I don’t quite understand why you’re comparing donated money from people earning to give to money consumed by a charity.
I think a better comparison could be to just convert everything into impact adjusted dollars imagining that you’re able to sell off your impact equity. In this scheme it’s clearer that taking more money from value aligned funders is bad, whilst taking money from non-aligned funders is roughly neutral and donating a bunch of money is very good. The charity has to essentially “pay back” in impact the value aligned funder to get itself out of a hole, whereas the for profit doesn’t need to worry about that (on impact grounds).
To be clear, I think many nonprofits do a lot of good and are well worth funding—I spend most of my time trying to fund them—but it is harder to work out net positive if you’re consuming a bunch of fungible and value aligned resources.
Thanks for the feedback! I’m not really smart enough to figure something like that out tbh, and by the point I’d seen that my realistic options were within an order of magnitude of each other (and both high-risk with high overlap) I was pretty satisfied that my decision was likely gonna hinge on something else.
Maybe your adjustment would take it outside that range but I think at the point of extreme success these charities would be selling impact at competitive rates (so funders would be getting marginal value out of them), and more than likely going to counterfactual funders (ex. government). Maybe this is truer in GHD and especially mental health than in animal welfare, which seems more concentrated. But yeah, at this point I was pretty satisfied that Kaya Guides had minimal risk of substantial funding displacement in a success scenario (I can’t be too specific about this in public), so I picked it.
(Maybe again—I’m just highlighting my specific scenario, there’s definitely an attempt to generalise here but I didn’t think too hard through it)
Makes sense. Sorry I didn’t say this before but I really appreciate your comments on this post and the high effort modelling that you did when working out what to work on. I think it’s a great example to set for the community and shows how seriously you can take these decisions (if you want to).
I think this point is really important. If the charity raises 20 million from GiveWell that’s great, but counterfactual impact is unlikely to be very big. If they raise it though from other foundations or individuals, I would say the counterfactul impact per dollar might be 5-10x as much.
But in general agree with almost everythng @huw nicely points out here.
And yes don’t expevt @huw to account for this in a calculation. I think it would be nice to have a super well-researched estimate of “Value per dollar” of givewell funding vs. other foundations, and am surprised this hasn’t been done.
If the data were available, the amount an CE charity might be able to raise on average from funders other than highly-aligned funders might work better if someone were deploying your analysis for a different decision about whether to found a CE charity vs. earn to give. You’ve mentioned that you were “satisfied that Kaya Guides had minimal risk of substantial funding displacement in a success scenario,” so it makes sense that you wouldn’t adjust for this when making your specific decision.
(The working, rough assumption here is that the average CE charity can put a dollar to use roughly as well as the average GiveWell grantee or ACE-recommended charity—so moving $1 from the latter to the former produces neither a net gain nor a net loss. That’s unlikely to be particularly correct, but it’s probably closer to the actual effect than not adjusting for where the money went counterfactually).
No, but I think that’s reasonable in most cases (although hard to figure out exactly how to allocate it).
I don’t quite understand why you’re comparing donated money from people earning to give to money consumed by a charity.
I think a better comparison could be to just convert everything into impact adjusted dollars imagining that you’re able to sell off your impact equity. In this scheme it’s clearer that taking more money from value aligned funders is bad, whilst taking money from non-aligned funders is roughly neutral and donating a bunch of money is very good. The charity has to essentially “pay back” in impact the value aligned funder to get itself out of a hole, whereas the for profit doesn’t need to worry about that (on impact grounds).
To be clear, I think many nonprofits do a lot of good and are well worth funding—I spend most of my time trying to fund them—but it is harder to work out net positive if you’re consuming a bunch of fungible and value aligned resources.
Thanks for the feedback! I’m not really smart enough to figure something like that out tbh, and by the point I’d seen that my realistic options were within an order of magnitude of each other (and both high-risk with high overlap) I was pretty satisfied that my decision was likely gonna hinge on something else.
Maybe your adjustment would take it outside that range but I think at the point of extreme success these charities would be selling impact at competitive rates (so funders would be getting marginal value out of them), and more than likely going to counterfactual funders (ex. government). Maybe this is truer in GHD and especially mental health than in animal welfare, which seems more concentrated. But yeah, at this point I was pretty satisfied that Kaya Guides had minimal risk of substantial funding displacement in a success scenario (I can’t be too specific about this in public), so I picked it.
(Maybe again—I’m just highlighting my specific scenario, there’s definitely an attempt to generalise here but I didn’t think too hard through it)
Makes sense. Sorry I didn’t say this before but I really appreciate your comments on this post and the high effort modelling that you did when working out what to work on. I think it’s a great example to set for the community and shows how seriously you can take these decisions (if you want to).
I think this point is really important. If the charity raises 20 million from GiveWell that’s great, but counterfactual impact is unlikely to be very big. If they raise it though from other foundations or individuals, I would say the counterfactul impact per dollar might be 5-10x as much.
But in general agree with almost everythng @huw nicely points out here.
And yes don’t expevt @huw to account for this in a calculation. I think it would be nice to have a super well-researched estimate of “Value per dollar” of givewell funding vs. other foundations, and am surprised this hasn’t been done.
If the data were available, the amount an CE charity might be able to raise on average from funders other than highly-aligned funders might work better if someone were deploying your analysis for a different decision about whether to found a CE charity vs. earn to give. You’ve mentioned that you were “satisfied that Kaya Guides had minimal risk of substantial funding displacement in a success scenario,” so it makes sense that you wouldn’t adjust for this when making your specific decision.
(The working, rough assumption here is that the average CE charity can put a dollar to use roughly as well as the average GiveWell grantee or ACE-recommended charity—so moving $1 from the latter to the former produces neither a net gain nor a net loss. That’s unlikely to be particularly correct, but it’s probably closer to the actual effect than not adjusting for where the money went counterfactually).