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.
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