Just copying over the analysis from within the spreadsheet:
We expect that the typical funding decision will be made in a context where GWWC has already raised—or will likely go on to raise—a meaningful portion of its budget anyway from other donors.
Hence, I discount for diminishing marginal returns, based on (a) the assumption that the initial 10% of baseline funding has 10 units of marginal returns, and marginal returns decline by 1 unit for every 10% increase in baseline funding; and (b) the assumption that GWWC’s funding situation at the end of 2023 (about 70% of baseline budget expected to be secured) is representative of how much funding will usually be left after institutional and other reliable individual donors have made their contributions or have had their expected contributions factored in. In other words, we are assessing the value specifically of filling the last 30% of GWWC’s baseline budget.
Note that we have gotten an independent estimate from GWWC as to the likely marginal value of the last 30% of their baseline budget, and they ballpark it at 10%.
However, the uncertainty is radical; and both we and GWWC expect better calibration once GWWC trials out different pledge outreach strategies over the next year and measures their returns in terms of pledges secured.
Thanks, Joel. I had seen that. However, you used the formula “= 6/55” to calculate the adjustment for diminishing marginal returns, which is 11 %. The 10 % in the notes above seems to be referring to a different calculation from GWWC for the same adjustment (otherwise, I would have expected you to use the formula “= 0.1″).
Apologies if I didn’t explain clearly. Yes, the 10% estimate from GWWC was used as a sense-check, against our own calculation based on the assumptions laid out above (i.e. 1st decile of funding is 10 units of impact out of 55, 2nd decile is 9⁄55, 3rd decile is 8⁄55 … 8th decile is 3⁄55, 9th decile is 2⁄55, and 10th & final decile is 1⁄55 - and since 70% of the budget is already funded, the remaining 30% is 3+2+1=6 units of impact out of 55).
Definitely not scientific, but I wanted to model a smooth decline across each decile of funding, and I ended up not worrying too much as Sjir’s own subjective assessment converging with ours.
Hi Vasco,
Just copying over the analysis from within the spreadsheet:
We expect that the typical funding decision will be made in a context where GWWC has already raised—or will likely go on to raise—a meaningful portion of its budget anyway from other donors.
Hence, I discount for diminishing marginal returns, based on (a) the assumption that the initial 10% of baseline funding has 10 units of marginal returns, and marginal returns decline by 1 unit for every 10% increase in baseline funding; and (b) the assumption that GWWC’s funding situation at the end of 2023 (about 70% of baseline budget expected to be secured) is representative of how much funding will usually be left after institutional and other reliable individual donors have made their contributions or have had their expected contributions factored in. In other words, we are assessing the value specifically of filling the last 30% of GWWC’s baseline budget.
Note that we have gotten an independent estimate from GWWC as to the likely marginal value of the last 30% of their baseline budget, and they ballpark it at 10%.
However, the uncertainty is radical; and both we and GWWC expect better calibration once GWWC trials out different pledge outreach strategies over the next year and measures their returns in terms of pledges secured.
Hope that helps!
Thanks, Joel. I had seen that. However, you used the formula “= 6/55” to calculate the adjustment for diminishing marginal returns, which is 11 %. The 10 % in the notes above seems to be referring to a different calculation from GWWC for the same adjustment (otherwise, I would have expected you to use the formula “= 0.1″).
Hi Vasco,
Apologies if I didn’t explain clearly. Yes, the 10% estimate from GWWC was used as a sense-check, against our own calculation based on the assumptions laid out above (i.e. 1st decile of funding is 10 units of impact out of 55, 2nd decile is 9⁄55, 3rd decile is 8⁄55 … 8th decile is 3⁄55, 9th decile is 2⁄55, and 10th & final decile is 1⁄55 - and since 70% of the budget is already funded, the remaining 30% is 3+2+1=6 units of impact out of 55).
Definitely not scientific, but I wanted to model a smooth decline across each decile of funding, and I ended up not worrying too much as Sjir’s own subjective assessment converging with ours.
Thanks, Joel! Makes sense. Sorry for not having read the 2nd bullet carefully.