A short review of the Effect Foundation in 2017

The Effect Foun­da­tion (Stif­tel­sen Effekt in Nor­we­gian) is an EA non-profit ded­i­cated to pro­mote and fundraise in Nor­way to GiveWell recom­mended char­i­ties. It started op­er­a­tions in mid-2016 and have raised about $ 360 000 (NOK 2 800 000) to date. The au­thor of this post was one of the main ini­tia­tors, and for the last year, the Manag­ing Direc­tor of Stif­tel­sen Effekt.

In this post I will pre­sent what Effect has raised in 2017 and how this bench­marks to similar op­er­a­tions at The Life You Can Save (TLYCS) in USA and Effec­tive Altru­ism Foun­da­tion (EAF) in Ger­many/​Switzer­land. At the end I will pre­sent my own as­sess­ment of our po­ten­tial in the next 3-5 years.

Effect Foun­da­tion − 2017 in numbers

All figures be­low are ap­prox­i­mate val­ues for read­abil­ity.
USD given at the ex­change rate as of 03.03.18

Amount money moved in 2017

  • NOK 1 810 000 $ 232 000

Es­ti­mated coun­ter­fac­tual share (34%):

  • NOK 610 000 $ 78 300

To­tal ex­penses:

  • NOK 60 000 $ 7 700

By our an­nual sur­vey and con­ser­va­tive as­sump­tions we es­ti­mate that about NOK 610 000 (34%) of money moved in 2017 is con­trafac­tual on Effect be­ing shut down 1. Jan­uary 2017. We are con­fi­dent that at a min­i­mum of this amount is moved to GiveWell’s recom­mended char­i­ties as a di­rect con­se­quence of our work.

Stif­tel­sen Effekt is run solely by vol­un­teers and a small bud­get that we are cur­rently cov­er­ing with­out hav­ing a ded­i­cated fundrais­ing drive, but just by donors choos­ing to al­lo­cate a share of their dona­tion to Effekt.

How does this com­pare to TLYCS and EAF?

To give some con­text to the num­bers above and bet­ter illus­trate the po­ten­tial of mass fundrais­ing in Nor­way, I’ve gath­ered com­pa­rable num­bers from TLYCS and EAF. First I want to dis­close some im­por­tant differ­ences in how the three or­gani­sa­tions op­er­ate and re­port their num­bers. I would stress that read­ers only up­date on the num­bers given based on their mag­ni­tude and gen­eral trend, not their ex­act nu­mer­i­cal value, as I’ve not in­vested a lot of time in prepar­ing this.

TLYCS have not pub­lished an im­pact re­port for 2017, so the num­bers be­low is from their 2016 re­port. Each of the last three years they have grown sub­stan­tially, so I ex­pect their num­bers to be sig­nifi­cantly higher in 2017. Since GiveWell them­selves are based in the US, they would “com­pete” with TLYCS in do­ing EA fundrais­ing for the GW recom­mended char­i­ties. Note also that TLYCS fundraise for more than just these char­i­ties.

EAF pro­vided me with the amount raised for GW recom­men­da­tions, ex­clud­ing what is as­so­ci­ated with REG (an EAF pro­ject). EAF also fundraises for other char­i­ties than GW recom­mended char­i­ties, but this is not in­cluded here. EAF also told me that they ex­pect their efforts in 2017 would re­sult in dona­tions of $10-20 mil­lion in 2018, most of which will likely be donated to GiveWell recom­mended char­i­ties. Here, I’ve used the con­ser­va­tive figure that only in­cludes funds raised through their own web­site in 2017. I don’t know how this dis­tributes be­tween Ger­many, Switzer­land and other coun­tries, but I’ll just as­sume Ger­many and Switzer­land pro­vides ev­ery­thing.

USD moved In­hab­itants (mill) USD moved
per 1000 in­hab­itants
Effect—Nor­way $ 232 000 5.233 $ 44.3
TLYCS—USA $ 2 700 000 323.1 $ 8.4
EAF—Ger./​Swiss $ 1 800 000 82.62 + 8.40 $ 19.8

Nor­way is a small coun­try, but the sup­port of for­eign aid in the gen­eral pub­lic is high and the me­dian in­come level is one of the high­est in the world. To illus­trate how this com­pares to the US, Ger­many and Switzer­land I’ve gath­ered some figures to as­sess the com­par­a­tive wealth of a typ­i­cal in­hab­itant in the differ­ent coun­tries. The rea­son I’ve gath­ered three similar mea­sures is to miti­gate se­lec­tion bias as I’m not an ex­pert in these num­bers. I’m only in­ter­ested in a gen­eral sense of how “typ­i­cal wealth” com­pares be­tween the coun­tries.

1. House­hold in­come per capita

2. Me­dian adult income

3. Net monthly av­er­age wage

Norway

$ 55 518

$ 36 043

$ 4 256

USA

$ 25 514

$ 30 960

$ 3 300

Germany

$ 31 137

$ 25 140

$ 2 838

Switzerland

$ 59 483

$ 34 608

$ 5 569

Notes

1. House­hold in­come per cap­ita, 2013, not PPP. Source: CIEC­data. Lat­est Ger­man figures were from 2013, and the Nor­we­gian figures from this year were un­usu­ally high. Be­cause of a buggy web­site I only got the 2014 figures for Switzer­land.

2. Me­dian adult in­come US$ PPP in 2013, be­fore benefits. Source: Wikipe­dia.

3. Net monthly av­er­age wage, be­fore benefits. Source: Wikipe­dia.

As we can see from the table above, the dona­tion po­ten­tial in Nor­way per cap­ita is high, but Switzer­land is equal or higher. They are also a larger coun­try. I don’t know how the sup­port of for­eign aid in the gen­eral pub­lic com­pares be­tween the coun­tries.

A broad fundrais­ing strat­egy, based on un­con­tro­ver­sial causes, could work es­pe­cially well in coun­tries like Nor­way and Switzer­land and raise more con­trafac­tual funds per dol­lar/​time spent than in other coun­tries. Hauke Hille­brandt also men­tioned ex­pand­ing fundrais­ing efforts in Nor­way as a promis­ing pro­ject re­cently (nr 2 in the non-or­dered list).

Fu­ture plans and fund­ing opportunity

Since we’ve only op­er­ated for about two years, our em­piri­cal ba­sis for es­ti­mat­ing the long term po­ten­tial of the Effect Foun­da­tion is weak. How­ever we’ve in­vested a limited amount of money and time and still we’ve got solid re­sults. I be­lieve there are low hang­ing im­prove­ments like im­ple­ment­ing a bet­ter, more au­to­mated dona­tion sys­tem, get­ting tax de­ductibil­ity sta­tus and bet­ter uti­lize effec­tive mar­ket­ing strate­gies. There­fore, I be­lieve that we could reach USD 0.65-1 mill within 3-5 years in yearly dona­tions and keep, or in­crease, the share of coun­ter­fac­tual dona­tions. A well co­or­di­nated col­lab­o­ra­tion with the newly formed EA Nor­way would be es­sen­tial.

Cur­rently the Effect Foun­da­tion does not have a fund­ing gap as we are con­strained on peo­ple rather than money. As a small or­ga­ni­za­tion based on vol­un­teers, start­ing a fundrais­ing and hiring pro­cess is para­dox­i­cally a bar­rier in it self. This could already change later this year if EA Nor­way gets funded and would help out with hiring, ad­minis­tra­tion and strat­egy. There­fore a way of helping out Effect would be to sup­port EA Nor­way.


If you have ques­tions or com­ments that you don’t want to post in the com­ments be­low, please send them to jor­gen@stif­tel­seneffekt.no. I can also help with get­ting you in con­tact with the board at EA Nor­way.

Jør­gen Ringvold Ljø­nes
Manag­ing Direc­tor
Stif­tel­sen Effekt/​The Effect Foundation