade” across the different options such that marginal donations would be equivalent under certain circumstances, depending on details like the Excess Assets Policy.
It is a bit tricky to compare expected impact across the various funds. The tl;dr answer, without putting any real calculations into it, is that in practice, we don’t expect there to be large differences. But theoretically there could be, and if you can give unrestricted or less restricted (assuming you trust GiveWell), that’s probably better, as it allows us to deploy funding where it will be most impactful. Here are a few points to consider.
Because a large portion of our funding is either technically unrestricted or flexible, we think that in practice, it’s unlikely that our grantmaking to top charities or non–top charity programs will be constrained by the proportion of funding we receive for the Maximum Impact vs. All Grants fund. A lot of our funding comes from Open Philanthropy as flexible funding intended for grantmaking (so, very similar to funding from the All Grants Fund); this typically has gone to a mix of top charities and other programs. We also receive enough unrestricted funding nowadays that some of it ends up getting granted out, due to the excess assets policy you mention, as well as our single-donor cap, which prevents one donor from providing too much of our operating support (more here). In 2021, the vast majority of our grants from unrestricted funding went to top charities, and indeed the majority of our grant funding in general goes to top charities—as mentioned in the above post, we think that the ratio this year will be about 3:1 (based on the pipeline of opportunities we’re looking at right now, not on any rules or proclivities).
Though we will use the All Grants Fund to support some opportunities that are higher-expected-value than our top charities, we wouldn’t predict that the All Grants Fund will be systematically higher in expected value than the Maximum Impact Fund. We are using the same cost-effectiveness bar for grants from both funds, and many of our grants to non–top charity programs are similar in cost-effectiveness to—not greatly more cost-effective than—our top charities.
Three, with all of the above said, we agree with your suggestion that the most impactful way to give to GiveWell, assuming you trust our decision-making, is unrestricted. There could be a world in which we get way, way more Maximum Impact Fund donations than All Grants Fund donations, and because we’re compelled to spend the former on top charities, we end up funding still-excellent-but-less-cost-effective opportunities from those charities (say, 8x cash rather than 10x) and have to raise our bar for granting to other programs to, say, 12x because we’re flexible funding–constrained. We don’t think that’s going to happen because in reality, as noted above, a lot of our funding is flexible. But giving to us unrestricted (or restricted to grantmaking only, through the All Grants Fund) means that we can shift funding around as needed such that we’re maximizing the overall impact of our portfolio. The Maximum Impact Fund, however, remains our top recommendation for donors who want to be assured that their donation goes toward high-impact/high-confidence opportunities, versus the riskier options that might be funded via the All Grants Fund.
Thanks for all you do.
I feel that changing the nature of the Maximum Impact Fund in this way should come with a renaming of the fund, since it is now no longer going all-out on expected value; whereas before it was “maximizing” expected “impact”, it’s no longer doing that. And many donors have come to expect that the MIF is the go-to for high EV donation, and will not notice this change.
Something like the ‘Top Charities Fund’ or ‘High Impact Fund’ flags the fundamental change, and is a bit less misleading.
What about “Direct Impact Fund”?
Hi, David(s),
Thanks for your feedback! We considered renaming the Maximum Impact Fund in the lead-up to these changes, but decided not to in the end. The Maximum Impact Fund has been a popular giving option that’s attracted a lot of new donors; we wanted to err on the side of not confusing these newer donors, who we believe associated this fund with high confidence rather than with high expected value, despite the name. For those like you who follow our work more closely, we expected the risk of confusion would be lower: we thought they’d be more likely to understand the differences in the funds and find it relatively straightforward to make the switch to supporting All Grants versus the Maximum Impact Fund, if their priority was high expected value.
All that said, while this was a considered decision, we recognize that it might not have been the right one. Part of our reason for introducing the All Grants Fund was to help clarify our giving options for donors, and it’d obviously be bad if keeping the Maximum Impact Fund’s name were introducing more confusion than clarity. We appreciate your feedback about this, and we’ll certainly think about whether this decision merits revisiting!
Best, Miranda
Similar thoughts crossed my mind (including the thanks!).
For a donor whose values are closely aligned with GiveWell’s and who trusts them to spend wisely on operations, it seems like an unrestricted donation might actually have the highest expected impact.
But it also seems like there’s potentially a funging “cascade” across the different options such that marginal donations would be equivalent under certain circumstances, depending on details like the Excess Assets Policy.
I’d be very interested in an in-depth comparison of the different options for giving through GiveWell in terms of expected impact, funging, optimizer’s curse, value alignment etc.
Hi, Andrew,
Apologies for the delay in responding!
It is a bit tricky to compare expected impact across the various funds. The tl;dr answer, without putting any real calculations into it, is that in practice, we don’t expect there to be large differences. But theoretically there could be, and if you can give unrestricted or less restricted (assuming you trust GiveWell), that’s probably better, as it allows us to deploy funding where it will be most impactful. Here are a few points to consider.
Because a large portion of our funding is either technically unrestricted or flexible, we think that in practice, it’s unlikely that our grantmaking to top charities or non–top charity programs will be constrained by the proportion of funding we receive for the Maximum Impact vs. All Grants fund. A lot of our funding comes from Open Philanthropy as flexible funding intended for grantmaking (so, very similar to funding from the All Grants Fund); this typically has gone to a mix of top charities and other programs. We also receive enough unrestricted funding nowadays that some of it ends up getting granted out, due to the excess assets policy you mention, as well as our single-donor cap, which prevents one donor from providing too much of our operating support (more here). In 2021, the vast majority of our grants from unrestricted funding went to top charities, and indeed the majority of our grant funding in general goes to top charities—as mentioned in the above post, we think that the ratio this year will be about 3:1 (based on the pipeline of opportunities we’re looking at right now, not on any rules or proclivities).
Though we will use the All Grants Fund to support some opportunities that are higher-expected-value than our top charities, we wouldn’t predict that the All Grants Fund will be systematically higher in expected value than the Maximum Impact Fund. We are using the same cost-effectiveness bar for grants from both funds, and many of our grants to non–top charity programs are similar in cost-effectiveness to—not greatly more cost-effective than—our top charities.
Three, with all of the above said, we agree with your suggestion that the most impactful way to give to GiveWell, assuming you trust our decision-making, is unrestricted. There could be a world in which we get way, way more Maximum Impact Fund donations than All Grants Fund donations, and because we’re compelled to spend the former on top charities, we end up funding still-excellent-but-less-cost-effective opportunities from those charities (say, 8x cash rather than 10x) and have to raise our bar for granting to other programs to, say, 12x because we’re flexible funding–constrained. We don’t think that’s going to happen because in reality, as noted above, a lot of our funding is flexible. But giving to us unrestricted (or restricted to grantmaking only, through the All Grants Fund) means that we can shift funding around as needed such that we’re maximizing the overall impact of our portfolio. The Maximum Impact Fund, however, remains our top recommendation for donors who want to be assured that their donation goes toward high-impact/high-confidence opportunities, versus the riskier options that might be funded via the All Grants Fund.
I hope that’s somewhat helpful!
Best,
Miranda