The point at which you hit diminishing returns to funding an org may actually be pretty low. I’d be skeptical about the marginal value of budget increases of much more than a factor of 2 per year unless the org had demonstrated really impressive traction.
This isn’t incompatible with what you’re saying, but they may diminish well before that also. Taking the present example of Giving What We Can, the people who worked there or are involved with it thought that applied to it. They thought most of the value came from the existence of the organisation and a pledge people could sign if they wanted to commit to giving 10%, and other things which were done even before they started paying staff. So that would be diminish returns right at the $ 0 mark!
There are also signaling issues with only donating to metacharities, so if you’re public about your giving it might not be a great idea (“guys, look at how much I donate to these organizations that promote donating to themselves!”).
There are even less positive ways to frame that also, like giving to one another, and having organisations which heavily focus on promoting themselves (including by promoting the idea of metacharity, and making it a central concept in the movement). Even aside from signalling, we should see others’ discomfort with that as a reason to be wary of it ourselves.
The confidence interval for GWWC’s leverage ratio plausibly already includes numbers below 1
This is what those people I talked to from GWWC thought, due to their various experiences and observations. And GiveWell too as you say; they had had conversations with people at GiveWell who thought that GWWC’s future fundraising ratio was below 1.
Doesn’t every organization/social movement that efficiently allocates resources have diminishing returns beginning with the first dollar? One reason why this could theoretically not be true is if efficient use of capital requires upfront investment in infrastructure, but I don’t know if that applies here. The concept of diminishing returns seems distinct from leverage (though obviously not unrelated).
The signalling issue is complicated, and I’m open to suggestions. As I’m a consequentialist, I’m open simply to lying.
″ hits diminishing returns” is usually used as a shorthand for “investment in hits the point where returns have diminished enough that additional investment is no longer optimal.”
Doesn’t every organization/social movement that efficiently allocates resources have diminishing returns beginning with the first dollar?
That will be the case very often, except in cases like that which you have mentioned. In these comments Michelle Hutchinson came up with a few other possibilities, like economies of scale.
The signalling issue is complicated, and I’m open to suggestions. As I’m a consequentialist, I’m open simply to lying.
This wouldn’t address the non-signalling concern that I raised though (as I’m sure you’re aware of course).
This isn’t incompatible with what you’re saying, but they may diminish well before that also. Taking the present example of Giving What We Can, the people who worked there or are involved with it thought that applied to it. They thought most of the value came from the existence of the organisation and a pledge people could sign if they wanted to commit to giving 10%, and other things which were done even before they started paying staff. So that would be diminish returns right at the $ 0 mark!
There are even less positive ways to frame that also, like giving to one another, and having organisations which heavily focus on promoting themselves (including by promoting the idea of metacharity, and making it a central concept in the movement). Even aside from signalling, we should see others’ discomfort with that as a reason to be wary of it ourselves.
This is what those people I talked to from GWWC thought, due to their various experiences and observations. And GiveWell too as you say; they had had conversations with people at GiveWell who thought that GWWC’s future fundraising ratio was below 1.
Doesn’t every organization/social movement that efficiently allocates resources have diminishing returns beginning with the first dollar? One reason why this could theoretically not be true is if efficient use of capital requires upfront investment in infrastructure, but I don’t know if that applies here. The concept of diminishing returns seems distinct from leverage (though obviously not unrelated).
The signalling issue is complicated, and I’m open to suggestions. As I’m a consequentialist, I’m open simply to lying.
″ hits diminishing returns” is usually used as a shorthand for “investment in hits the point where returns have diminished enough that additional investment is no longer optimal.”
duplicate comment
That will be the case very often, except in cases like that which you have mentioned. In these comments Michelle Hutchinson came up with a few other possibilities, like economies of scale.
This wouldn’t address the non-signalling concern that I raised though (as I’m sure you’re aware of course).