Despite billions of extra funding, small donors can still have a significant impact

I’ve written about how there’s now a lot more funding committed to effective altruism– about $50bn.

It’s natural to think this means small donors can no longer have much impact, and I’ve seen several cases of people saying they’re not sure whether their donations will do any good, because all the opportunities are being taken by large donors.

However, I think this isn’t right: more donations from small donors still have a significant impact. This means raising additional funding is still of value to the community, and I think earning to give and donating to e.g. the Long Term Future Fund, is a highly impactful thing to do – probably more impactful than the vast majority of careers.

I also think the increase in funding means there’s an opportunity to do even more good than earning to give, and that people earning to give currently should seriously consider switching to the kinds of opportunities flagged in my talk at EAG. But that doesn’t mean that small donations have no impact.


  1. What matters is not the total amount of available funding, but the current level of cost-effectiveness at the margin. This has likely declined, but is still high.

  2. Small donors should be able to roughly match large donors in terms of cost-effectiveness by ‘funging’ with them.

  3. Small donors can sometimes beat large donors in terms of cost-effectiveness, and I provide a list of some common ways to do this.

At the end, I’ll make some comments on where I think people should donate.

1. What matters is not total funding available but marginal cost-effectiveness

It’s true that as more funding becomes available, all else equal, we should expect more of the best opportunities to be taken, and for cost-effectiveness to decrease.

However, there is a force which limits the size of this effect: how quickly we’re able to discover new opportunities. Because effective altruism is still small and building capacity, it’s not obvious that cost-effectiveness will decline quickly.

While I think the very best opportunities involve taking a more hits based, longterm focused approach than GiveWell, their recommendations serve as a good starting point to examine these dynamics. GiveWell’s top recommendations probably constitute the ‘bar’ for neartermist work. In a recent post, Open Philanthropy’s Global Health and Wellbeing team expect to find many opportunities above this bar, but for marginal dollars to go to GiveWell.

Overall, GiveWell now seems to be targeting a cost-effectiveness of 8x GiveDirectly or higher for most donations, though about 20% funds will go towards opportunities that are 5-8x as cost-effective as GiveDirectly, and so additional donations should be about this cost-effective.

GiveWell is unsure whether the margin will be closer to 5x than 8x. In the same post, Open Philanthropy says “we currently expect GiveWell’s marginal cost-effectiveness to end up around 7-8x GiveDirectly”.

They also say they believe that GiveWell’s margin has been around 10x GiveDirectly in recent years, so if it declines to 7x, that will be a 30% fall – this is only a modest decline and still very high.

To illustrate, they estimate that donating $4,250 to a charity that’s 8x GiveDirectly is as good as saving the life of a child under five.

With a lognormal distribution of cost-effectiveness, there should be many more opportunities at the 5x level than the 10x level, so it should be possible to deploy a lot more funds as the bar lowers. (Even setting aside the possibility of discovering new highly cost-effective interventions.)

In a worst case scenario, billions could be spent on cash transfers at a level of cost-effectiveness similar to or only a little below GiveDirectly. This would most likely still produce 100 times more wellbeing for the world than spending the money on your own consumption.

Grace, 48, is an example of a recipient of grants by GiveDirectly.

Over 500 million people live in extreme poverty and over 1 million die per year of easily preventable causes – and we’re a long way from solving these terrible problems.

Within longtermism, it’s harder to say where the bar is, but you can look at recent grants by the Long Term Future Fund (or Open Philanthropy within the relevant causes) to get a sense. The worst of these grants look pretty good to me.

Personally, I would donate to the Long Term Future Fund over the global health fund, and would expect it to be perhaps 10-100x more cost-effective (and donating to global health is already very good). This is mainly because I think issues like AI safety and global catastrophic biorisks are bigger in scale and more neglected than global health. Coming up with an actual number is difficult – I certainly don’t think they’re overwhelmingly better. My estimate of 10-100x is in line with the median response at the 2018 Leaders Forum (and this group seems to represent the most engaged community members pretty well, though might be tilted towards longtermism).

My sense is that the bar within longtermism has come down a little bit compared to a few years ago – back then we weren’t providing much funding for things like PhD programmes, which strike me as somewhat less effective than funding core organisations (though still well worth it).

On the other hand, since longtermism is so new, there is also a lot more potential to generate and discover highly effective opportunities as the capacity of the community grows. It wouldn’t surprise me if the bar stays similar in the coming years.

Again, in a worst case scenario, there are ways that longtermists could deploy billions of dollars and still do a significant amount of good. For instance, CEPI is a $3.5bn programme to develop vaccines to fight the next pandemic – that could easily be topped up by $1bn (ideally restricted to work to develop vaccines for novel pathogens). (See more ideas.) These kinds of scalable opportunities are likely 10-100x less effective than the top longtermist opportunities we’re able to find today, but still very good (and if you put reasonable credence in longtermism, plausibly still more effective than GiveWell recommended charities).

I also expect research will uncover better scalable longtermist donation opportunities in the coming years, which means that investing to give when those opportunities arise is a more attractive option (compared to donors focused on global health).

If longtermism attracts supporters ahead of our expectations, the bar may fall further. But again, society spends less on reducing existential risk than it does on ice cream, so we could spend orders of magnitude more on longtermist aligned issues, and it would still be a minor global priority.

(Extra info on diminishing returns in longtermism: Returns probably diminish faster in longtermism than in neartermism. But longtermists also care more about the all time total amount of resources invested in an issue than how much is invested each year. This means what matters for diminishing returns are changes in how much you expect to be spent in longtermism aligned ways in the future. This means that additional funding only drives down expected returns if it’s ahead of what you already expected to be spent. So we care more about ‘positive surprises’ than changes in the total of committed funds.)

2. Small donors should be able to roughly match large donors in terms of effectiveness

Open Philanthropy recently donated $11 million to the Centre for Human Compatible AI (CHAI) at UC Berkeley, and has donated to it in the past. It’s natural to wonder what a small donor can possibly add, and feel like ‘all the best opportunities are taken’.

But if you were to donate $1,000 to CHAI, then either:

1. You expand CHAI’s available funding by $1,000. The cost-effectiveness of this grant should be basically the same as the final $1,000 that Open Philanthropy donated.

2. Or Open Philanthropy donates $1,000 less to CHAI in their next funding round. In this case you’ve been ‘funged’ by Open Philanthropy. But then that means that Open Philanthropy has an additional $1,000 which they can grant somewhere else within their longtermist worldview bucket.

In reality, some combination of the two probably happens. But either way, the effectiveness of your donation is about the same as marginal donations made by Open Philanthropy.

The same dynamic happens in global health with donations to the Against Malaria Foundation or similar.

Small donors also funge Open Philanthropy. Taking the big picture, around $500m is donated by people in the effective altruism community each year. Additional donations – whether from small or large donors – expand that pot. Unless you’re donating to something that absolutely no-one else would have donated to otherwise (which is rare), additional donations have similar cost-effectiveness, whether from small or large donors.

So, if you think that Open Philanthropy (or other large donors) are able to do good with marginal donations, then you can do a similar amount of good per dollar yourself.

I find this pretty encouraging – as a small donor, I can achieve a similar cost-effectiveness to additional grants by Open Philanthropy, a foundation that employs many of the smartest people within effective altruism to do full-time research into where to give, and I don’t have to do any work at all, except look through their grants database.

(Carl Shulman provides a similar argument for the same conclusion, by pointing out that if large donors are able to achieve a higher level of cost-effectiveness as small donors, then you could use a donor lottery to turn your small donation into a large donation.)

3. Small donors can sometimes beat large donors in terms of cost-effectiveness

By focusing on grants that are harder for large donors to find, you might be able to be even more effective.

The ideal funding ecosystem would probably include a significant number of “angel” donors, aiming to source opportunities that can later be scaled up by “VC donors” like Open Philanthropy or the new FTX Foundation.

Here are some categories that are hard for large donors to take right now:

  • Some organisations can’t accept large grants from foundations. For instance, many political campaigns can’t accept more than $5000 per donor, and even if they could, it would be seen as a negative – support from lots of small donors is better validation that there’s support for the idea. Guarding Against Pandemics was a recent example of a campaign like this that needed to raise lots of small donations. Similarly, giving to political candidates may be an outstanding opportunity for small donors.

  • Support people you know who aim to work on top causes. The grantmakers at large foundations can only maintain a limited number of relationships, but a big part of making a good grant is choosing the right people to support. You might know people that large grantmakers don’t know, and if you trust them, you could provide a small grant to help them make a career change; go to graduate school; help them buy extra time /​ reduce stress /​ pay for therapy; or try out a startup nonprofit. As a U.S. individual, you can make a gift tax-free (unless you hit the lifetime gift tax exemption of $12m). UK individuals can also make gifts tax free (unless you die within 7 years of making the gift, in which case it’s subject to inheritance tax). Or if you don’t have enough funding yourself, you can recommend that EA Funds support them. An example of people-focused grantmaking with relatively small grants is Emergent Ventures.

    • A special case: maybe there are ways to spend money to make yourself a lot more effective in the future? The returns to investments in your career capital or productivity can be pretty high e.g. going to graduate school; getting therapy; moving closer to work to save 30min of commute each day; having more savings so you’re less worried and would find it easier to change career etc. While you might be able to get a grant to cover some of these things, it’s often a lot easier to pay for them yourself. As the ratio of funding to people goes up, the value of your time goes up, making more of these opportunities worthwhile purely from the perspective of your impact. If you’re worried about deluding yourself (a reasonable worry to have), ask whether you’d do the same for a friend, or ask another person to cross-check your decisions.

  • Smaller grants. The community currently seems short of big grantmakers, which means they’re probably not catching every good opportunity – especially opportunities that can’t absorb much funding and/​or are near the current funding bar (and so aren’t worth a large grantmaker investigating). This creates an opportunity for smaller donors to specialise in these smaller grants that are more likely to be missed. That’s not to say this is easy – many of these small grants *are* considered by the big funders – but it at least provides an opportunity to find great opportunities.

  • Other gaps not being covered by existing grantmakers. An especially clear gap is that there are no grantmakers who specialise in most of the new potential cause areas we list here. If you’re a smaller donor who also has a significant amount of time for research, then trying to pioneer a new problem area could be a way to significantly increase the cost-effectiveness of your donations. (If you don’t have time to do this research now, you could invest to give, and do more research in the future.)

  • Edit: Participate in matching campaigns, or make use of employer donation matches. See comment below.

It’s also not healthy for an organisation to depend 100% on a single foundation for its funding. This means that until we have 3+ large foundations covering each organisation, small donors play a role in diversifying the funding base of large organisations. (Though note that you’re only providing this benefit if your grantmaking process is independent from the large donors.)

For all these reasons, I think there’s definitely scope for small donors to achieve cost-effectiveness that’s actually higher than large foundations.

Other benefits of small donors to the community

Small donors can also play a valuable role providing insurance. Good Ventures currently intends to disperse all their money within a few decades. If the FTX Foundation takes a similar route, and EA turns out to be a fad that doesn’t keep attracting new large donors, then there’s a possibility that EA or longtermism have much less money in the future. In this scenario, it would be valuable for there to be a source of funding that could step in. Small donors could save money in a DAF or the Patient Philanthropy Fund and provide this insurance.

More importantly, making donations also helps to build the effective altruism community, since it’s a hard-to-fake symbol that we’re serious about doing good, and that helps to get more people on board.

Many also find that making donations helps them stay committed to doing good more broadly i.e. it’s a self-signal too.

Where should you actually donate?

Broadly, your options are to:

  1. Delegate your grantmaking to someone else

  2. Do your own research.

Within the delegate category, some common options are:

  • The Effective Altruism Funds (or GiveWell’s maximum impact fund within global health & development).

  • Topping up grants by Open Philanthropy – see some guidance on doing this in our best charity article from last year.

  • Find someone you know whose judgement you trust and is (sufficiently) aligned with your values, and go with their recommendation.

If you want to do your own research, we give some pointers on how to do your own research in our article on choosing where to donate. In general, you should focus on the categories listed above for how small donors can beat large donors.

Whether to delegate or do your own research isn’t an obvious decision – simply topping up Open Philanthropy grants is already pretty effective. At the same time, many organisations that claim to have funding gaps have already been considered and rejected by the large grantmakers. So, while I think it is very possible to beat Open Philanthropy and other large donors. in terms of cost-effectiveness, it’s not trivial. You need to think about how much research it would take vs. the opportunity costs of that research (e.g. focusing on advancing your career and therefore having more to donate in the future).

Personally, I think for someone who roughly shares our view of global priorities, doesn’t regularly encounter idiosyncratic opportunities that aren’t visible to big donors, and doesn’t have much time for research relative to the size of their donations, then donating to the Long Term Future Fund or Infrastructure Fund seem like good options.

If you feel interested to do your own research, and especially if you have specific ideas about how you might beat those three funds, I’d also encourage that. You’ll probably learn a lot from the exercise. If you don’t have enough money right now to justify the fixed costs of doing your own research, enter the donor lottery.

Personally, I would probably enter the donor lottery, and then if I win, think hard about who to delegate my giving to (since I don’t think my comparative advantage lies in assessing where to donate). I might also try to make grants to individuals or projects that are less central to EA or startup nonprofits, if I knew about them. If I had to donate immediately without any time to research the decision, I would likely give to the Long Term Future Fund or to the Global Priorities Institute (because I think I’m a bit keener on global priorities research than typical).

I’d especially encourage people who might donate $100k - $2m per year to think seriously about making ‘angel’ donating a significant focus e.g. choose an area to specialise in and spend 1-2 days per month on research, or run an open round like the new ACX grants. I’d also recommend speaking to existing grantmakers (like the EA Funds) for advice and to hear about opportunities. If you might donate $10m+, then it could be worth hiring a researcher. If you don’t have time for this now, you could consider investing to give, and then donating when you have more time to do research in the future. Though, focusing on earning more and delegating your decisions is also a reasonable option (e.g. this is what Warren Buffett decided to do when he delegated his donations to Bill Gates).


Why are there billions of dollars sitting around and not being donated?

The best strategy for a large foundation is often to only donate a couple of percent of their endowment per year (depending on how pivotal the current moment is). One reason is that there are some diminishing returns to opportunities each year, so all else equal, it’s more effective to spread your donations out over time rather than give everything right away. Another reason is that investment returns means you’ll have more money to donate in the future. What percentage exactly to donate each year is a difficult question – see more on the arguments for this in our interview with Phil Trammell – but everyone agrees the correct answer isn’t 100%.

This means we should always expect there to be billions sitting around and not being donated. So the fact that there are billions committed to effective altruism and not doing anything doesn’t tell us much about how effective marginal donations actually are.

That said, I estimate the community is only donating about 1% of available capital per year right now, which seems too low, even for a relatively patient philanthropist.

I think the main reason for this is that available funding has grown pretty quickly, and the amount of grantmaking capacity and research has not yet caught up. I expect large donors to start deploying a lot more funds over the coming years. This might be starting with the recent increase in funding for GiveWell.

My contribution feels tiny in comparison

It’s true that a $100 million donation has a lot more impact than a $1000 donation to the same cause. It can easily be demoralising to compare ourselves to others who are achieving a lot more than us.

But we should do our best to resist these comparisons. It’s always possible to find someone or something that makes our contribution seem small in comparison. But these comparisons are not very relevant to real decisions. As individuals, the question we should ask is “what’s the best thing I can do with the resources I (actually) have?”.

If there are highly effective ways to do good – where the money could do a lot more good than spending it on yourself – then it’s seriously worth considering donating to them.

While a single person can’t change the entire world, your donations can make an enormous difference to the people they affect.

Further reading