I want to push back on this a tiny bit. Just because some projects got funding from FTX, that doesn’t necessarily mean Open Phil should fund them. There’s a few reasons for this:
There will be projects that 1) have significant funding gaps, 2) have been vetted by people you trust for both their value alignment and competence, 3) are not only shovel-ready, but already started.
When FTX Future Fund was functioning, there was lots more money available in the ecosystem, hence (I think) the bar for receiving a longtermist grant was lower. This money is now gone, and lots of orgs who got FTX funding might not meet OP’s bar / the new bar we should have given less resources. So basically I don’t think it’s sufficient to say 1) they have significant funding gaps, 2) they exist and 3) they’ve been vetted by people you trust. IMO you need to prove that they’re also sufficiently high-quality, which might not be true as FTX was vetting them with a different bar in mind.
Stepping in to help these projects bridge the gap until they can find new funding sources looks like an unusually cost-effective opportunity. It may also require somewhat less vetting on your end, which may matter more if you’re unusually constrained by grantmaker capacity for a while
2. The problem I see here is that these projects might not ever find new funding sources, or it would take longer to find than is reasonable. For example, EA funding in general is quite down (e.g. tech stocks) and we’re looking at an extended period (1-2 years) of recession / slow growth, so keeping alive projects that don’t meet the OP longtermist bar for 1-3+ years probably isn’t the best use of money, as it’s unclear if all of these projects would definitely find funding in the future. As I say below, a 3 month exit grant to help people transition to other projects might be a better use of funds.
3. I think your second point is a tough one as I can definitely imagine mishandling this might be bad for encouraging future folks to start-up projects in EA. That said, I think EAs of all people should be happy to accept that some charities, if they’re not amongst the most effective things to do, shouldn’t exist. If we (the EA community or Open Phil) thinks that the bottom 20% of FTX-funded projects aren’t worth funding, then we likely shouldn’t fund them. [1] Just like there could be a negative impact on founders being put-off by the a lack of a safety net within EA, I’m also worried that it could be bad for community epistemics (and more importantly, the world) if we’re willingly supporting projects that clearly aren’t amongst the best things we could be doing with our money. I definitely agree though some sort of exit grants over 3 months by OP / other EA funders might be useful to help people transition if their projects got totally tanked, but funding sub-par projects for another year or more seems less than ideal.
I’m kind of unsure about my points above and happy to be pushed back on them—but I also don’t think it’s a simple as: if FTX funded it, those longtermist opportunities out must be great so let’s fund them.
This feels a bit harsh to say, and it’s easy for me to do as I don’t have FTX funding. Apologies if it comes across as insensitive, as I understand this is a hard time for a lot of people. I really do hope people at least have enough resources to figure out alternative plans without any serious hardship.
James is right that Open Phil probably shouldn’t fund all those projects, because the reduction in total funding demands a higher funding bar
I think this assumes that the funding rate was appropriate given the presence of FTX. However, if one believes that EA will continue to recruit/produce billionaires, then EA could justify continuing the 2022 spend rate (or even more) despite the implosion of FTX (and reduction in Open Phil resources).
Agree with many of the considerations above—the bar should probably rise somewhat after such a funding shortfall. One way to solve it in practice could be to sit down in the room with the old FTX FF team and ask “which XX% of your grants are you most enthusiastic about and why”, and then (at least as an initial hypothesis; possibly requiring some further vetting) plan to fund that. The generalized point I’m trying to make is twofold: 1) that quite a bit of judgement already went into assessing these projects and it should be possible to use that to decide how many of them are above the bar, and 2) because all the other input factors (talent, project idea, vetting) are unchanged, and assuming a standard shape of the EA production function, the marginal returns to funding should now be unusually high.
And David is right that (at least under some reasonable models) if you can predict that your bar will fall in the future, you should probably lower it already. I’m not exactly sure what the requirements would be for the funding bar to have a Martingale property (e.g., does it require some version of risk neutrality, or specific assumptions about the shape of the impact distribution across projects or time), but it seems reasonable to start with something close to that assumption, at least. However that still implies that when you experience a large, unexpected funding shortfall, the bar does need to rise somewhat.
I want to push back on this a tiny bit. Just because some projects got funding from FTX, that doesn’t necessarily mean Open Phil should fund them. There’s a few reasons for this:
When FTX Future Fund was functioning, there was lots more money available in the ecosystem, hence (I think) the bar for receiving a longtermist grant was lower. This money is now gone, and lots of orgs who got FTX funding might not meet OP’s bar / the new bar we should have given less resources. So basically I don’t think it’s sufficient to say 1) they have significant funding gaps, 2) they exist and 3) they’ve been vetted by people you trust. IMO you need to prove that they’re also sufficiently high-quality, which might not be true as FTX was vetting them with a different bar in mind.
2. The problem I see here is that these projects might not ever find new funding sources, or it would take longer to find than is reasonable. For example, EA funding in general is quite down (e.g. tech stocks) and we’re looking at an extended period (1-2 years) of recession / slow growth, so keeping alive projects that don’t meet the OP longtermist bar for 1-3+ years probably isn’t the best use of money, as it’s unclear if all of these projects would definitely find funding in the future. As I say below, a 3 month exit grant to help people transition to other projects might be a better use of funds.
3. I think your second point is a tough one as I can definitely imagine mishandling this might be bad for encouraging future folks to start-up projects in EA. That said, I think EAs of all people should be happy to accept that some charities, if they’re not amongst the most effective things to do, shouldn’t exist. If we (the EA community or Open Phil) thinks that the bottom 20% of FTX-funded projects aren’t worth funding, then we likely shouldn’t fund them. [1] Just like there could be a negative impact on founders being put-off by the a lack of a safety net within EA, I’m also worried that it could be bad for community epistemics (and more importantly, the world) if we’re willingly supporting projects that clearly aren’t amongst the best things we could be doing with our money. I definitely agree though some sort of exit grants over 3 months by OP / other EA funders might be useful to help people transition if their projects got totally tanked, but funding sub-par projects for another year or more seems less than ideal.
I’m kind of unsure about my points above and happy to be pushed back on them—but I also don’t think it’s a simple as: if FTX funded it, those longtermist opportunities out must be great so let’s fund them.
This feels a bit harsh to say, and it’s easy for me to do as I don’t have FTX funding. Apologies if it comes across as insensitive, as I understand this is a hard time for a lot of people. I really do hope people at least have enough resources to figure out alternative plans without any serious hardship.
I agree with all three people:
Holden is right not to rush into funding FTX Foundation grantees
Jakob is right that there are now more shovel-ready projects for Open Phil to fund
James is right that Open Phil probably shouldn’t fund all those projects, because the reduction in total funding demands a higher funding bar
I think this assumes that the funding rate was appropriate given the presence of FTX. However, if one believes that EA will continue to recruit/produce billionaires, then EA could justify continuing the 2022 spend rate (or even more) despite the implosion of FTX (and reduction in Open Phil resources).
Agree with many of the considerations above—the bar should probably rise somewhat after such a funding shortfall. One way to solve it in practice could be to sit down in the room with the old FTX FF team and ask “which XX% of your grants are you most enthusiastic about and why”, and then (at least as an initial hypothesis; possibly requiring some further vetting) plan to fund that. The generalized point I’m trying to make is twofold: 1) that quite a bit of judgement already went into assessing these projects and it should be possible to use that to decide how many of them are above the bar, and 2) because all the other input factors (talent, project idea, vetting) are unchanged, and assuming a standard shape of the EA production function, the marginal returns to funding should now be unusually high.
And David is right that (at least under some reasonable models) if you can predict that your bar will fall in the future, you should probably lower it already. I’m not exactly sure what the requirements would be for the funding bar to have a Martingale property (e.g., does it require some version of risk neutrality, or specific assumptions about the shape of the impact distribution across projects or time), but it seems reasonable to start with something close to that assumption, at least. However that still implies that when you experience a large, unexpected funding shortfall, the bar does need to rise somewhat.