Hi Aidan. You estimated a giving multiplier of 7 for 2025 (for 15 k$ per new 10 % Pledge), 6 for 2023-2024 (for 15 k$ per new 10 % Pledge), and 30 for 2020-2022 (for 22 k$ per new 10 % Pledge). Your estimates for the value per new 10 % Pledge are similar. So the giving multiplier has decreased overwhelmingly because the cost per new 10 % Pledge has increased?
Hi Vasco, thanks for the question! On average, our expenditure per 10% Pledge has definitely increased since 2020-2022, a period when our costs were unusually low. It’s fair to say that the decline in the giving multiplier since then is largely driven by our costs increasing faster than pledge growth. While we aim to keep our multiplier above 5x, we don’t necessarily aspire to have a multiplier of 30x, as we did in the past. A key reason for this is that we think there is probably a tradeoff between cost-effectiveness and scale (i.e., if our multiplier is 30x, there are probably highly cost-effective activities we are leaving on the table).
That makes sense. I do not know what the ideal giving multiplier on total spending is, but I think the marginal giving multiplier should be close to 1 (assuming it accounts for all effects). Spending should increase if it is above 1 because this would mean spending 1 $ more would lead to more than 1 $ of benefits.
Hi Aidan. You estimated a giving multiplier of 7 for 2025 (for 15 k$ per new 10 % Pledge), 6 for 2023-2024 (for 15 k$ per new 10 % Pledge), and 30 for 2020-2022 (for 22 k$ per new 10 % Pledge). Your estimates for the value per new 10 % Pledge are similar. So the giving multiplier has decreased overwhelmingly because the cost per new 10 % Pledge has increased?
Hi Vasco, thanks for the question! On average, our expenditure per 10% Pledge has definitely increased since 2020-2022, a period when our costs were unusually low. It’s fair to say that the decline in the giving multiplier since then is largely driven by our costs increasing faster than pledge growth. While we aim to keep our multiplier above 5x, we don’t necessarily aspire to have a multiplier of 30x, as we did in the past. A key reason for this is that we think there is probably a tradeoff between cost-effectiveness and scale (i.e., if our multiplier is 30x, there are probably highly cost-effective activities we are leaving on the table).
That makes sense. I do not know what the ideal giving multiplier on total spending is, but I think the marginal giving multiplier should be close to 1 (assuming it accounts for all effects). Spending should increase if it is above 1 because this would mean spending 1 $ more would lead to more than 1 $ of benefits.
+1 to Vasco’s comment. Why would you want such a high giving multiplier?