From an internal perspective I’d view the fund as being fairly close to risk-neutral. We hear around twice as many complaints that we’re too risk-tolerant than too risk-averse, although of course the people who reach out to us may not be representative of our donors as a whole.
We do explicitly try to be conservative around things with a chance of significant negative impact to avoid the unilateralist’s curse. I’d estimate this affects less than 10% of our grant decisions, although the proportion is higher in some areas, such as community building, biosecurity and policy.
It’s worth noting that, unless I see a clear case for a grant, I tend to predict a low expected value—not just a high-risk opportunity. This is because I think most projects aren’t going to positively influence the long-term future—otherwise the biggest risks to our civilization would already be taken care of. Based on that prior, it takes significant evidence to update me in favour of a grant having substantial positive expected value. This produces similar decisions to risk-aversion with a more optimistic prior.
Unfortunately, it’s hard to test this prior: we’d need to see how good the grants we didn’t make would have been. I’m not aware of any grants we passed on that turned out to be really good. But I haven’t evaluated this systematically, and we’d only know about those which someone else chose to fund.
An important case where donors may be better off making donations themselves rather than donating via us is when they have more information than we do about some promising donation opportunities. In particular, you likely hear disproportionately about grants we rejected from people already in your network. You may be in a much better position to evaluate these than we are, especially if the impact of the grant hinges on the individual’s abilities, or requires a lot of context to understand.
It’s unfortunate that individual donors can’t directly make grants to individuals in a tax efficient manner. You could consider donating to a donor lottery—these will allow you to donate the same amount of money (in expectation) in a tax efficient manner. While grants can only be made within CEA’s charitable objects, this should cover the majority of things donors would want to support, and in any case the LTFF also faces this restriction. (Jonas also mentioned to me that EA Funds is considering offering Donor-Advised Funds that could grant to individuals as long as there’s a clear charitable benefit. If implemented, this would also allow donors to provide tax-deductible support to individuals.)
Jonas also mentioned to me that EA Funds is considering offering Donor-Advised Funds that could grant to individuals as long as there’s a clear charitable benefit. If implemented, this would also allow donors to provide tax-deductible support to individuals.
This is pretty exciting to me. Without going into too much detail, I expect to have a large amount of money to donate in the near future, and LTF is basically the best option I know of (in terms of giving based on what I most want to give to) for the bulk of that money short of having the ability to do exactly this. I’d still want LTF as a fall back for funds I couldn’t figure out how to better allocate myself, but the need for tax deductibility limits my options today (though, yes, there are donor lotteries).
Interested in talking more about this – sent you a PM!
EDIT: I should mention that this is generally pretty hard to implement, so there might be a large fee on such grants, and it might take a long time until we can offer it.
From an internal perspective I’d view the fund as being fairly close to risk-neutral. We hear around twice as many complaints that we’re too risk-tolerant than too risk-averse, although of course the people who reach out to us may not be representative of our donors as a whole.
We do explicitly try to be conservative around things with a chance of significant negative impact to avoid the unilateralist’s curse. I’d estimate this affects less than 10% of our grant decisions, although the proportion is higher in some areas, such as community building, biosecurity and policy.
It’s worth noting that, unless I see a clear case for a grant, I tend to predict a low expected value—not just a high-risk opportunity. This is because I think most projects aren’t going to positively influence the long-term future—otherwise the biggest risks to our civilization would already be taken care of. Based on that prior, it takes significant evidence to update me in favour of a grant having substantial positive expected value. This produces similar decisions to risk-aversion with a more optimistic prior.
Unfortunately, it’s hard to test this prior: we’d need to see how good the grants we didn’t make would have been. I’m not aware of any grants we passed on that turned out to be really good. But I haven’t evaluated this systematically, and we’d only know about those which someone else chose to fund.
An important case where donors may be better off making donations themselves rather than donating via us is when they have more information than we do about some promising donation opportunities. In particular, you likely hear disproportionately about grants we rejected from people already in your network. You may be in a much better position to evaluate these than we are, especially if the impact of the grant hinges on the individual’s abilities, or requires a lot of context to understand.
It’s unfortunate that individual donors can’t directly make grants to individuals in a tax efficient manner. You could consider donating to a donor lottery—these will allow you to donate the same amount of money (in expectation) in a tax efficient manner. While grants can only be made within CEA’s charitable objects, this should cover the majority of things donors would want to support, and in any case the LTFF also faces this restriction. (Jonas also mentioned to me that EA Funds is considering offering Donor-Advised Funds that could grant to individuals as long as there’s a clear charitable benefit. If implemented, this would also allow donors to provide tax-deductible support to individuals.)
This is pretty exciting to me. Without going into too much detail, I expect to have a large amount of money to donate in the near future, and LTF is basically the best option I know of (in terms of giving based on what I most want to give to) for the bulk of that money short of having the ability to do exactly this. I’d still want LTF as a fall back for funds I couldn’t figure out how to better allocate myself, but the need for tax deductibility limits my options today (though, yes, there are donor lotteries).
Interested in talking more about this – sent you a PM!
EDIT: I should mention that this is generally pretty hard to implement, so there might be a large fee on such grants, and it might take a long time until we can offer it.