EA Funds Beta Launch

This post was writ­ten by Kerry Vaughan, with con­tri­bu­tions by Larissa Hes­keth-Rowe and Tara Mac Au­lay. Thank you to Nick Beck­stead and Holden Karnofsky for pro­vid­ing early feed­back and ed­its.

This post is a fol­low-up to Will’s post in­tro­duc­ing a pro­ject we’re call­ing the Effec­tive Altru­ism Funds (EA Funds). This post pro­vides a more de­tailed ex­pla­na­tion of the pro­ject and why we think it may be among the high­est im­pact dona­tion op­tions for many in­di­vi­d­ual donors.

We only want to fo­cus on the Effec­tive Altru­ism Funds if the com­mu­nity be­lieves it will im­prove the effec­tive­ness of their dona­tions and that it will provide sub­stan­tial value to the EA com­mu­nity. Ac­cord­ingly, we plan to run the pro­ject for the next 3 months and then re­assess whether the pro­ject should con­tinue and if so, in what form. The main way we will as­sess if the funds provide value to our com­mu­nity is to­tal re­cur­ring dona­tions to the EA Funds and com­mu­nity feed­back.

If you think it is plau­si­ble that donat­ing to EA Funds is more effec­tive than your al­ter­na­tives, the best way to sig­nal sup­port for the pro­ject is to make a dona­tion through the beta ver­sion of the pro­ject. Dona­tions to EA Funds are tax-de­ductible for both UK and US donors. A link to the beta ver­sion is pro­vided be­low.

Donate to the Funds here

To provide feed­back on the pro­ject, please fill out this short sur­vey .

If you have an idea for a fund or a fund man­ager, please fill out this short sur­vey .

The ba­sic idea

Why donat­ing to the funds might be higher-im­pact than the alternatives

Dona­tions to EA Funds may be at least as good as Open Phil’s last dollar

Donat­ing via EA Funds may provide more value through spe­cial­iza­tion and com­par­a­tive advantage

Pos­i­tive ex­ter­nal­ities of us­ing EA Funds

Donor coordination

Con­sid­er­a­tions against donat­ing through the EA Funds

Con­cerns about the ini­tial funds and fund managers

Spe­cific dis­agree­ments with fund managers

Re­quires trust in CEA

Conclusion

The ba­sic idea

EA Funds are mu­tual funds for giv­ing effec­tively within core EA cause ar­eas. When you donate to a fund, you spec­ify the cause area, and pool your dona­tion with many like-minded donors. Cause area ex­perts then de­cide how to best al­lo­cate the pooled dona­tions to the most promis­ing giv­ing op­por­tu­ni­ties they can find.

Us­ing EA Funds in­volves three ba­sic steps:

  1. Choose how to split your dona­tion across our four funds: Global Health and Devel­op­ment, An­i­mal Welfare, Far Fu­ture, and Effec­tive Altru­ism Com­mu­nity Build­ing.

  2. Make a sin­gle dona­tion to CEA’s EA Funds which we split across the four funds as per your cho­sen al­lo­ca­tion. You get a sin­gle tax re­ceipt.

  3. The Fund Man­agers use their ex­per­tise in the field to find the high­est-im­pact char­i­ties to sup­port.

Why donat­ing to the funds might be higher-im­pact than the alternatives

We don’t ex­pect EA Funds to be the high­est im­pact dona­tion op­tion for all donors. How­ever, we only want to de­vote sig­nifi­cant time to the pro­ject if it is plau­si­bly a higher-im­pact dona­tions al­ter­na­tive for many in­di­vi­d­u­als in the EA com­mu­nity.

Below are four ar­gu­ments for why EA Funds might be higher-im­pact than the al­ter­na­tives available to many donors. We ex­pand on each ar­gu­ment be­low.

1. Dona­tions to EA Funds may be at least as good as Open Phil’s last dollar

Dona­tions to EA Funds could be at least as good as Open Phil’s last dol­lar in the fol­low­ing four ways:

1.1 In­creas­ing the to­tal al­lo­ca­tion to the cause area in ques­tion.

Open Phil fund man­agers will treat money donated through EA Funds as ad­di­tional fund­ing al­lo­cated to the cause area, so donors who have a strong prefer­ence for some cause ar­eas over other can po­ten­tially in­crease the to­tal amount of fund­ing al­lo­cated to that cause area.

1.2 Pro­vid­ing a fund­ing stream for more un­usual, risky or time-sen­si­tive pro­jects, par­tic­u­larly where Open Phil might have brand-risk concerns

While Open Phil pro­gram officers have con­sid­er­able free­dom in their grant mak­ing, there may be ad­di­tional giv­ing op­por­tu­ni­ties that are not a good fit for Open Phil. EA Funds gives Fund Man­agers a pool of fund­ing they can make grants from with more brand sep­a­ra­tion from Open Phil, pos­si­bly al­low­ing them to counter risk-aver­sion. Fund Man­agers might also en­counter giv­ing op­por­tu­ni­ties that are par­tic­u­larly time-sen­si­tive, or very small, where the need to go through Holden and Cari is pro­hibitive.

1.3 Pro­vid­ing ad­di­tional fund­ing to or­gani­sa­tions where Open Phil already pro­vides a high pro­por­tion of to­tal fund­ing.

Open Phil cur­rently tries to set an up­per limit on the pro­por­tion of an or­ga­ni­za­tion’s bud­get they will provide, in or­der to avoid de­pen­dence on a sin­gle fun­der. In the case where EA Funds gen­er­ates re­cur­ring dona­tions from a large num­ber of donors, Fund Man­agers may be able to fully fund an or­ga­ni­za­tion already iden­ti­fied, sav­ing the or­ga­ni­za­tion from spend­ing ad­di­tional time rais­ing funds from many small donors in­di­vi­d­u­ally. Donors who sign up for re­cur­ring dona­tions give a strong in­di­ca­tion of their de­sire to con­tinue fund­ing this cause area, which in­creases the amount of re­sources that Open Phil can al­lo­cate to any in­di­vi­d­ual or­ga­ni­za­tion in a given year.

1.4 Fung­ing against Open Phil is a very good worst-case-scenario

While Fund Man­agers will at­tempt to avoid fung­ing dona­tions be­tween in­di­vi­d­ual donors to EA Funds and Open Phil, we think the is­sue of fung­ing de­serves more thor­ough ex­plo­ra­tion. In our post in­tro­duc­ing the ba­sic idea of the EA Funds, some com­menters ex­pressed con­cern than money given through EA Funds would funge against the Open Philan­thropy Pro­ject (Open Phil) since the fund man­agers are all Open Phil em­ploy­ees:

>It seems strange to have the funds run by peo­ple who also di­rect money from on be­half of big grant-mak­ing or­ga­ni­za­tions. Un­der what cir­cum­stances will the money end up go­ing some­where differ­ent? … [T]he cur­rent in­car­na­tion seems to be ba­si­cally equiv­a­lent to just giv­ing GiveWell or OPP money with a cause-based re­stric­tion. -Larks

While the Fund Man­agers will con­tinue op­er­a­tions as nor­mal within Open Phil, even if the Fund Man­agers were un­able to find any more promis­ing op­por­tu­ni­ties, and dona­tions through EA Funds did end up fung­ing with Open Phil, this might not nec­es­sar­ily be a bad thing. Get­ting funged by Open Phil means your dona­tion is at least as good as Open Phil’s last dol­lar. As Carl ex­plains :

>In prin­ci­ple one one could donate to the donor-ad­vised fund (DAF) of Open Phil, di­rectly in­creas­ing its ul­ti­mate dona­tion ca­pac­ity. At the mo­ment, this doesn’t seem to be set up, but one could in­stead donate to some­thing that Open Phil is donat­ing to (in­fra­marginal), and re­quest that it ‘funge’ you by re­duc­ing its own dona­tion to that char­ity by the cor­re­spond­ing amount, in­creas­ing the re­serves of Good Ven­tures and other Open Phil back­ers ac­cord­ingly. So the marginal Open Phil/​Good Ven­tures dol­lar sets a min­i­mum stan­dard for risk-neu­tral donors: if you don’t ex­pect to do bet­ter than Open Phil, just ar­range to get ‘funged’.

To de­ter­mine whether get­ting funged by Open Phil is bet­ter or worse than the al­ter­na­tive we need to know how good Open Phil’s last dol­lar would be.

Open Phil’s cur­rent view on the value of their last dol­lar is:

>… I have very low con­fi­dence in my work­ing view on how good the “last dol­lar” is likely to be, and I ex­pect my view to change quite a bit in the fu­ture. On bal­ance, our very ten­ta­tive, un­sta­ble guess is that the “last dol­lar” has higher ex­pected value than gifts to GiveWell’s top char­i­ties to­day.

Carl’s view on the topic is:

>… [M]y ex­pec­ta­tion for the ‘last dol­lar’ of Open Phil’s port­fo­lio is ex­cep­tion­ally high rel­a­tive to the gen­eral world of char­ity. Among other things, I think even af­ter diminish­ing re­turns some com­bi­na­tion of sci­en­tific re­search (e.g. gene drives to erad­i­cate vec­tor-borne dis­eases), policy work (e.g. on for­eign aid or sci­ence policy), non­hu­man an­i­mals, global catas­trophic risks (po­ten­tial risks from AI, biose­cu­rity, nu­clear risk), and oth­ers put the ex­pected value of the ‘last dol­lar’ for Good Ven­tures higher than for GiveWell’s top char­i­ties.

Thus, it seems quite plau­si­ble (al­though un­cer­tain) that fung­ing with Open Phil is higher im­pact in ex­pec­ta­tion than the low­est-cost al­ter­na­tive available now, namely, donat­ing to GiveWell-recom­mended char­i­ties.

In cases where the fund man­agers are Open Phil Pro­gram Officers (which is the case for all of the funds dur­ing the three month trial pe­riod but could change in the fu­ture), fung­ing against Open Phil is a plau­si­ble lower bound on how good dona­tions through EA Funds will be. If fund man­agers are un­able to find some­thing that beats Open Phil’s last dol­lar in ex­pec­ta­tion they could sim­ply donate to Open Phil’s ex­ist­ing grantees such that Open Phil can re­duce their fund­ing to those or­ga­ni­za­tions by a similar amount. Donors who be­lieve that Open Phil’s last dol­lar will do more good than their cur­rent giv­ing may find EA Funds an at­trac­tive op­tion for this rea­son.

2. Donat­ing via EA Funds may provide more value through spe­cial­iza­tion and com­par­a­tive advantage

EA Funds al­lows in­di­vi­d­ual donors to pool their dona­tions with oth­ers who share their world-view and val­ues, then del­e­gate some of the re­main­ing em­piri­cal re­search and de­ci­sion-mak­ing to peo­ple with a com­par­a­tive ad­van­tage in al­lo­cat­ing money.To make an effec­tive dona­tion, in­di­vi­d­ual donors must try to an­swer all of the fol­low­ing ques­tions, given their val­ues:

  1. Which prob­lem ar­eas are most im­por­tant?

  2. Which in­ter­ven­tions are likely to make progress in solv­ing the prob­lem?

  3. Which char­i­ties ex­e­cut­ing those in­ter­ven­tions are most effec­tive?

  4. Which char­i­ties have a fund­ing gap that is un­likely to be filled el­se­where?

Time spent an­swer­ing these ques­tions is time not spent do­ing other worth­while ac­tivi­ties, and so many donors will wish to spend marginal time in­ves­ti­gat­ing cause se­lec­tion, while defer­ring the em­piri­cal re­search to those with a com­par­a­tive ad­van­tage in do­ing so. In ad­di­tion, it is par­tic­u­larly time con­sum­ing to an­swer ques­tions (3) and (4), as an­swer­ing these ques­tions re­quires timely in­for­ma­tion, and knowl­edge of other fun­ders’ in­ten­tions. Pro­gram Officers at ma­jor foun­da­tions have a par­tic­u­lar com­par­a­tive ad­van­tage at an­swer­ing (2) and (3) since they spend vir­tu­ally all of their work­ing time think­ing about how to al­lo­cate money to achieve the most good in any given cause area. Th­ese peo­ple are also par­tic­u­larly well suited to an­swer (4) as they have up-to-the-minute in­for­ma­tion about the largest fun­der in the space. EA Funds are de­signed to al­low donors to fo­cus their re­search efforts on (1), the area where differ­ences in world-view or per­sonal val­ues may lead to the biggest differ­ences in dona­tion tar­gets.

3. Strong track record for find­ing high-lev­er­age giv­ing op­por­tu­ni­ties: the EA Giv­ing Group DAF

The ini­tial Far Fu­ture and Effec­tive Altru­ism Com­mu­nity funds will be man­aged by Nick Beck­stead, a Pro­gram Officer at Open Phil who has helped ad­vise a large pri­vate donor on dona­tion op­por­tu­ni­ties for sev­eral years. The fund Nick man­ages was an early fun­der of CSER, FLI, Char­ity En­trepreneur­ship and Founder’s Pledge. A list of Nick’s past fund­ing is available on the EA Funds web­site.

We think this rep­re­sents a strong track record al­though Open Phil’s re­cent in­volve­ment in these ar­eas may make it harder for the fund to find promis­ing op­por­tu­ni­ties in the fu­ture.

Donors can give to the DAF di­rectly by filling out this form and wait­ing for Nick to con­tact you. If you give di­rectly the min­i­mum con­tri­bu­tion is $5,000. If you give via the EA Funds there is no min­i­mum con­tri­bu­tion and you can give di­rectly on­line via credit/​debit card, ACH, or PayPal. Nick’s prefer­ence is that donors use the EA Funds to con­tribute.

*Dis­claimer : Nick Beck­stead is a trustee of CEA. CEA has been a large re­cip­i­ent of the EA Giv­ing Group DAFs fund­ing in the past and is a po­ten­tial fu­ture re­cip­i­ent of money al­lo­cated to the Move­ment Build­ing fund.*

4. Pos­i­tive longer-term ex­ter­nal­ities of us­ing EA Funds

As well as the in­creas­ing the effec­tive­ness of in­di­vi­d­u­als’ dona­tions in the short term, we be­lieve that the ex­is­tence of, and fur­ther de­vel­op­ment of EA Funds as a pro­ject might have sig­nifi­cant longer-term benefits, which you could see as a pos­i­tive ex­ter­nal­ity of us­ing the funds.

4.1 Ex­plo­ra­tion of new fund­ing opportunities

Longer term, if EA Funds con­tinues be­yond the three month trial, it might in­crease the in­cen­tives for re­searchers to ex­plore new ar­eas for po­ten­tial dona­tions. This would be both be­cause the EA Funds would cause money to be available for al­lo­ca­tion based on the re­search, and be­cause in the fu­ture we hope to en­courage new fund man­agers to cre­ate new funds with differ­ent fo­cus ar­eas than the cur­rent op­tions.

The abil­ity of the EA com­mu­nity to dis­cover new ideas for fund­ing has been one source of the com­mu­nity’s value in the past. As Carl notes:

>[I]n past years I have recom­mended dona­tion tar­gets other than con­tribut­ing to the Open Phil grant pool to peo­ple ask­ing my ad­vice, gen­er­ally in the ar­eas of re­duc­ing po­ten­tial ex­is­ten­tial risk from fu­ture de­vel­op­ments in ar­tifi­cial in­tel­li­gence, and de­vel­op­ing in­sti­tu­tions in effec­tive al­tru­ism. Th­ese recom­men­da­tions were for ar­eas where sev­eral of the above fac­tors ap­plied: or­ga­ni­za­tional risks, rep­u­ta­tional/​com­mu­ni­ca­tion prob­lems, staff bot­tle­necks, and in­ter­ac­tions with broader wor­ld­views. In sub­se­quent years OpenPhil did en­ter the ar­eas, but the early grants were able to fund time-sen­si­tive op­por­tu­ni­ties such as seed and growth fund­ing.

For ex­am­ple, many ar­eas that were of in­ter­est to the effec­tive al­tru­ism (EA) com­mu­nity sub­se­quently be­came fo­cus ar­eas for Open Phil. Ex­am­ples in­clude: im­mi­gra­tion policy, ex­is­ten­tial risks (es­pe­cially risks from ad­vanced AI), farm an­i­mal welfare, and effec­tive al­tru­ism. It seems plau­si­ble that the EA com­mu­nity could con­tinue to serve as a source of ideas for very large fun­ders in the fu­ture.

4.2. Act­ing as a train­ing ground for new EA researchers

A fu­ture ver­sion of EA Funds might also have lower bar­rier to en­try than, say, get­ting a job as a Pro­gram Officer at Open Phil. This would al­low more peo­ple to try out in-depth char­ity re­search to see if they should spe­cial­ize in it. It also pro­vides a clear feed­back mechanism for this kind of re­search, namely, whether the EA com­mu­nity chooses to donate to your fund.

4.3. Mo­ral trade and donor lotteries

As Will notes in the ini­tial post, it might be pos­si­ble in the fu­ture to use the EA Funds in­fras­truc­ture to ini­tial a num­ber of in­ter­est­ing, re­lated pro­jects. Two ex­am­ples are moral trades and co­or­di­nat­ing donor lot­ter­ies .

That are likely other in­ter­est­ing ex­per­i­ments that can be con­ducted with the dona­tion in­fras­truc­ture re­quired for the EA Funds once it gets to scale. Sup­port­ing the EA Funds would make it more likely to go be­yond the trial phase and reach the scale nec­es­sary to con­duct these ex­per­i­ments. The EA Funds con­cept need not re­main static as we scale and ex­per­i­ment more in the fu­ture.

4.4. Lev­er­age, Ne­go­ti­a­tion, and Signaling

By virtue of their size, foun­da­tions and other large donors gain a num­ber of benefits that are not available to in­di­vi­d­ual donors:

  1. Foun­da­tions can cred­ibly sig­nal long-term fund­ing availa­bil­ity in par­tic­u­lar ar­eas, mak­ing it more likely that new pro­jects arise in those ar­eas, and that more peo­ple go to work in those ar­eas.

  2. Foun­da­tions can help find and de­velop new po­ten­tial pro­jects for fund­ing.

  3. Foun­da­tions can use their fund­ing to en­courage the non­prof­its they sup­port to co­op­er­ate more than they might oth­er­wise have done.

Con­cen­trat­ing more of the fund­ing done by EAs through the EA Funds and putting more fund­ing into the hands of in­di­vi­d­ual fund man­agers can help in­di­vi­d­ual donors gain ac­cess to some of these benefits of size that are gen­er­ally not available to in­di­vi­d­ual donors.

4.5. Donor coordination

EA Funds can help solve cer­tain donor co­or­di­na­tion prob­lems that arise be­tween strate­gic, im­pact-fo­cused donors. We dis­cuss two types of co­or­di­na­tion prob­lems and how EA Funds can help solve them be­low.

4.5.1 The “last fun­der in” problem

Prob­lem: Fun­ders have an in­cen­tive to be the last fun­der in an or­ga­ni­za­tion’s fundrais­ing round as this makes it more likely that the dona­tion is not trad­ing off against fund­ing that could have been ac­quired el­se­where. Some de­gree of this prob­a­bly makes sense, but it may dis­tort in­cen­tives or falsely sig­nal a lack of sup­port for an or­ga­ni­za­tion if used too fre­quently.

Solu­tion: EA Funds co­or­di­nates more of the fund­ing through in­di­vi­d­ual Fund Man­agers to cre­ate a sin­gle, large fun­der. Large fun­ders gen­er­ally do not suffer from the last fun­der in prob­lem for two rea­sons. First, large fun­ders gen­er­ally only have to worry about other large fun­ders for their dona­tions to be crowded out. Since there are few large fun­ders, this makes co­or­di­na­tion much eas­ier. Se­cond, larger fun­der can re­quest much more in­for­ma­tion from fund­ing re­cip­i­ents. This makes it eas­ier for large fun­ders to get a sense of the fund­ing land­scape for the re­cip­i­ent and to then co­or­di­na­tion with other fun­ders.

4.5.2 The fund­ing un­cer­tainty problem

Prob­lem: Stan­dard prac­tice among in­di­vi­d­ual donors in the EA com­mu­nity is to provide pro­jects with around one year of fund­ing and then re-eval­u­ate when they ask for fund­ing again. This makes sense for fun­ders as it al­lows them to eas­ily pivot to fund­ing more valuable pro­jects later. Yet, for pro­ject lead­ers this means that they don’t know whether fund­ing will be available next year. The un­cer­tainty can cause pro­ject lead­ers to be more risk-averse than they would oth­er­wise have needed to be.

Solu­tion: Large fun­ders solve this prob­lem by pro­vid­ing multi-year grants tied to spe­cific out­comes. This al­lows large fun­ders to pull fund­ing from un­der­perform­ing or­ga­ni­za­tions. It also al­lows fund­ing re­cip­i­ents to pre­dict their fund­ing in­come mul­ti­ple years into the fu­ture and to plan ac­cord­ingly. De­sign­ing grants is time-in­ten­sive for fun­ders and fund­ing re­cip­i­ents. This time is worth it at large fund­ing sizes, but prob­a­bly not worth it at smaller sizes.

Con­sid­er­a­tions against donat­ing through the EA Funds

We want the EA com­mu­nity to use EA Funds if and only if do­ing so is the high­est-im­pact dona­tion op­tion in ex­pec­ta­tion. We an­ti­ci­pate that EA Funds will not be the high­est-im­pact dona­tion op­tion for a num­ber of donors, es­pe­cially donors mov­ing large amounts of money and spend­ing con­sid­er­able time de­ter­min­ing where to al­lo­cate their dona­tions.

We dis­cuss three con­sid­er­a­tions against donat­ing to EA funds be­low.

1. Con­cerns about the ini­tial funds and fund managers

The beta ver­sion of EA Funds has four funds all of which are man­aged by Open Phil Pro­gram Officers. Given that Open Phil is already one of the largest fun­ders in these ar­eas, con­cen­trat­ing more money in the hands of Open Phil staff may have sev­eral nega­tive effects.

  1. Con­cen­trat­ing more money in the hands of a few peo­ple could de­crease di­ver­sifi­ca­tion of wor­ld­views and in­crease the risk of bi­ases ap­pear­ing in fund­ing.

  2. Donat­ing via EA Funds may cause a higher per­centage of the bud­get of in­di­vi­d­ual char­i­ties to be de­ter­mined by a sin­gle in­di­vi­d­ual and in­creases in sin­gle-donor fund­ing may be prob­le­matic . Although it is un­clear to what ex­tent this ap­plies if there is a wide, re­cur­ring donor base to the fund sup­port­ing them.

  3. 1Us­ing Open Phil Pro­gram Officers may cause EA Funds to suffer from sev­eral dis­ec­onomies of scale that are rele­vant to en­tities as large as Open Phil. Ex­am­ples in­clude risk aver­sion due to higher costs to rep­u­ta­tional dam­age and de­creases in time spent in­ves­ti­gat­ing per dol­lar spent.

We see the ini­tial se­lec­tion of funds and fund man­agers as the MVP ver­sion of EA Funds. In the fu­ture we aim to cre­ate a wider va­ri­ety of funds with a wider va­ri­ety of fund man­agers.

We chose Open Phil Pro­gram Officers as the ini­tial fund man­agers for three rea­sons:

1.1 Uncer­tainty about the money moved through EA Funds

We don’t yet know how much money might be donated through EA Funds. If the amount of money turns out to be small, a highly skil­led fund man­ager might be bet­ter off spend­ing rel­a­tively lit­tle time al­lo­cat­ing the fund in fa­vor of spend­ing time on other ac­tivi­ties. This fact could cre­ate two detri­men­tal effects.

First, the fund man­ager might feel obli­gated to spend con­sid­er­able time al­lo­cat­ing the funds even if that would be bet­ter spent on other ac­tivi­ties.

Se­cond, donors might be in­cen­tivized to wait to see how large the fund will be be­fore donat­ing be­cause they an­ti­ci­pate that the fund man­ager will spend more time al­lo­cat­ing larger dona­tion pools. This cre­ates a donor co­or­di­na­tion prob­lem that we would rather avoid.

How­ever, Open Phil’s Pro­gram Officers have rea­son to in­ves­ti­gate these spaces in­de­pen­dent of the amount of money raised through the EA Funds. If the EA Funds raises lit­tle money, they can spend lit­tle ad­di­tional time al­lo­cat­ing the EA Funds’ money but still uti­lize their deep sub­ject-mat­ter ex­per­tise in mak­ing the al­lo­ca­tion. This re­duces the chance that the EA Funds causes fund man­agers to use their time in­effec­tively and it means that the lower bound of the qual­ity of the dona­tions is likely to be high enough to jus­tify dona­tions even with­out know­ing the even­tual size of the fund.

1.2 Open Phil’s last dol­lar as a lower bound

We found the idea that Open Phil’s last dol­lar could be a lower bound on the im­pact of dona­tions (as dis­cussed by Carl Shul­man ) com­pel­ling. Work­ing with Open Phil’s pro­gram officers seems like one of the best ways to make this the lower bound in prac­tice.

1.3 Qual­ity of the fund managers

Un­sur­pris­ingly, Open Phil has been able to hire some ex­cep­tional Pro­gram Officers. When we thought about the ideal can­di­dates for man­ag­ing the funds we found that many of the best can­di­dates were Open Phil em­ploy­ees.

2. Spe­cific dis­agree­ments with Fund Managers

Some donors may choose to donate el­se­where if they find that they have spe­cific dis­agree­ments with the wor­ld­views of the fund man­agers.

All fund man­agers have his­to­ries of past dona­tions made through Open Phil al­though these may not be rep­re­sen­ta­tive of fu­ture dona­tions. Prospec­tive donors should look at the fund man­ager’s past dona­tions (we have in­cluded these on the EA Fund web­site on the page for each fund) and the rea­son­ing for their dona­tions to de­ter­mine if they have spe­cific dis­agree­ments with the fund man­agers.

3. Re­quires trust in CEA

Be­hind the scenes, the struc­ture of EA Funds op­er­ates similar to a donor-ad­vised fund (DAF) with CEA op­er­at­ing as the DAF. Dona­tions go to CEA and are put aside un­til the Fund Man­ager recom­mends a dona­tion. CEA’s trustees must then ap­prove the dona­tion be­fore the dona­tion is sent to the re­cip­i­ent. Just as in a DAF, mak­ing a dona­tion through EA Funds sur­ren­ders own­er­ship of the dona­tion to CEA with the un­der­stand­ing that the fund man­ager will have ad­vi­sory priv­ileges over how the fund is used.

We’ve opted for this struc­ture over hav­ing donors give to a DAF for each fund for two rea­sons: 1) we be­lieve this struc­ture will al­low us to re­duce the fees as­so­ci­ated with giv­ing to the EA Funds by avoid­ing the ad­minis­tra­tion fees that DAFs charge and by al­low­ing us to ne­go­ti­ate lower pro­cess­ing fees with pay­ment pro­ces­sors; 2) We be­lieve that this struc­ture will al­low us to cre­ate a more seam­less donor ex­pe­rience in the long-run which may al­low us to move money into EA causes from those not in­volved in the EA com­mu­nity.

How­ever, this setup re­quires plac­ing trust in CEA to donate the funds as in­tended. In ad­di­tion, there may be un­ex­pected edge cases that would re­quire CEAs dis­cre­tion to re­solve. Some ex­am­ples in­clude: fund man­agers re­sign­ing, fund man­agers end­ing their term with money re­main­ing in the fund, fund man­agers mak­ing recom­men­da­tions that are not in keep­ing with the de­scrip­tion of the fund etc. CEA is un­likely to have planned for all edge cases and may need to ex­er­cise dis­cre­tion to re­solve un­fore­seen cir­cum­stances. Donors should make sure they are com­fortable with this be­fore donat­ing.

Fu­ture plans for EA Funds

While we think our se­lec­tion of fund man­agers is ideal for the beta ver­sion of EA Funds, it is not op­ti­mal in the long run. If we de­cide to pro­ceed with the EA Funds pro­ject af­ter the three month trial, our aim would be to have 50% or less of the Fund Man­agers be Open Phil Pro­gram Officers (al­though they may man­age more than 50% of the money donated). Some things we might con­sider to ac­com­plish this in­clude: adding funds in new cause ar­eas, adding funds in the ex­ist­ing cause ar­eas that rep­re­sent a differ­ent ap­proach to solv­ing the prob­lem, hav­ing mul­ti­ple peo­ple man­age some of the ini­tial funds, or through some other ap­proach.

If you have ideas for new funds or new Fund Man­agers, please fill out this form .

Conclusion

We think EA Funds may be among the high­est im­pact dona­tion op­tions for many donors al­though the case is far from cer­tain. We plan to use com­mu­nity feed­back and en­gage­ment with EA Funds to de­ter­mine whether we should al­lo­cate sub­stan­tial re­sources to the pro­ject in the fu­ture.

If you think EA Funds is not among the high­est-im­pact op­tions for you, we would be in­ter­ested in hear­ing why in the com­ments be­low or our feed­back form . We would also be in­ter­ested in hear­ing whether you think your case will gen­er­al­ize to oth­ers.

If you think EA Funds is among the high­est im­pact op­tions for you, the best thing to do is to make a dona­tion us­ing the beta ver­sion of the pro­ject at the link be­low. We would also ap­pre­ci­ate any com­ments on how you plan to use it or why you think it would be a good op­tion for you. How­ever, our eval­u­a­tion of the po­ten­tial for the pro­ject will de­pend much more on whether peo­ple ac­tu­ally donate through the beta ver­sion than it will on whether peo­ple ex­press­ing sup­port for the pro­ject in the ab­stract.

DONATE HERE

*P.S. We are plan­ning to take ad­van­tage of YC’s launch in­fras­truc­ture to gen­er­ate some ini­tial press and users for EA Funds. We will likely do this re­gard­less of com­mu­nity feed­back be­cause we think the time cost is jus­tified by of 1) see­ing how the con­cept is re­ceived out­side of the EA com­mu­nity and 2) learn­ing about YC’s pro­cess for gain­ing me­dia at­ten­tion.*