Thanks for your comment! To clarify, our funding bar being 10x cash doesn’t mean that every grant we make will be to things that are 10x cash – it means that we’ll generally fund all of the programs we find that are above 10x, and not the ones that we estimate to be below 10x (with caveats that sometimes we will/won’t make grants that fall on either side of that line for other reasons not captured in the CEA, e.g. learning value). You can read more on how we make funding decisions here.
Many of the grants we make are above 10x, including a fair amount in the 10-20x range (like this recent CHAI grant – we estimate delivering the program is ~17x cash, not counting the evaluation grants). Using Against Malaria Foundation (AMF) as an example, we fund net distribution campaigns in specific geographic regions that meet our 10x bar (see this grant made to AMF in January 2022 that supports net distribution campaigns in three Nigerian states). Theoretically, if we evaluated six states for net distribution campaigns and only four states met our criteria to be above 10x, we would only fund those four and not the other two, and the average cost-effectiveness across those 4 states would be higher than 10x.
It makes sense that your grants have a cost-effectiveness higher that your bar of 10 times that of cash. However, I wonder whether the cost-effectiveness of the last dollar of each of your grants is around 10 times that of cash. For example, you recommended 8.2 M$ to AMF in January 2022, and estimated the cost-effectiveness to be 12 times that of cash. However, if I donate 1 k$ to All Grants Fund, the cost-effectiveness of my donation will be 10 times that of cash, right? Due to diminishing returns, the cost-effectiveness of my donation would be lower than that of your grants, but I am not sure whether you select the size of your grants such that their last dollar has a cost-effectiveness of 10 times that of cash.
We don’t select/structure our grants such that we necessarily think the “last dollar” or marginal dollar to that grant is 10x cash. For example: if there was a discrete $5M funding opportunity to support a program in a specific area, we might model the cost-effectiveness of that opportunity as say, 15x overall, but there wouldn’t be any particular reason to think the ‘last dollar’ was more like 10x. Generally, when it comes to funding discrete opportunities (e.g. vaccination promotion in a certain state in Nigeria), we don’t tend to think about the value of the first versus last dollar for that discrete opportunity, because we’re often making a binary decision about whether to support the program in that area at all. Hope this clarifies!
Thanks for the helpful clarification! I would be curious to know whether you have explicitly modelled diminishing returns in the context of assessing non-discrete opportunities.
We’ve haven’t explicitly modeled diminishing returns in this way. Most of the opportunities we consider are for specific pre-defined gaps, so they’re more discrete than something you can really scale in that continuous type of way.
If right after AMF received the grant you recommended, I donated 1 k$ to AMF, would the cost-effectiveness of my donation be 10 times that of cash?
I’d guess so, given how large AMF’s room for more funding is (GW as of July ’22, AMF CEO on 300 M$ shortfall 2024-26), but I’m also curious to know what GW has to say.
That said, one consideration pushing the cost-effectiveness bar up and one down:
up: cf. 2nd bullet in section 4.2, GW’s AMF model reports effectiveness per philanthropic dollar, but I don’t care about that; I care about my own philanthropic dollar. This overcounts the cost denominator by 47-133% depending on region
down: if you donated directly to AMF, it’s likely they may fund net distribution according to their internally-prioritized considerations, while if you donate via GW they’ll (quoting GW’s response to you above) “fund net distribution campaigns in specific geographic regions that meet [their] 10x bar” which isn’t an option available to you specifically. This is part of my own reasoning for not donating directly to charities; I’m also mostly persuaded by GWWC’s funds-over-charities argument. Perhaps this isn’t really what you meant though, in which case I apologize for misconstruing
I’d guess so, given how large AMF’s room for more funding is (GW as of July ’22, AMF CEO on 300 M$ shortfall 2024-26), but I’m also curious to know what GW has to say.
Makes sense. Large room for more funding means the cost-effectiveness of additional funds would match that of the last dollar of the big grant. However, GiveWell’s cost-effectiveness estimates of AMF do not depend on the size of the donation:
So I do not think GiveWell’s cost-effectiveness sheet is modelling diminishing returns, but this seems important to infer the cost-effectiveness of the last dollar of their grants.
This is part of my own reasoning for not donating directly to charities; I’m also mostly persuaded by GWWC’s funds-over-charities argument. Perhaps this isn’t really what you meant though, in which case I apologize for misconstruing
Good catch! I had in mind donating 1 k$ to the same programs the big grant was supporting, but as you said this would not be possible by donating to AMF, so I will update my comment above. Now it is about donating to All Grants Fund at any time instead of donating to AMF after a big grant from GiveWell.
Hi Vasco,
Thanks for your comment! To clarify, our funding bar being 10x cash doesn’t mean that every grant we make will be to things that are 10x cash – it means that we’ll generally fund all of the programs we find that are above 10x, and not the ones that we estimate to be below 10x (with caveats that sometimes we will/won’t make grants that fall on either side of that line for other reasons not captured in the CEA, e.g. learning value). You can read more on how we make funding decisions here.
Many of the grants we make are above 10x, including a fair amount in the 10-20x range (like this recent CHAI grant – we estimate delivering the program is ~17x cash, not counting the evaluation grants). Using Against Malaria Foundation (AMF) as an example, we fund net distribution campaigns in specific geographic regions that meet our 10x bar (see this grant made to AMF in January 2022 that supports net distribution campaigns in three Nigerian states). Theoretically, if we evaluated six states for net distribution campaigns and only four states met our criteria to be above 10x, we would only fund those four and not the other two, and the average cost-effectiveness across those 4 states would be higher than 10x.
Thanks for clarifying!
It makes sense that your grants have a cost-effectiveness higher that your bar of 10 times that of cash. However, I wonder whether the cost-effectiveness of the last dollar of each of your grants is around 10 times that of cash. For example, you recommended 8.2 M$ to AMF in January 2022, and estimated the cost-effectiveness to be 12 times that of cash. However, if I donate 1 k$ to All Grants Fund, the cost-effectiveness of my donation will be 10 times that of cash, right? Due to diminishing returns, the cost-effectiveness of my donation would be lower than that of your grants, but I am not sure whether you select the size of your grants such that their last dollar has a cost-effectiveness of 10 times that of cash.
We don’t select/structure our grants such that we necessarily think the “last dollar” or marginal dollar to that grant is 10x cash. For example: if there was a discrete $5M funding opportunity to support a program in a specific area, we might model the cost-effectiveness of that opportunity as say, 15x overall, but there wouldn’t be any particular reason to think the ‘last dollar’ was more like 10x. Generally, when it comes to funding discrete opportunities (e.g. vaccination promotion in a certain state in Nigeria), we don’t tend to think about the value of the first versus last dollar for that discrete opportunity, because we’re often making a binary decision about whether to support the program in that area at all. Hope this clarifies!
Thanks for the helpful clarification! I would be curious to know whether you have explicitly modelled diminishing returns in the context of assessing non-discrete opportunities.
We’ve haven’t explicitly modeled diminishing returns in this way. Most of the opportunities we consider are for specific pre-defined gaps, so they’re more discrete than something you can really scale in that continuous type of way.
I’d guess so, given how large AMF’s room for more funding is (GW as of July ’22, AMF CEO on 300 M$ shortfall 2024-26), but I’m also curious to know what GW has to say.
That said, one consideration pushing the cost-effectiveness bar up and one down:
up: cf. 2nd bullet in section 4.2, GW’s AMF model reports effectiveness per philanthropic dollar, but I don’t care about that; I care about my own philanthropic dollar. This overcounts the cost denominator by 47-133% depending on region
down: if you donated directly to AMF, it’s likely they may fund net distribution according to their internally-prioritized considerations, while if you donate via GW they’ll (quoting GW’s response to you above) “fund net distribution campaigns in specific geographic regions that meet [their] 10x bar” which isn’t an option available to you specifically. This is part of my own reasoning for not donating directly to charities; I’m also mostly persuaded by GWWC’s funds-over-charities argument. Perhaps this isn’t really what you meant though, in which case I apologize for misconstruing
Nice points, Mo!
Makes sense. Large room for more funding means the cost-effectiveness of additional funds would match that of the last dollar of the big grant. However, GiveWell’s cost-effectiveness estimates of AMF do not depend on the size of the donation:
So I do not think GiveWell’s cost-effectiveness sheet is modelling diminishing returns, but this seems important to infer the cost-effectiveness of the last dollar of their grants.
Good catch! I had in mind donating 1 k$ to the same programs the big grant was supporting, but as you said this would not be possible by donating to AMF, so I will update my comment above. Now it is about donating to All Grants Fund at any time instead of donating to AMF after a big grant from GiveWell.