A non-profit does not have the same cash flow or sources of income and this may require a different size reserve fund.
Not trying to “trip you up”, but you said your org had “far less income”—surely you know that reserve size is inherently correlated with income.
Under the current circumstances, many EA organizations are larger in scope (and I think more important) than they appear. For CEA, for example, there’s over 100 community groups to operationally/financially support! This growth is recent.
There’s probably more going on too that can’t easily be written about—CEA recently returned ~$50M (in expected? cashflow) to a major funder.
All this produces a soup on the books. Accounting is important and powerful but to amateurs or prejudice, I think it’s easy to produce noise.
The truth is that it’s hard to determine whether you are correct or not.
However, in what I think is a neutral statement, that is neither friendly nor unfriendly to you: based on your other comments, I’m skeptical of your judgement and attitude.
Maybe what is motivating you is principled negatives views on CEA’s activities. If that is the case, maybe it might work better to make that case directly (maybe with a new throwaway).
P.S : Uh, “patient Longtermism” might be a little upsetting to you.
CEA recently returned ~$50M (in expected? cashflow) to a major funder.
Is there anything publicly accessible about this? I’m really interested in the current funding landscape, and how that would impact the marginal value of donations in vs outside of EA
I’m really interested in the current funding landscape, and how that would impact the marginal value of donations in vs outside of EA
So first of all, it’s good to tap the brakes here on my comments I’m making in this thread. It’s not clear I’m remotely informed or know anything about EA, much less informed about CEA.
For all we know, I got rejected from the recent EAG and there’s pictures of me on the security booth to make sure I didn’t sneak in.
Is there anything publicly accessible about this?
So, yes! I think this is a great question. I’m referring to this:
This post describes a CEA university program that was discontinued.
So below is my guess of the context or background of what happened:
This $50M program was one specific (and promising) instance of major effort on college campuses that would have brought on generations of new EA leaders, future donors, who would go to into altruism instead of say, Wall Street or corporate.
This is a larger program and in a natural way, requires a discrete commitment of money, up to $50M in one vision or phase. (Note that this money wasn’t necessarily transferred, but it seems that the dependencies of this or similar programs could change in reserve fund levels, which is why I mentioned it).
So what happened? The involved CEA team is really talented and working on a huge number of projects. At the same time, outside of CEA, at the moment, there happens to be talented EAs working on related projects. So at this particular time, for this particular program, the CEA staff decided that other people in EA could do this right now.
So they gave back the money for this program, voluntarily, instead of just using it to get more headcount, make themselves look bigger or something.
I think that, no matter what the actual need of funds that CEA has, this act of giving back the money and deciding others can do the program it is exactly what you want to see.
It’s unclear if this indicates anything about CEA’s funding or any funding situation in EA—but seems to suggest good governance and use of money at CEA.
I think that, no matter what the actual need of funds that CEA has, this act of giving back the money and deciding others can do the program it is exactly what you want to see.
Strongly agree!
It’s not clear I’m remotely informed or know anything about EA, much less informed about CEA.
You clearly know much more than I do. Even if things were more transparent it would still be hard to keep up with everything, so thank you for sharing your perspective and what you happen to know!
Retaining funds without charitable intent [for survival in the case of potential unknown reputational damage, for the potential loss of a donor] where those funds are beyond the reserves actually necessary is what I criticised about the UK charity CEA. That the related but separately run and separately managed USA CEA seems not to do that is something I too would applaud.
I don’t know what the correct level would be other than the current level feels very wrong. They themselves give summary reasons for the very high reserves which seem unacceptable.
(1) The possible but unknown reputational damage they can’t really expect, or if they do so expect they ought not to build a fighting fund from my (potential*) charitable donations. Or if they’re expecting reputational damage a better strategy would be to change their behaviour.
(2) The potential loss of a big donor. When they lose a big donor that is the time to cut back on their funding of projects and their staff costs. High paid workers (and they are, this organisation) should not be protecting from losing their jobs in a downturn more than some commercial enterprise workers would be. Instead they take my (potential*) donations and set them aside for this purpose.
You’ll all be aware of the matching funds concept in charitable giving. If I give £10 then someone else guarantees to match this. Effectively my altruism is DOUBLED. This is a great concept and has encouraged me to give in the past. Lets see what’s happening here. The UK CEA takes half of it’s donations and sits on it. If I gave £10 to the UK CEA in 2020 only £5 is used. We’re not even talking about the necessary admin and infrastructure costs here. Effectively my altruism is HALVED.
___ (*) Why am I here? Thru hard work and luck I find myself with surplus assets and I thought I would give some of it away now, and some later. I wanted to do so constructively and was so pleased to find the EA crowd! I had already typed the (UK) CEA’s name and charity number into my draft will before I decided to properly check the hype for myself. I think I might be better off donating to OXFAM, their failings are distressing but the failings are human, they are not policy, and they’re embarrassed by them.
I’m uncomfortable criticising so anonymously. I’ve tried to find out how properly to identify myself here. I cannot edit my psb777 id and there seems to be nowhere to type in my name. I’ll stick it in the bio notes. Meanwhile I’m Paul Beardsell if you’re looking for whom to avoid.
GiveWell’s Maximum Impact Fund https://www.givewell.org/maximum-impact-fund is probably what you were looking for in the first place, it distributes 100% of the money to projects with the highest direct impact, and its employees are funded by external funds.
As far as I understand, the CEA “mission is to build a community of students and professionals acting on the principles of effective altruism, by creating and sustaining high-quality discussion spaces”. So indeed they probably do “fancy” events (the Bahamas thing is completely unrelated, see other comment). Which is probably something you do not find as valuable as more direct work. (And I personally would agree with you, and donated to New Incentives last year).
Don’t worry about criticizing “anonymously”, your name is the first thing that shows up when you Google “psb777″ anyway. If you want an admin to edit your visible name you can ask for help by clicking in the bottom right.
But please try to be more polite, everyone here is doing their best, if you don’t like how the CEA is using their money you should donate to a recommended charity indeed. Keep in mind that Oxfam seems to have similar salaries and ~15M£ in assets so, if this is something important to you, charities like the Against Malaria Foundation could be a better choice.
Not trying to “trip you up”, but you said your org had “far less income”—surely you know that reserve size is inherently correlated with income.
I don’t feel tripped up. Surely you know (your phraseology) that massive increase in reserves can only come from massive income, and that assessing the size of a necessary reserve has little to do with income but lots to do with fixed outgoings. I’m asserting the reserves are being kept for reasons stated in their own report which are not justifiable by a charity. The reserves are excessive. My point was to counter the false assertion above that such degree of reserves is necessary by any organisation.
A reserve fund like this [of this size relative to expenditure] is critical for operating any entity.
Not critical. Not even usual. Not any entity. Not at 4+ years fixed operating expenses even if no further income ever arose and all staff were retained.
What motivates me is a horror of people making and accepting large expenses from charitable funds. That people accept large salaries to work in the charitable sector because perhaps they could earn as much elsewhere is a different question, it’s the expenses entertainment travel accommodation paid for and accepted instead of the mosquitto nets etc which is very distasteful.
The CEA was merely a prominent example of charitable funds being retained for non-charitable purposes. But I may take up your suggestion in that regard, thanks.
But your headline point, that I seemingly don’t understand “patient longtermism” is I think unwarranted. Two major reasons given by the CEA for the retention of massive reserves are (1) survival in the case of reputational damage and (2) the loss of a major donor.
Neither of these are good examples of “patient longtermism”. They’re bad examples.
What motivates me is a horror of people making and accepting large expenses from charitable funds. That people accept large salaries to work in the charitable sector because perhaps they could earn as much elsewhere is a different question, it’s the expenses entertainment travel accommodation paid for and accepted instead of the mosquitto nets etc which is very distasteful.
I’m not sure I understand this position. Money is fungible. If you think it’s morally acceptable for EA charities to offer high salaries so people take less of a paycut to work in them, then it should also be acceptable for EA charities to offer other perks (directly financial or otherwise) to make their organizations more appealing to work for. (Alternatively, perhaps neither is morally acceptable). At any rate, I’m not sure why catered meals or flights is categorically different from high salaries here, and in the case of in-office meals and flights there’s at least a plausible business justification for them.
I also think this comment from someone else with experience in the (non-EA) charitable sector is illuminating:
I’ve spent time in the non-EA nonprofit sector, and the “standard critical story” there is one of suppressed anger among the workers. To be clear, this “standard critical story” is not always fair, accurate, or applicable. By and large, I also think that, when it is applicable, most of the people involved are not deliberately trying to play into this dynamic. It’s just that, when people are making criticisms, this is often the story I’ve heard them tell, or seen for myself.
It goes something like this:
[Non-EA] charities are also primarily funded by millionaires and billionaires. But they’re also run by independently wealthy people, who do it for the PR or for the fuzzies. They underpay, overwork, and ignore the ideas of their staff. They’re burnout factories.
Any attempts to “measure the impact” of the charity are subverted by carelessness and the undirected dance of incentives to improve the optics of their organization to keep the donations flowing. Lots of attention on gaming the stats, managing appearances, and sweeping failures under the rug.
Missions are thematic, and there’s lots of “we believe in the power of...”-type storytelling motivating the work. Sometimes, the storytelling is explicitely labeled as such, serving to justify charities that are secular, yet ultimately faith-based.
Part of the core EA thesis is that we want to have a different relationship with money and labor: pay for impact, avoid burnout, money is good, measure what you’re doing, trust the argument and evidence rather than the optics. I expect that anybody reading this comment is very familiar with this thesis.
It’s not a thesis that’s optimized for optics or for warm fuzzies. So it should not be surprising that it’s easy to make it look bad, or that it provokes anxiety.
This is unfortunate, though, because appearances and bad feelings are heuristics we rely on to avoid getting sucked into bad situations.
Some considerations:
A non-profit does not have the same cash flow or sources of income and this may require a different size reserve fund.
Not trying to “trip you up”, but you said your org had “far less income”—surely you know that reserve size is inherently correlated with income.
Under the current circumstances, many EA organizations are larger in scope (and I think more important) than they appear. For CEA, for example, there’s over 100 community groups to operationally/financially support! This growth is recent.
There’s probably more going on too that can’t easily be written about—CEA recently returned ~$50M (in expected? cashflow) to a major funder.
All this produces a soup on the books. Accounting is important and powerful but to amateurs or prejudice, I think it’s easy to produce noise.
The truth is that it’s hard to determine whether you are correct or not.
However, in what I think is a neutral statement, that is neither friendly nor unfriendly to you: based on your other comments, I’m skeptical of your judgement and attitude.
Maybe what is motivating you is principled negatives views on CEA’s activities. If that is the case, maybe it might work better to make that case directly (maybe with a new throwaway).
P.S : Uh, “patient Longtermism” might be a little upsetting to you.
Is there anything publicly accessible about this? I’m really interested in the current funding landscape, and how that would impact the marginal value of donations in vs outside of EA
So first of all, it’s good to tap the brakes here on my comments I’m making in this thread. It’s not clear I’m remotely informed or know anything about EA, much less informed about CEA.
For all we know, I got rejected from the recent EAG and there’s pictures of me on the security booth to make sure I didn’t sneak in.
So, yes! I think this is a great question. I’m referring to this:
https://forum.effectivealtruism.org/posts/xTWhXX9HJfKmvpQZi/cea-is-discontinuing-its-focus-university-programming
This post describes a CEA university program that was discontinued.
So below is my guess of the context or background of what happened:
This $50M program was one specific (and promising) instance of major effort on college campuses that would have brought on generations of new EA leaders, future donors, who would go to into altruism instead of say, Wall Street or corporate.
This is a larger program and in a natural way, requires a discrete commitment of money, up to $50M in one vision or phase. (Note that this money wasn’t necessarily transferred, but it seems that the dependencies of this or similar programs could change in reserve fund levels, which is why I mentioned it).
So what happened? The involved CEA team is really talented and working on a huge number of projects. At the same time, outside of CEA, at the moment, there happens to be talented EAs working on related projects. So at this particular time, for this particular program, the CEA staff decided that other people in EA could do this right now.
So they gave back the money for this program, voluntarily, instead of just using it to get more headcount, make themselves look bigger or something.
I think that, no matter what the actual need of funds that CEA has, this act of giving back the money and deciding others can do the program it is exactly what you want to see.
It’s unclear if this indicates anything about CEA’s funding or any funding situation in EA—but seems to suggest good governance and use of money at CEA.
Thanks!
Strongly agree!
You clearly know much more than I do. Even if things were more transparent it would still be hard to keep up with everything, so thank you for sharing your perspective and what you happen to know!
Retaining funds without charitable intent [for survival in the case of potential unknown reputational damage, for the potential loss of a donor] where those funds are beyond the reserves actually necessary is what I criticised about the UK charity CEA. That the related but separately run and separately managed USA CEA seems not to do that is something I too would applaud.
What amount of runway would you agree is justifiable?
I assume one year would be ok, at that scale?
I don’t know what the correct level would be other than the current level feels very wrong. They themselves give summary reasons for the very high reserves which seem unacceptable.
(1) The possible but unknown reputational damage they can’t really expect, or if they do so expect they ought not to build a fighting fund from my (potential*) charitable donations. Or if they’re expecting reputational damage a better strategy would be to change their behaviour.
(2) The potential loss of a big donor. When they lose a big donor that is the time to cut back on their funding of projects and their staff costs. High paid workers (and they are, this organisation) should not be protecting from losing their jobs in a downturn more than some commercial enterprise workers would be. Instead they take my (potential*) donations and set them aside for this purpose.
You’ll all be aware of the matching funds concept in charitable giving. If I give £10 then someone else guarantees to match this. Effectively my altruism is DOUBLED. This is a great concept and has encouraged me to give in the past. Lets see what’s happening here. The UK CEA takes half of it’s donations and sits on it. If I gave £10 to the UK CEA in 2020 only £5 is used. We’re not even talking about the necessary admin and infrastructure costs here. Effectively my altruism is HALVED.
___
(*) Why am I here? Thru hard work and luck I find myself with surplus assets and I thought I would give some of it away now, and some later. I wanted to do so constructively and was so pleased to find the EA crowd! I had already typed the (UK) CEA’s name and charity number into my draft will before I decided to properly check the hype for myself. I think I might be better off donating to OXFAM, their failings are distressing but the failings are human, they are not policy, and they’re embarrassed by them.
I’m uncomfortable criticising so anonymously. I’ve tried to find out how properly to identify myself here. I cannot edit my psb777 id and there seems to be nowhere to type in my name. I’ll stick it in the bio notes. Meanwhile I’m Paul Beardsell if you’re looking for whom to avoid.
I agree that based on what you’re posting so far, there are definitely better choices for you than UK CEA. Here are two lists by EA related projects:
https://www.givingwhatwecan.org/best-charities-to-donate-to-2022/#donate-to-reputable-and-effective-charities
https://www.thelifeyoucansave.org/best-charities/ (this one includes Oxfam!)
There is a lot of diversity of opinions in the EA movement on what’s exactly best to donate to, depending on each individual’s unique values.
GiveWell’s Maximum Impact Fund https://www.givewell.org/maximum-impact-fund is probably what you were looking for in the first place, it distributes 100% of the money to projects with the highest direct impact, and its employees are funded by external funds.
As far as I understand, the CEA “mission is to build a community of students and professionals acting on the principles of effective altruism, by creating and sustaining high-quality discussion spaces”.
So indeed they probably do “fancy” events (the Bahamas thing is completely unrelated, see other comment).
Which is probably something you do not find as valuable as more direct work. (And I personally would agree with you, and donated to New Incentives last year).
Don’t worry about criticizing “anonymously”, your name is the first thing that shows up when you Google “psb777″ anyway. If you want an admin to edit your visible name you can ask for help by clicking in the bottom right.
But please try to be more polite, everyone here is doing their best, if you don’t like how the CEA is using their money you should donate to a recommended charity indeed. Keep in mind that Oxfam seems to have similar salaries and ~15M£ in assets so, if this is something important to you, charities like the Against Malaria Foundation could be a better choice.
I don’t feel tripped up. Surely you know (your phraseology) that massive increase in reserves can only come from massive income, and that assessing the size of a necessary reserve has little to do with income but lots to do with fixed outgoings. I’m asserting the reserves are being kept for reasons stated in their own report which are not justifiable by a charity. The reserves are excessive. My point was to counter the false assertion above that such degree of reserves is necessary by any organisation.
Not critical. Not even usual. Not any entity. Not at 4+ years fixed operating expenses even if no further income ever arose and all staff were retained.
What motivates me is a horror of people making and accepting large expenses from charitable funds. That people accept large salaries to work in the charitable sector because perhaps they could earn as much elsewhere is a different question, it’s the expenses entertainment travel accommodation paid for and accepted instead of the mosquitto nets etc which is very distasteful.
The CEA was merely a prominent example of charitable funds being retained for non-charitable purposes. But I may take up your suggestion in that regard, thanks.
But your headline point, that I seemingly don’t understand “patient longtermism” is I think unwarranted. Two major reasons given by the CEA for the retention of massive reserves are (1) survival in the case of reputational damage and (2) the loss of a major donor.
Neither of these are good examples of “patient longtermism”. They’re bad examples.
I’m not sure I understand this position. Money is fungible. If you think it’s morally acceptable for EA charities to offer high salaries so people take less of a paycut to work in them, then it should also be acceptable for EA charities to offer other perks (directly financial or otherwise) to make their organizations more appealing to work for. (Alternatively, perhaps neither is morally acceptable). At any rate, I’m not sure why catered meals or flights is categorically different from high salaries here, and in the case of in-office meals and flights there’s at least a plausible business justification for them.
I also think this comment from someone else with experience in the (non-EA) charitable sector is illuminating: