We currently have ~$315K in the fund balance.* My personal median guess is that we could use $2M over the next year while maintaining this year’s bar for funding. This would be:
$1.7M more than our current balance
$500K more per year than we’ve spent in previous years
$400K more than a naive guess for what the total amount of donations received will be in all of 2020. (That is, if we wanted a year of donations to pay for a year of funding, we would need $400K more in donations next year than what we got this year.)
Reasoning below:
Generally, we fund anything above a certain bar, without accounting explicitly for the amount of money we have. According to this policy, for the last two years, the fund has given out ~$1.5M per year, or ~$500K per grant round, and has not accumulated a significant buffer.
This round had an unusually large number of high-quality applicants. We spent $500K, but we pushed two large grant decisions to our next payout round, and several of our applicants happened to receive money from another source just before we communicated our funding decision. This makes me think that if this increase in high-quality applicants persists, it would be reasonable to have $600K - $700K per grant round, for a total of ~$2M over the next year.
My personal guess is that the increase in high-quality applications will persist, and I’m somewhat hopeful that we will get even more high-quality applications, via a combination of outreach and potentially some active grantmaking. This makes me think that $2M over the next year would be reasonable for not going below the ROI on the last marginal dollar of the grants we made this year, though I’m not certain. (Of the two other fund managers who have made quantitative guesses on this so far, one fund manager also had $2M as their median guess, while another thought slightly above $1.5M was more likely.)
I also think there’s a reasonable case for having slightly more than our median guess available in the fund. This would both act as a buffer in case we end up with more grants above our current bar than expected, and would let us proactively encourage potential grantees to apply for funding without being worried that we’ll run out of money.
If we got much more money than applications that meet our current bar, we would let donors know. I think we would also consider lowering our bar for funding, though this would only happen after checking in with the largest donors.
* This is less than the amount displayed in our fund page, which is still being updated with our latest payouts.
Really good question!
We currently have ~$315K in the fund balance.* My personal median guess is that we could use $2M over the next year while maintaining this year’s bar for funding. This would be:
$1.7M more than our current balance
$500K more per year than we’ve spent in previous years
$800K more than the total amount of donations received in 2020 so far
$400K more than a naive guess for what the total amount of donations received will be in all of 2020. (That is, if we wanted a year of donations to pay for a year of funding, we would need $400K more in donations next year than what we got this year.)
Reasoning below:
Generally, we fund anything above a certain bar, without accounting explicitly for the amount of money we have. According to this policy, for the last two years, the fund has given out ~$1.5M per year, or ~$500K per grant round, and has not accumulated a significant buffer.
This round had an unusually large number of high-quality applicants. We spent $500K, but we pushed two large grant decisions to our next payout round, and several of our applicants happened to receive money from another source just before we communicated our funding decision. This makes me think that if this increase in high-quality applicants persists, it would be reasonable to have $600K - $700K per grant round, for a total of ~$2M over the next year.
My personal guess is that the increase in high-quality applications will persist, and I’m somewhat hopeful that we will get even more high-quality applications, via a combination of outreach and potentially some active grantmaking. This makes me think that $2M over the next year would be reasonable for not going below the ROI on the last marginal dollar of the grants we made this year, though I’m not certain. (Of the two other fund managers who have made quantitative guesses on this so far, one fund manager also had $2M as their median guess, while another thought slightly above $1.5M was more likely.)
I also think there’s a reasonable case for having slightly more than our median guess available in the fund. This would both act as a buffer in case we end up with more grants above our current bar than expected, and would let us proactively encourage potential grantees to apply for funding without being worried that we’ll run out of money.
If we got much more money than applications that meet our current bar, we would let donors know. I think we would also consider lowering our bar for funding, though this would only happen after checking in with the largest donors.
* This is less than the amount displayed in our fund page, which is still being updated with our latest payouts.