There is a post about this (although it was written in 2015).
There are some good reasons for why large donors would want to not give too much money to a charity at once:
Avoiding excessive reserves: Because of the opportunity costs (other charities could use money productively sooner), it is undesirable to have a charity having excessive reserves. Ideally, they would be promised a steady stream of funding if they meet specific targets over many years in order for them to be able to plan ahead.
Risk diversification: Funds should be distributed to several high impact organisations in order to diversify the risk of one of them not performing well.
Incentivizing others to join the cause area:
Countries: By restricting funding to a particular country, one incentivizes the country to invest in very effective health interventions themselves and use their (often very limited) domestic resources to close the funding gap between donations and the full cost of delivering effective health interventions. Poorer, low-income countries (such as Ethiopia) are less able to do this than low-to-middle income countries (such as India).
Charities: By restricting funding to charities, they’re being kept on their toes, so that they do not rely on a particular foundation or big grant giver exclusively and apply for other grants. For instance, in the past, the Gates foundation has heavily funded the Schistosomiasis Control Initiative. However, Gates later discontinued SCI’s funding not because of too little effectiveness, but because, since their effectiveness had been established, other funders would more readily fund them.
Other donors: By restricting funding to particular charities, other donors are incentivized to also invest in the effective charities. For instance, the Against Malaria foundation has a broader appeal to small private donors than more high-expected-value interventions. Thus, even though theoretically, the Gates foundation, which is the largest private foundation in the world with an endowment of US$42.9 billion[4], could buy every person in Africa a bednet every two years (population of Africa (1 Billion) * Cost of Bednet (5 Dollars) = 5 Billion dollars) that would rapidly deplete their limited resources and then they could not spend their money on other very effective causes. They might reason that (small) more risk-averse donors (who want to be certain that their money will have an impact) will close the funding gap of very effective and established interventions and that they can instead spend more money on riskier, high expected value areas.
Technological Innovation: New technological innovations—such as a very effective malaria vaccine—might be discovered, and these might be more cost-effective.
Thanks for the link! I vaguely remember reading this but probably didn’t really get an answer that I was hoping for. In the case of AMF, reason 1 doesn’t apply, because they seem to want the money to do things now instead of building reserves. Reason 4 seems most relevant—maybe the Gates Foundation is hoping that a Malaria vaccine (which recent developments have shown positive results) could render bed nets futile? But I don’t think I buy this either—considering how effective these vaccines currently are, how long it takes to roll out vaccines in these countries, and that Bill Gates himself has previously vouched for bed nets (albeit before the vaccines were endorsed by WHO). As for reasons 2, 3, and 5, I just don’t really see how these reasons are worth killing so many babies for—I can’t picture a decision maker in the Foundation saying “yeah we have decided to let a hundred thousand people die of Malaria so that we can diversify our risks and encourage others to donate”.
I may be missing something, but I only see a few reasonable scenarios:
The Gates Foundation does indeed plan to donate, and they might be the ‘donor of last resort’
They really do not intend to fill the funding gap, perhaps because they don’t think additional funding to AMF is as cost-effective as advertised
They are confident that AMF will somehow get funding from other sources
I think the most likely explanation is that the Bill & Melinda Gates Foundation is funding bednet distribution programs that it considers at least as cost-effective as the marginal distribution funded by the AMF (and that are probably equivalent).
From this post, my high-level naive understanding is that the Gates-funded Global Fund and the AMF fund the same kind of programs.
My understanding is that the main reason these funding gaps exist is that even Gates doesn’t have enough money to fund everything. From the post linked above: “The Global Fund is the world’s largest funder of malaria control activities and has a funding replenishment round every three years, with funding provided by global governments, that determines the funds it has available across three disease areas: HIV/Aids, malaria and TB. The target for the 2024 to 2026 period was raising US$18 billion, largely to stand still. The funding achieved was US$15.7 billion.”
The Gates Foundation has committed to giving away $8.6 billion this year. They could cover the Global Fund’s budget by themselves only if they exclusively funded those things (which they don’t; they fund lots of things).
And if they did, the gap would move to the next best funding opportunity.
Thanks! I think I was having the impression that the Gates Foundation was struggling to give out money (e.g. this comment from a long time ago), but I’m now learning that that’s probably no longer true—they set a goal of $9 billion by 2026 and they’re already having a budget of $8.6 billion this year. Now it makes sense.
There is a post about this (although it was written in 2015).
Thanks for the link! I vaguely remember reading this but probably didn’t really get an answer that I was hoping for. In the case of AMF, reason 1 doesn’t apply, because they seem to want the money to do things now instead of building reserves. Reason 4 seems most relevant—maybe the Gates Foundation is hoping that a Malaria vaccine (which recent developments have shown positive results) could render bed nets futile? But I don’t think I buy this either—considering how effective these vaccines currently are, how long it takes to roll out vaccines in these countries, and that Bill Gates himself has previously vouched for bed nets (albeit before the vaccines were endorsed by WHO). As for reasons 2, 3, and 5, I just don’t really see how these reasons are worth killing so many babies for—I can’t picture a decision maker in the Foundation saying “yeah we have decided to let a hundred thousand people die of Malaria so that we can diversify our risks and encourage others to donate”.
I may be missing something, but I only see a few reasonable scenarios:
The Gates Foundation does indeed plan to donate, and they might be the ‘donor of last resort’
They really do not intend to fill the funding gap, perhaps because they don’t think additional funding to AMF is as cost-effective as advertised
They are confident that AMF will somehow get funding from other sources
I think the most likely explanation is that the Bill & Melinda Gates Foundation is funding bednet distribution programs that it considers at least as cost-effective as the marginal distribution funded by the AMF (and that are probably equivalent).
From this post, my high-level naive understanding is that the Gates-funded Global Fund and the AMF fund the same kind of programs.
My understanding is that the main reason these funding gaps exist is that even Gates doesn’t have enough money to fund everything. From the post linked above: “The Global Fund is the world’s largest funder of malaria control activities and has a funding replenishment round every three years, with funding provided by global governments, that determines the funds it has available across three disease areas: HIV/Aids, malaria and TB. The target for the 2024 to 2026 period was raising US$18 billion, largely to stand still. The funding achieved was US$15.7 billion.”
The Gates Foundation has committed to giving away $8.6 billion this year. They could cover the Global Fund’s budget by themselves only if they exclusively funded those things (which they don’t; they fund lots of things).
And if they did, the gap would move to the next best funding opportunity.
Thanks! I think I was having the impression that the Gates Foundation was struggling to give out money (e.g. this comment from a long time ago), but I’m now learning that that’s probably no longer true—they set a goal of $9 billion by 2026 and they’re already having a budget of $8.6 billion this year. Now it makes sense.