One question I have is about the extent to which this is counterfactually better than just advising foundations to dump money into GiveWell charities; or, if one thinks GiveWell is too risk adverse or too short-termist, there are other cause/intervention/charity evaluation organizations out there like CE or Open Phil or 80k etc.
I would be fairly sceptical that smaller grantmaking organizations will be as accurate at identifying cost-effective or promising opportunities relative to the established organizations like GiveWell (who have big teams and a process that has been refined and improved over the years), or even compared to smaller organizations like CE/HLI/CEARCH doing cause prioritization (whose research teams are presumably by people whose interests/abilities meant they self-selected into cause prioritization work, rather than people who by good/bad luck are put into a position where they have to disburse e.g. one’s inheritance, or the family office funds).
Having spoken to some EA-sympathetic family offices, this is basically what they’ve said (i.e. they largely prefer to outsource the decision-making, subject to non-philanthropic/political considerations like giving locally etc).
(1) Why not just give the money to strong existing foundations whose values match your own?
Greater funder diversity is a good thing. It contributes to worldview diversification within EA, and reduces the chance that important cause areas go unfunded (more on this below).
Existing foundations don’t have the capacity to do everything. The world is big—there are a lot of problems to solve, a lot of potential solutions to consider funding, and a lot that needs to be learned to do this well. As a result, most foundations make the wise decision of limiting their scope by some combination of cause area, geography and recipient organization size/maturity (e.g. GiveWell focuses on mature global health organizations that can absorb many millions in funding). In aggregate, the scopes of these foundations do not sufficiently cover all of the most important areas (see Joey’s post on specific funding gaps for example). So we need more organizations and more grantmakers working on figuring out what to fund! I’d love to see new foundations started that address some subject matter gaps, e.g. “GiveWell, but for policy interventions” or “GiveWell, but for family planning”. I’d also love to see some foundations started that fill functional niches within the funding landscape, e.g. a foundation that specialises in regranting (i.e. where their comparative advantage is in vetting people, rather than projects).
(2) Shouldn’t we be skeptical of smaller/newer grantmaking organizations because it’s hard to compete with the likes of GiveWell on accuracy?
They don’t have to compete: They can focus on the many cause areas and intervention types outside of the scope of organizations like GiveWell.
Small funders play an important role that GiveWell can’t: Yes, the level of rigor that GiveWell puts into vetting projects is hard to compete with! But because they invest so much resources into each grant decision, GiveWell is only able to consider mature organizations that can absorb tens of millions in additional funding. Meanwhile, assessing smaller, less mature organizations is very important, because (a) if no one supports them they will never become mature enough for the likes of GiveWell, (b) there are likely be extremely cost-effective opportunities that can’t ever reach GiveWell’s scale requirements.
Being small comes with other comparative advantages: For example, moving more quickly to respond to time-sensitive opportunities.
(3) Shouldn’t people who have ended up in the position of disbursing funds by random chance (e.g. through inheritance) just defer to others to make the grantmaking decisions?
It’s true that a person with a lot of funds does not by default have the skills, time or interest needed to do an excellent job at disbursing it. But:
In many cases they do have these qualities!
This program isn’t just for the owner of the funds—it is for key decision-makers within grantmaking organizations, like executive directors, senior grantmaking staff and program officers.
If the owner of the funds decides to defer to somebody else, there’s no getting around the need for them to make some key decisions themselves, for example who to hire to disburse the funds for them (i.e. who to defer to), or what they mean by ‘impact’ or ‘doing good’. We hope that our program will better equip participants to make these decisions.
Thanks Joel, I think your arguments are good, but on balance I think more EA aligned foundations can be a good thing.
Some people with entrepreneurial spirit might be wired in a way that they and the EA movement would be better served launching and growing their own foundation rather than joining an established big one. Comparative advantage and EV might be higher. Having freedom as a founder and entrepreneur means you might be more motivated and free to take more risks, and bring more EA dollars to the party than you would have if you were absorbed by another org. I can imagine participants in the program above might well be in this category.
New foundations might be able to have more diverse focus, such as to support and grow smaller organisations, which the funders you showed generally don’t do.
New foundations might have access to different pools of money than those bigger organisations. For example a Scandinavian based org might be able to access Scandinavian govt. grants that other orgs like Givewell couldn’t. Or new foundations might form unique relationships with very rich people whose money was previously untapped.
As another kind of side note in general I think EA might need to be careful in the long term about the (almost) monopoly or at least high market share Givewell has on development focused cause prioritisation at the moment. You’re right that their processes and institutional knowledge makes it hard to imagine anyone else could do it better (although organisations like HLI are trying which is great). It’s interesting that something like 70% of the money given by CEA members went to a Givewell fund. I think there is inherent value in managing risk and potential error through foundation diversification but that is obviously arguable (this has been discussed before in forum posts). Imagine (hypothetically) that there was a corruption or sex scandal within Givewell and the overwhelming damage that might do the EA movement. That might be mitigated if there were a bunch more big orgs. I think it’s healthy to have more diversity than we do at the moment.
That strategy is contingent on the foundation’s donor being open to spending money on the types of programs GiveWell (or another elite evaluator) recommends. Many are not. If they are not, then the expected value of that approach is zero. Rather, we need to meet those donors closer to where they are and help them more effectively achieve their own goals (with some nudges toward highly effective organizations, to be sure). They have lots of other people who are happy to give them free advice on how to spend their millions, and “you should jettison all your goals/thoughts and adopt ours 100% instead” is unlikely to help win market share in the market of already-funded foundations.
For those donors, say that these foundations will be handing out $60MM per year as per the report, and that the training increased the mean cost-effectiveness of their donations from 0.1 GiveWells to 0.2 GiveWells (i.e., it only brought them 11% of the distance from where they were to full GiveWell). I think there’s a decent chance that the mentored foundations will devote at least a few percent to GiveWell-level charities on average, and that the rest of their portfolio will move in a somewhat more cost-effective direction. That produces an amount of good equivalent to $6MM in new funds that would have blown on something totally useless going to GiveWell instead. And that’s in a single year. So even if you think the effect size is much more modest, 0.1 GiveWells to 0.12 GiveWells would still be $1.2MM GiveWell-equivalents every year.
Compared to the marginal cost of re-running this program, that seems like a great investment.
Sounds great!
One question I have is about the extent to which this is counterfactually better than just advising foundations to dump money into GiveWell charities; or, if one thinks GiveWell is too risk adverse or too short-termist, there are other cause/intervention/charity evaluation organizations out there like CE or Open Phil or 80k etc.
I would be fairly sceptical that smaller grantmaking organizations will be as accurate at identifying cost-effective or promising opportunities relative to the established organizations like GiveWell (who have big teams and a process that has been refined and improved over the years), or even compared to smaller organizations like CE/HLI/CEARCH doing cause prioritization (whose research teams are presumably by people whose interests/abilities meant they self-selected into cause prioritization work, rather than people who by good/bad luck are put into a position where they have to disburse e.g. one’s inheritance, or the family office funds).
Having spoken to some EA-sympathetic family offices, this is basically what they’ve said (i.e. they largely prefer to outsource the decision-making, subject to non-philanthropic/political considerations like giving locally etc).
In any case, keep up the great work, as always.
Thanks for the thoughtful question Joel!
I’ll take this question in three parts:
(1) Why not just give the money to strong existing foundations whose values match your own?
Greater funder diversity is a good thing.
It contributes to worldview diversification within EA, and reduces the chance that important cause areas go unfunded (more on this below).
Existing foundations don’t have the capacity to do everything.
The world is big—there are a lot of problems to solve, a lot of potential solutions to consider funding, and a lot that needs to be learned to do this well. As a result, most foundations make the wise decision of limiting their scope by some combination of cause area, geography and recipient organization size/maturity (e.g. GiveWell focuses on mature global health organizations that can absorb many millions in funding). In aggregate, the scopes of these foundations do not sufficiently cover all of the most important areas (see Joey’s post on specific funding gaps for example). So we need more organizations and more grantmakers working on figuring out what to fund!
I’d love to see new foundations started that address some subject matter gaps, e.g. “GiveWell, but for policy interventions” or “GiveWell, but for family planning”. I’d also love to see some foundations started that fill functional niches within the funding landscape, e.g. a foundation that specialises in regranting (i.e. where their comparative advantage is in vetting people, rather than projects).
(2) Shouldn’t we be skeptical of smaller/newer grantmaking organizations because it’s hard to compete with the likes of GiveWell on accuracy?
They don’t have to compete: They can focus on the many cause areas and intervention types outside of the scope of organizations like GiveWell.
Small funders play an important role that GiveWell can’t: Yes, the level of rigor that GiveWell puts into vetting projects is hard to compete with! But because they invest so much resources into each grant decision, GiveWell is only able to consider mature organizations that can absorb tens of millions in additional funding. Meanwhile, assessing smaller, less mature organizations is very important, because (a) if no one supports them they will never become mature enough for the likes of GiveWell, (b) there are likely be extremely cost-effective opportunities that can’t ever reach GiveWell’s scale requirements.
Being small comes with other comparative advantages: For example, moving more quickly to respond to time-sensitive opportunities.
(3) Shouldn’t people who have ended up in the position of disbursing funds by random chance (e.g. through inheritance) just defer to others to make the grantmaking decisions?
It’s true that a person with a lot of funds does not by default have the skills, time or interest needed to do an excellent job at disbursing it. But:
In many cases they do have these qualities!
This program isn’t just for the owner of the funds—it is for key decision-makers within grantmaking organizations, like executive directors, senior grantmaking staff and program officers.
If the owner of the funds decides to defer to somebody else, there’s no getting around the need for them to make some key decisions themselves, for example who to hire to disburse the funds for them (i.e. who to defer to), or what they mean by ‘impact’ or ‘doing good’. We hope that our program will better equip participants to make these decisions.
Thanks Joel, I think your arguments are good, but on balance I think more EA aligned foundations can be a good thing.
Some people with entrepreneurial spirit might be wired in a way that they and the EA movement would be better served launching and growing their own foundation rather than joining an established big one. Comparative advantage and EV might be higher. Having freedom as a founder and entrepreneur means you might be more motivated and free to take more risks, and bring more EA dollars to the party than you would have if you were absorbed by another org. I can imagine participants in the program above might well be in this category.
New foundations might be able to have more diverse focus, such as to support and grow smaller organisations, which the funders you showed generally don’t do.
New foundations might have access to different pools of money than those bigger organisations. For example a Scandinavian based org might be able to access Scandinavian govt. grants that other orgs like Givewell couldn’t. Or new foundations might form unique relationships with very rich people whose money was previously untapped.
As another kind of side note in general I think EA might need to be careful in the long term about the (almost) monopoly or at least high market share Givewell has on development focused cause prioritisation at the moment. You’re right that their processes and institutional knowledge makes it hard to imagine anyone else could do it better (although organisations like HLI are trying which is great). It’s interesting that something like 70% of the money given by CEA members went to a Givewell fund. I think there is inherent value in managing risk and potential error through foundation diversification but that is obviously arguable (this has been discussed before in forum posts). Imagine (hypothetically) that there was a corruption or sex scandal within Givewell and the overwhelming damage that might do the EA movement. That might be mitigated if there were a bunch more big orgs. I think it’s healthy to have more diversity than we do at the moment.
That strategy is contingent on the foundation’s donor being open to spending money on the types of programs GiveWell (or another elite evaluator) recommends. Many are not. If they are not, then the expected value of that approach is zero. Rather, we need to meet those donors closer to where they are and help them more effectively achieve their own goals (with some nudges toward highly effective organizations, to be sure). They have lots of other people who are happy to give them free advice on how to spend their millions, and “you should jettison all your goals/thoughts and adopt ours 100% instead” is unlikely to help win market share in the market of already-funded foundations.
For those donors, say that these foundations will be handing out $60MM per year as per the report, and that the training increased the mean cost-effectiveness of their donations from 0.1 GiveWells to 0.2 GiveWells (i.e., it only brought them 11% of the distance from where they were to full GiveWell). I think there’s a decent chance that the mentored foundations will devote at least a few percent to GiveWell-level charities on average, and that the rest of their portfolio will move in a somewhat more cost-effective direction. That produces an amount of good equivalent to $6MM in new funds that would have blown on something totally useless going to GiveWell instead. And that’s in a single year. So even if you think the effect size is much more modest, 0.1 GiveWells to 0.12 GiveWells would still be $1.2MM GiveWell-equivalents every year.
Compared to the marginal cost of re-running this program, that seems like a great investment.