I’d be curious to see a specific fictional story of failure that you think is: * realistic (e.g. you’d be willing to bet at unfavourable odds that something similar has happened in the last year) * seems very bad (e.g. worth say 25%+ of the org’s budget to fix) * is handled well at more mature charities with better governance * stems from things like 2b and 3b
I’m struggling to come up with examples that I find compelling, but I’m sure you’ve thought about this a lot more than I have.
A couple come to mind but, if you’ll allow it, I would first respond to your prompt(s) with:
I don’t think there are loads of examples of organisations with better governance (boards are weird, after all) overall—I’d argue that EA norms and practices lead to better governance, relative to traditional nonprofits, in some respects and worse in others. Nonprofits could generally do governance better.
I’m not sure it makes sense to isolate 2b and 3b here − 1a can also play a role in mitigating failure (and some combination of all three might be optimal)
The two stories that come to mind both seem realistic to me (I’d take the bet these have happened recently) but might not meet your bar for ‘very bad’. However, I’d argue we can set the bar a bit higher (lower? depends how you look at it....) and aim for governance that mitigates against more mundane risks, providing the trade-off makes sense. I think it does.
Story 1 - A new-ish EA project/org has received 12 months of funding to do [something]. At the end of the 12 months, [something] has not been achieved but the money has been spent.
In this story, the funder has accepted that they are making a bet, that there’s some level of experimentation going on, that there are lots of uncertainties and assumptions etc. However, in this story, it was perfectly possible for [something] to be delivered, or for some equally impactful [something else] to be identified and delivered. Neither happened, but the team has spent most, if not all, of its funding and has just failed to deliver. They might have a compelling story about what they’ll do next year and get more funding, they might not.
(1a) With a well-run Board of Trustees (made up of impartial, experienced, connected and credentialed people) overseeing the work of the less experienced project team and holding them to account, I think it’s reasonable to imagine the team gets clearer, quicker about their objectives and how to deliver on these; more effectively monitors and responds to information about their progress during the year; more likely notices the ways in which they might change course in pursuit of impact; and so on.
(3b) With more performance monitoring from the funder, both the funder and project team realise early on that things aren’t going well. The funder can provide funder plus-type support to the team, make clear their expectations of the project team in the event that targets aren’t met, or really take any other action that makes sense to try and maximise the impact of their funding.
(2b) I’d argue that there’s nothing much here that will impact on whether or not the team is successful on this occasion. But it seems to me that the org/funder being transparent about what happened would be in keeping with EA principles, and would support others in the community making a judgment about donating to the team in the future.
Story 2 - There’s an organisation going along just fine, doing impactful community-building work. But they are leaking small amounts of money through lax management accounting. The amounts are small but not inconsequential when you consider the principle of cost-effectiveness and the counterfactual impact of the money being wasted.
In this story, the org has grown over the last few years and seen founders move on, key staff members move, junior team members step up and just a lot of change and turnover in general. Their financial accounting is absolutely fine (they outsource this to accountants), but rarely (if ever) have they reviewed management accounts to get a handle on where money is going. Why would they? No one has asked them to.
They have Zoom subscriptions that nobody uses because they have a Google Workspace account and just default to Google Meet. That Google Workspace account hasn’t had a nonprofit discount applied. They have an Airtable team plan, with 27 collaborators who no longer work at the organisation, or who only looked at some data once, two years ago. They buy Huel for the office every week but aren’t really clear on who’s drinking it or how it contributes to their Theory of Change.
All in all, $1000s a year are being wasted. I’d accept that implementing (1a) and (3b) to stop this kind of thing is a bit over the top—after all, this is just an issue with performance/competence/attention that can be fixed by having the right people and systems in place. But then it’s (1a) that puts the right people in place and both (1a) and (3b) that can oversee/monitor work, incentivising and/or requiring good performance and ensuring attention on the right things.
Thanks, this is a great response. I appreciate the time and effort you put into this.
I’m not sure it makes sense to isolate 2b and 3b here − 1a can also play a role in mitigating failure (and some combination of all three might be optimal).
I just isolated these because I thought that you were most interested in EA orgs improving on 2b/3b, but noted.
I’d be curious to see a specific fictional story of failure that you think is:
* realistic (e.g. you’d be willing to bet at unfavourable odds that something similar has happened in the last year)
* seems very bad (e.g. worth say 25%+ of the org’s budget to fix)
* is handled well at more mature charities with better governance
* stems from things like 2b and 3b
I’m struggling to come up with examples that I find compelling, but I’m sure you’ve thought about this a lot more than I have.
A couple come to mind but, if you’ll allow it, I would first respond to your prompt(s) with:
I don’t think there are loads of examples of organisations with better governance (boards are weird, after all) overall—I’d argue that EA norms and practices lead to better governance, relative to traditional nonprofits, in some respects and worse in others. Nonprofits could generally do governance better.
I’m not sure it makes sense to isolate 2b and 3b here − 1a can also play a role in mitigating failure (and some combination of all three might be optimal)
The two stories that come to mind both seem realistic to me (I’d take the bet these have happened recently) but might not meet your bar for ‘very bad’. However, I’d argue we can set the bar a bit higher (lower? depends how you look at it....) and aim for governance that mitigates against more mundane risks, providing the trade-off makes sense. I think it does.
Story 1 - A new-ish EA project/org has received 12 months of funding to do [something]. At the end of the 12 months, [something] has not been achieved but the money has been spent.
In this story, the funder has accepted that they are making a bet, that there’s some level of experimentation going on, that there are lots of uncertainties and assumptions etc. However, in this story, it was perfectly possible for [something] to be delivered, or for some equally impactful [something else] to be identified and delivered. Neither happened, but the team has spent most, if not all, of its funding and has just failed to deliver. They might have a compelling story about what they’ll do next year and get more funding, they might not.
(1a) With a well-run Board of Trustees (made up of impartial, experienced, connected and credentialed people) overseeing the work of the less experienced project team and holding them to account, I think it’s reasonable to imagine the team gets clearer, quicker about their objectives and how to deliver on these; more effectively monitors and responds to information about their progress during the year; more likely notices the ways in which they might change course in pursuit of impact; and so on.
(3b) With more performance monitoring from the funder, both the funder and project team realise early on that things aren’t going well. The funder can provide funder plus-type support to the team, make clear their expectations of the project team in the event that targets aren’t met, or really take any other action that makes sense to try and maximise the impact of their funding.
(2b) I’d argue that there’s nothing much here that will impact on whether or not the team is successful on this occasion. But it seems to me that the org/funder being transparent about what happened would be in keeping with EA principles, and would support others in the community making a judgment about donating to the team in the future.
Story 2 - There’s an organisation going along just fine, doing impactful community-building work. But they are leaking small amounts of money through lax management accounting. The amounts are small but not inconsequential when you consider the principle of cost-effectiveness and the counterfactual impact of the money being wasted.
In this story, the org has grown over the last few years and seen founders move on, key staff members move, junior team members step up and just a lot of change and turnover in general. Their financial accounting is absolutely fine (they outsource this to accountants), but rarely (if ever) have they reviewed management accounts to get a handle on where money is going. Why would they? No one has asked them to.
They have Zoom subscriptions that nobody uses because they have a Google Workspace account and just default to Google Meet. That Google Workspace account hasn’t had a nonprofit discount applied. They have an Airtable team plan, with 27 collaborators who no longer work at the organisation, or who only looked at some data once, two years ago. They buy Huel for the office every week but aren’t really clear on who’s drinking it or how it contributes to their Theory of Change.
All in all, $1000s a year are being wasted. I’d accept that implementing (1a) and (3b) to stop this kind of thing is a bit over the top—after all, this is just an issue with performance/competence/attention that can be fixed by having the right people and systems in place. But then it’s (1a) that puts the right people in place and both (1a) and (3b) that can oversee/monitor work, incentivising and/or requiring good performance and ensuring attention on the right things.
Thanks, this is a great response. I appreciate the time and effort you put into this.
I’m not sure it makes sense to isolate 2b and 3b here − 1a can also play a role in mitigating failure (and some combination of all three might be optimal).
I just isolated these because I thought that you were most interested in EA orgs improving on 2b/3b, but noted.