Hey, I wanted to clarify that Open Phil gave most of the funding for the purchase of Wytham Abbey (a small part of the costs were also committed by Owen and his wife, as a signal of “skin in the game”). I run the Longtermist EA Community Growth program at Open Phil (we recently launched a parallel program for EA community growth for global health and wellbeing, which I don’t run) and I was the grant investigator for this grant, so I probably have the most context on it from the side of the donor. I’m also on the board of the Effective Ventures Foundation (EVF).
Why did we make the grant?There are two things I’d like to discuss about this, the process we used/context we were in, and our take on the case for the grant. I’ll start with the former.
Process and context: At the time we committed the funding (November 2021, though the purchase wasn’t completed until April 2022), there was a lot more apparent funding available than there is today, both from Open Phil and from the Future Fund. Existential risk reduction and related efforts seemed to us to have a funding overhang, and we were actively looking for more ways to spend money to support more good work, especially by encouraging more people to dedicate their careers to addressing the associated risks. Also, given the large amounts of funding available at the time, and relatively lower number of grantmakers, we wanted to experiment with decentralizing some influence over funding to other people with experience in the space who understood our long-run priorities but had visions for how to use the funding that were somewhat different from our grantmakers’.
So, we were experimenting with more defaulting to saying “yes” to shovel-ready grant requests that seemed aimed at our core priorities, especially when they didn’t require enormous amounts of funding. (As others have noted and as I’ll explain below, we modeled the amount of funding at stake here as being in the low millions of dollars, rather than the higher sticker price, since it was to purchase a durable asset that can be resold.)
What did we think about this grant? In the abstract, we thought the idea of buying real estate to use for events was a reasonable one.
When evaluating a grant, my team tends to focus on the question “to what extent (per dollar) will this grant result in more promising people focusing their careers on doing as much good as possible in our longtermist focus areas?” (Other Open Philanthropy programs use different criteria.) I and other people on my team have invested a fair amount in collecting data and developing metrics for evaluating the value-for-money of grants aimed at this goal, though also it’s still a work in progress in many ways.
When we surveyed ~200 people involved or interested in longtermist work, we found that many had been strongly influenced by in-person events they’d attended, particularly ones where people relatively new to a topic came into contact with relatively experienced people working full-time in that area. (Some other data and our general experiences in the space are largely supportive of this too). Overall, we feel fairly confident in-person events like workshops, learning retreats, and conferences can be very impactful for people considering big career changes, and have historically often been good value-for-money via helping people interested in our longtermist focus areas make professional connections and deepen their understanding about these topics.
We support projects that cumulatively run dozens of events per year (disproportionately in the Bay Area and UK), and we saw several reasons a venue purchase could be valuable for both increasing the number and quality of impactful events, and potentially saving some money:
The number of events was growing fast.
Suitable venues are often of limited availability and book up far in advance, making more spontaneous events challenging.
Rented venues sometimes have issues that aren’t discovered until an event has begun (and we’ve seen events go substantially worse, or have to execute difficult mid-event moves, because of issues arising with the venues after the event was already underway).
Ops capacity to organize before and after events is a resource we value highly. Organizing and preparing for events takes more time and may go worse on average when you need to orient to the layout of different venues, move in and out all the equipment, learn about new areas (and travel to/from them) and available vendors that the event allows, etc.
Renting venues varies a lot in price, but venues for events near top EA hubs can be very expensive. Often, the cost of the venues was in the $30-100k range (though there were also smaller, shorter events aimed at students with venue costs in the $10k-ish range, and large conferences can be much more expensive).
Other locations are often cheaper, but have a more difficult time attracting busy professionals, relative to ones that take place near where they live, and demand more time from ops staff, senior staff, and (sometimes) instructors helping with events (and, we generally highly value all those folks’ time, even if they are willing to travel).
The fact that the funding was going to be used to purchase a durable asset means that for the purposes of our cost-effectiveness analysis, we modeled the financial stakes as being somewhere in the low millions (rather than the meaningfully higher sticker price of the property). Our grantees also stood to potentially save money through the investment, since they wouldn’t end up paying rental costs to run their events. We still wouldn’t have been surprised if the investment turned out net negative from a financial perspective, but losing most of the investment seemed unlikely. Given this model of the costs, we thought it was consistent with our overall experiment in lowering barriers to longtermist funding to “default to yes” for a shovel-ready grant.
We discussed Owen’s reasoning behind selecting this kind of venue, and we thought it broadly made sense. The main goal was to have a venue relatively near Oxford with sufficient capacity for the types of events we thought could be highly impactful.
Despite the points above, we were relatively uncertain about this specific opportunity, and there was some internal debate over the amount and structure of our funding; we also expressed our uncertainty to Owen.
We were mainly uncertain about:
Owen being the person driving this forward, despite him not wanting to be the main point person actually helping oversee the property and run relevant events over the next few years
Whether refurbishing and maintaining the property would end up being much more time-consuming and expensive than Owen forecasted
Whether the process was moving too quickly and whether more should be done to investigate the state and expected value of the property, and whether a better opportunity might arise in the coming years
Whether the number and kinds of events (and the value of those events) had been sufficiently well-scoped, and whether this venue would prove a good fit for a sufficient fraction of them.
Internally at OP (including with our communications team), we discussed how this would reflect on us somewhat, but mostly from the perspective of us as a funder, rather than the wider ecosystem as a whole. I think that it was a mistake on my part that the funding conversations didn’t focus more on that broader question, and I regret it, though I think we should have a high bar to rejecting otherwise solid-seeming grants on optics grounds because that kind of approach can be hard to limit and then can end up being surprisingly costly to impact. (My recollection is that we thought of it mainly as a longtermist/existential risk reduction field resource and didn’t think enough about how what was then called CEA providing fiscal sponsorship might make it sound more like an EA project.)
We also told Owen that we would want to check in about venue usage and think about the value it was generating in terms of the community growth metrics we generally use, and discuss selling the property if it didn’t seem like things were going well. (Proceeds from a sale would be used as general funding within EVF, and that funding would replace some of our and other funders’ future grants to EVF.)
Where do I stand on this grant now? With the huge decline in available funds since November 2021, I don’t know whether we’d make this grant again today. I still think it could turn out to be importantly effort-saving and event-increasing-and-improving relative to regularly renting one-off event venues, and it could also lead to a higher number of impactful events being run. But it’s currently too soon to say whether the usage will justify the investment. If we were considering a similar grant now, we’d want to get more into the details of modeling the effective financial cost (incorporating the resale possibility), hammering out plans and predictions for future operations and usage, etc. but I think we might consider it to be good enough value-for-money that we’d want to go forward with some possible projects in this vein.
Why isn’t there a published grant page right now? (This isn’t my domain but) we typically aim to publish grants within three months of when we make our initial payment, but we’re currently working through a backlog of older grants. Wytham is one of many grants in that category.
I think your team correctly concluded that in-person events are enormously valuable for people making big career changes, but running in-person events are expensive and super logistically challenging. I think logistics are somewhat undervalued in the EA community, e.g. I read a lot of criticism along the lines of, “Why don’t community organizers or EAGs just do some extremely time costly thing,” without much appreciation for how hard it is to get things to happen.
From this perspective, lowering the barrier for in-person events by buying a conference venue seems like a reasonable investment. It’s fine to scrutinize the details (were there better deals given location/size constraints?), but I would like more critics of this purchase to acknowledge how buying a conference center has a lot of benefits.
I have heard it said that large funders often ask for a seat on the Board of charities they fund. I’ve never actually heard of a concrete example of this, but I’m happy to take it on faith.
What I’m more surprised about is that the funder would appoint someone to the Board who then assesses grant applications from that nonprofit. This is surely an unavoidable conflict of interest—the Board member has a direct interest in gaining the grant for the nonprofit, even if it’s not in the grantor’s best interests to award it. Is there any way this could not be considered a conflict of interest?
It also seems easy to defuse this conflict, by having other staff at the grantor assess the grant application. Surely someone else at Open Phil could have assessed this application?
Candidly, I’m astounded that someone can assess a £10m+ grant application on behalf of their employer, when they sit on the Board of the applicant.
I have heard it said that large funders often ask for a seat on the Board of charities they fund. I’ve never actually heard of a concrete example of this, but I’m happy to take it on faith.
It is definitely the case that large investors in startups often take board seats, to help oversee the company, make sure their investment is being spent wisely, and gather information to help decide on subsequent investments. Indeed, I would consider this to be a best practice, and if a >50% investor didn’t take a board seat it would be worth asking why not!
Similarly, rather than causing a problem for OpenPhil, I think of Claire’s joining the CEA board as being an action she took on behalf of OpenPhil.
Yes indeed—I do know of many examples of this. But I don’t know of any in the charitable sector. Do you? Every time I have asked people for an example of this, they have used the same example you have from the private sector.
I think this is worth investigating for two reasons. First, I think it may be one of those things that everybody knows is true, except it isn’t. I’ve worked in nonprofits for 12 years and have submitted at least 200 funding bids and won funding from at least 50 unique grantmakers and I have never come across this. (Btw, if it exists, I think it may be a US thing, where most of my experience with grantors has been in the UK.)
Second, I think it would be useful to see how the inherent conflict of interest is handled when this happens (if it does happen). Because, for example, it seems a very simple way to negate the conflict of interest would be for one person from the grantmaker to sit on the Board, and another to assess that charity’s future grant applications. I wonder if that is common, or if it more common to have someone sit on both sides of the transaction, because their extra understanding outweighs the CoI.
I think you’ve only asked the first of the three relevant questions—is there a conflict? is it waivable? has it been waived?
I think this one is waivable jointly by Open Phil and the ultimate donor. Open Phil, to whom the presumptive duty of conflict-free advice is owed, can determine that the benefits of having someone with inside knowledge evaluate the grant outweighs the concern about a dual role. And it is pretty clear that Open Phil has done so. If Open Phil is making a grant recommendation to a funder, the dual relationship should be—and hopefully was—known to that funder.
I see your point Jason, and don’t dispute that Open Phil has chosen to waive any CoI, or that they may have felt that the advantages outweighed the conflict.
But I’m not sure that is really the relevant question (or at least, not the only relevant question), because any org can choose to waive a CoI—it doesn’t necessarily mean it should have. Or, to put it another way, it’s possible for an organisation to overlook a CoI but for the CoI still to exist and to be material.
For example, a common CoI is that someone on the Board offers paid services to the charity (or a business or person connected to that Board member offers paid services).
There are then guidelines for how the Board should assess this against the market, and (which is relevant in this case) exclude the conflicted Board member from discussions. They can then accept the offer and pay for the services.
However, despite all this, imagine it came to light that my wife had offered services to One for the World, and had been accepted, and then had made, say, $300k doing this in the last 3 years. And imagine we followed the relevant procedure in her winning this business. I am still very sceptical that it would be sufficient to say “well OFTW waived the conflict of interest” and expect this to past muster. Certainly I doubt that would pass our audit.
For a relevant real life example, this actually happened recently with the NRA, who commissioned millions of dollars of services from Wayne LaPierre and his wife, and are now being sued for corruption and have their charitable registration under threat. Clearly it wasn’t considered sufficient for them to say ‘we waived the conflict of interest’ here.
To be clear, I’m obviously not suggesting at all that this Open Phil situation is analogous to the NRA—I’m just saying that ‘we looked at the conflict of interest and decided it was ok’ isn’t the end of the discussion (and isn’t a conclusive defence).
And, as I keep coming back to, I think there was a really simple way to negate this entire discussion and the appearance of a conflict, simply by having literally anyone else at Open Phil do the grant investigation (although I acknowledge that this grant will have gone through multiple levels of sign off and review).
Thanks for the insightful comment, Jack. I should have been clearer that “is it waivable” has both a procedural and a substantive component—a non-conflicted organizational authority needs to determine that waiver is in the best interests of the organization. And it’s certainly reasonable for people to think that it would have been preferable for OP to take a different approach.
But on the known facts, I conclude that a decision to waive would be reasonable on the best-interests standard: Claire had no personal interest in the grant outcome, and is basically on EVF’s board at OP’s request as its representative-of-sorts (rather than her happening to be on the board of a grant-seeking organization for her personal reasons). I still think there is a COI there, but I would rate it as fairly mild when viewed through the eyes of an observer with knowledge of all relevant facts.
I don’t think the alternative of having someone else do the grant investigation actually achieves the same benefit to OP. If you think Claire has a COI and needs to recuse, then she needs to be walled off from OP’s evaluation of this grant altogether. But that defeats OP’s presumed purpose of having Claire on EVF’s board in the first place—to be able to use the information and experience she obtained in evaluating grant proposals instead of relying more heavily on EVF’s submissions. If OP thinks that is an important advantage, having the grant investigator on EVF’s board seems to be the only way to get it. I guess you could have a different grant investigator with Claire merely providing input in some fashion . . . but in my book, that’s just getting some of the potential benefit while accepting some of the COI. I think that’s an important distinction from your OFTW hypothetical—in that hypothetical, there were likely other vendors from whom the organization could have purchased the same services from.
Finally, there are some other background facts that make me apply a more deferential standard of review to OP’s waiver decision here:
I don’t think either OP or the ultimate donor are publicly-supported charities in any meaningful sense of that characterization. I am less flexible with COI waivers for publicly-supported charities, because the waiving authority is serving as a psuedo-proxy/trustee for the relevant stakeholders (donors, in the case of a grant) whose individual consent is not practical to obtain.
As you mentioned, presumably the grant would have gone through multiple levels of sign off and review.
If the person with a conflict has too much sway in the organization, a reasonable observer could question whether the waiver decisionmaker can actually decide whether to waive in an impartial manner. I don’t have any reason to believe Claire has anywhere near the kind of influence at OP that, say, LaPierre did at NRA.
I think you are absolutely right to be vigilant about COI issues, and I would probably agree with your position if some of these facts were different. I’m just not concerned by this one on these facts.
Thanks for this Jason—very helpful and illuminating.
I wasn’t aware that Claire specifically joined CEA’s Board at OP’s request. Where did you find this?
I also agree with your point 3 that LaPierre clearly had the opportunity to influence the decision not to consider the CoI material in a corrupt way, which Claire didn’t; and that Claire didn’t gain personally from this grant.
To be clear, my assumption is that no one acted in bad faith. However, I’m still very uncomfortable with someone sitting on both sides of a £10m transaction. This meets my materiality threshold for taking significant extra steps to avoid even the appearance of a CoI. I guess this whole OP and thread demonstrates why this might be worth doing, as the grant itself is contentious.
One possible concern here is that Claire would use her position at OPP to direct extra resources to EV. I don’t see how her being on the board increases that risk, relative to merely being a heavily involved investigator.
Another possible concern is that she will use OPP’s power to manipulate EV, to the detriment of it/its donors. That’s definitely possible, but it was always possible because OPP is such a large donor. Being on the board increases legibility much more than power, which is broadly good.
I think the actual concern might be something like “OPP and CEA feel like they’re coordinating more than they should.” They definitely are coordinating in ways Safeway and GE do not, or even GiveWell and AMF (I think but have not verified). I think you’re right to think of them as less than totally independent, due to this connection and others. I don’t think that’s inherently a problem. I think there’s some obligation on both their part to make this obvious to donors, and the number of surprised and angry people suggests they failed at that. But I don’t see anything inherently wrong with organizations coordinating to fulfill mutual goals
Thanks for this. Interestingly, I wasn’t especially concerned about the things you list, although I do think they are all risks. I agree that they are possible, but also agree that they are unlikely to be material. Indeed, I feel bad for focusing mainly on Claire and this transaction, because I have no reason to think they are anything but a great trustee and great program officer.
My concern is broader than this—unfortunately, I see this transaction as one fairly prominent example of a pattern.
EA orgs tolerate an unusually large number of conflicts of interest. A relatively small group of people sit on multiple Boards and orgs; it is not unusual for people to sit on both sides of very large transactions; sometimes the biggest recipients of funding are organizations where the grantor’s trustees work, or where they are trustees, or similar; etc. We saw this in particular with FTX but it is true across the EA ecosystem.
This is contrary to just about any accepted governance norms. Many of these conflicts could be managed fairly easily, for example by using conflicted people as advisors rather than trustees; by asking disinterested people to assess grant bids and interested people to recuse themselves; etc. However, this rarely seems to happen, even in cases where there is an incredibly strong prima facie case for doing so, like this one. So I think the pattern is that EA orgs/leaders are less bothered by conflicts than I/people familiar with governance would expect; and that they tend to just acknowledge the conflict and then assume everyone will both a) act in good faith (largely true, I expect) and b) make the best decisions possible (trickier).
I think this matters for three reasons:
It meaningfully increases the risk of intentional malpractice, as happened with FTX.
It meaningfully increases the risk of people acting in good faith but not making the best decisions, because they are conflicted.
It reinforces negative impressions of EA, e.g. that it is an ‘immature’ movement, that it is prone to self-dealing etc. (Notably, conflicts of interest policies always talk about both actual andperceived conflicts, and there are numerous examples of the perception of a conflict causing huge reputational harm in the public eye.)
So that means that there is risk of actual material harm, and a risk of reputational harm.
To go back to my original comment, I am still genuinely amazed that there either wasn’t a perceived conflict, or that the conflict was ignored, in this particular case, because it seems like a textbook example of something where your conflict of interest policy would kick in and where it would be worth taking extra steps to manage both the conflict and the perception of a conflict. That is, it’s a materially large transaction (>£10m), with a person in a potentially conflicted position, on a potentially controversial grant.
I notice that most of my comments here are getting pretty bad karma and agreement, so it may be that the community isn’t with me on this—but, honestly, I think this might be an example of EA thinking the normal rules don’t apply to it because [insert reason here].
My view is that there are reasons that governance norms and procedures for managing conflicts of interest exist, and I think EA orgs/leaders will learn those reasons the hard way if they don’t take them seriously now. And this seems particularly pertinent as we literally just saw the consequences of bad governance/controls in the most devastating, harmful way possible with FTX (who are now on the record as thinking that they were too smart for things like basic accounting practices).
Just finally, this has rather migrated from a discussion about the Wytham Abbey grant into ‘Jack’s concerns about EA governance’, which is pretty unfair to people involved in the original issue. So I just want to emphasise that I’m absolutely not accusing Claire of any of the ‘theoretical ’issues here, like malpractice or acting in bad faith or getting the grant decision obviously wrong. I’m just explaining why I find this transaction and process concerning.
It sounds like you’re advocating for the position of always following “good practices heuristics” and you’re saying “grantmakers who are on the board of another org should recuse themselves from grantmaking decisions about this other org” is one such heuristic. The first point seems uncontroversial; the second point is, in my view, open to debate.
It’s open to debate because “board membership” at most correlates with having specific conflicts of interest. What we should really be concerned about are the potentially-biasing influences themselves, like:
Does the grantmaker person have a strong financial motive to make a particular decision?
Does the grantmaker have a strong reputational motive to make a particular decision?
Does the grantmaker have a strong social motive (friendship, romance, peer pressure, etc.) to make a particular decision?
Once we learn that Claire joined EVF’s board in her role as a grantmaker, all the other ways in which “being a board member” is usually correlated with the above three potentially-biasing influences no longer apply. Learning the context in which she joined screens off these other factors. By contrast, if we knew nothing about why Claire joined the EVF board, and especially if she had joined their board before starting to work at Open Phil, then it would become hard to rule out that her board membership comes with potentially-biasing influences.
Maybe another concern is “Is the grantmaker at risk of exerting undue influence over an org” – but that depends on what we mean by “undue.” It’s also somewhat common for funders to join boards, so it’s not like this clearly violates good practices.
Overall, I think it’s quite reasonable not to be concerned about this after thinking through the specifics. The position of “it’s hubris to think through the specifics when we must avoid anything that’s even just vaguely correlated with a conflict of interest” doesn’t seem appealing to me. It also seems like “process theater” where people signal how virtuously they adhere to “good processes” without seeming to even understand or care why these processes are there in the first place. If anything, I’d find it concerning if people reasoned about things in a rigidly-rule-driven way that’s disconnected from “why might this be bad?”
I think the information about Claire’s dual role (and rationale) should have been publicly disclosed up front (was it?) . That would have been very low cost, and would send a signal that the appropriate people were keeping an eye on COI issues. Not disclosing a conflict, the waiver, and the rationale on a big grant until a grant decision is challenged in the media and by numerous forum users would not send the right message about EA’s attitude toward managing COI.
As to the merits of this one, I just can’t find a huge difference between the ultimate donor (who I assume was Dustin Moskovitz / GV) serving dual roles of sitting on the EVF board and deciding whether to fund an EVF ask, and the donor authorizing Claire to perform both roles (with oversight on the OP end) more or less on his behalf. That’s why I come back to whether the donor was aware of and approved the conflict waiver. $15MM is enough that I think that some actual donor awareness of the dual role was necessary here.
It’s no concern of mine how OP spends its money, but since it’s come up here: I don’t think your cost estimate can be correct.
Firstly, OP doesn’t have the asset, so its resale value is irrelevant to you. It’s all very well to say that proceeds would be used for EVF’s general funding which would funge against OP’s future grants, but (a) there doesn’t seem to be anything stopping EVF from using the proceeds for some specific project which OP wouldn’t otherwise fund and (b) it’s possible to imagine a scenario in which OP ceases to fund EVF and there’s nothing to funge against. It seems to me that OP should just treat it as a grant of £15m (or whatever it was) to EVF. Presumably when you publish a grant report, that’s what it will say.
Secondly, this has been discussed elsewhere, but the cost can’t be a flat few million from EVF’s perspective. Consider for example the case where the project is huge success and the property is held in perpetuity. Ex hypothesi it was a sound grant, but the whole £15m (or whatever) has been expended, plus some further amount for ongoing maintenance.
One possible counterfactual is that EVF buys the property and lets it for income. Gross rental yields in Oxfordshire are 4-5%, so EVF would receive a counterfactual income of at least £600k. In fact a property like that would be difficult to let as is: there are various ways one might generate income from it in practice, including running it as a conference centre for profit, but £600k pa should be an approximate floor on a reasonable commercial income (assuming the sale price to have been fair). By using the property for its own purposes EVF foregoes that income, so the cost to it is at least that much per year, and the total cost will depend on how long it’s held. By definition, the income considered in perpetuity will capitalise at the fair purchase price.
But in fact EVF would never have bought the property for that purpose, for at least two reasons. Firstly, EVF doesn’t endorse investing to give. Secondly, if EVF did want to invest £15m for income, buying a single property in Oxfordshire would not represente a prudent investment strategy. It’s a very niche property and the resale value is going to depend on what purchasers happen to be in the market in the material time. Of course that might work out very favourably, but the opposite possibility is approximately equally likely.
Since in general EVF considers it can do better things with £15m than invest it for 4% yield, the opportunity cost must be higher than £600k pa. In fact EVF should probably know what it’s discount rate is, which would make the calculation straightforward.
It seems to me that OP should just treat it as a grant of £15m (or whatever it was) to EVF. Presumably when you publish a grant report, that’s what it will say.
I think you make reasonable points that OP should consider it to be worth more than the resale difference, but there’s a big range between that and £15m. If there’s, eg, a 10% chance of this significant a break happening in the next 4 years, that would put the costs at 0.9 * resale difference + 0.1 * £15m. Do you think it’s reasonable to put a much higher probability on this?
Plus, EVF provides services to a lot of charities, so the main way I expect OpenPhil would decide they do not want money to remain with EVF would be if they decide that EVF itself is doing a bad job, or EVF otherwise significantly deviates from their values. Which is totally possible! But it seems reasonable to bet against.
I’m afraid I think this is fundamentally the wrong way to look at it. If you make a grant £X to allow another organisation to buy an asset, the fact that the donee ends up with a valuable asset is obviously an argument in favour of the grant, but you’ve still made a grant for £X. You can’t offset the value of the asset, because it isn’t your asset.
It may be that in making the grant for £X, you’re saving yourself making a series of future grants (in the case the cost of hiring venues for the conferences/retreats), and in that sense it may be financially advantageous, but you still have made a grant of £X, which needs to justified on its merits, just as you would have had to justify the counterfactual series of future grants. Fundamentally what seems to have happened here is that value of the events themselves has been taken for granted, even though they were being very significantly prefunded.
How do you put a meaningful probability on this? That 10% number is totally arbitrary.
I could equally say that the growing number of governance problems in EVF discussed in this forum make it 80% likely that it would be disavowed in the coming years. (This number is still meaningless)
This is a pretty uncertain question, and I’m not arguing that there’s a precise or rigorous way to answer it! But you can’t not put a probability on it—ultimately, everything we do is making a decision under uncertainty, and implicitly putting a probability on things. Eg, OpenPhil is implicitly putting a, say, less than 10% probability of EVF taking the money and running.
I’m making 10% explicit for illustrative purposes, and if I were making a grant here I’d be trying to think through the clearest evidence for or against (notably, I think that EVF has a decent track record, even if CEA as a whole doesn’t, has had so for a while, and provides a significant amount of infrastructure to a range of orgs doing good work, so I’d put the probability of such a large break that the money is basically burned as fairly low). And I think it’s generally unwise to make decisions that strongly rest on some specific and brittle assumptions re the right numbers. But if plausible feeling numbers don’t greatly shift the decision, this feels like useful data.
Given the massive decline in expected EA liquidity since the purchase and the fact that the purchase was largely justified on the grounds that as a durable asset it could be converted back into liquid funds with minimal loss, why not sell it now?.
Seems worth it to check whether it breaks even given a lot of the fixed costs (like transaction costs) have been paid. If it breaks even, we can keep it. If it doesn’t, we can sell it, but committing to selling it right now seems like it would waste a bunch of valuable information that can be (relatively) cheaply obtained right now.
If it’s the right decision to sell and use the money a better way, that still applies, whether or not there is a small loss. To have a loss might be somewhat embarrassing, but truth is truth.
Anyway, in the UK you can put a property up for sale at an ideal price, and see what offers come in. It’s hard to know for sure what price you will get without doing that.
Nit: I was very explicitly asking why not sell, not suggesting a commitment to sell; I don’t appreciate the rhetorical pivot to argue against a point I was not making.
Yes, they should check that it makes financial sense. Though break-even shouldn’t be an anchor or decision point—what matters is whether the money from a sale could be better spent elsewhere, which doesn’t really have anything to do with money already spent.
If it doesn’t make sense to sell, then they shouldn’t sell—but they should also be ready to admit that they made an error in their initial analysis, because it would mean that the bulk of the cost is effectively gone and the true price in opportunity cost was significantly higher than the marginal costs implied.
To a first approximation, it’s either a mostly-recoverable expense that didn’t really cost that much when you consider it maintains its value as a durable good, or it’s not financially feasible to sell and all of those funds are sunk. It can’t be both.
Nit: I was very explicitly asking why not sell, not suggesting a commitment to sell; I don’t appreciate the rhetorical pivot to argue against a point I was not making.
I don’t get this nit. Wasn’t Oliver’s comment straightforwardly answering your question, “Why not sell it now?” by giving an argument against selling it now?
How is that a pivot? He added the word “commiting”, but I don’t see how that changes the substance. I think he was just emphasizing what would be lost if we sold now without waiting for more info. Which seems like a perfectly valid answer to the question you asked!
tldr: this is way more ink than should be spilt over a minor rhetorical point, but I believe it’s a real and meaningful (though minor) strawmanning that selects a weaker opponent for the “keep” position to face.
I don’t understand this response? You asked “why not sell it now?”, and I answered that exact question. I also covered a slightly broader case of “committing to sell”, but that just totally covers the “sell now” case.
I labeled this a nit in the hopes of avoiding this kind of deep spiral, but—“commit” is a significant intensifier that specifically implies overriding or ignoring opposing reasons beyond what would normally be expected.
“Why not sell the abbey?” is seeking countervailing reasons while implicitly framing “sell” as the default option to overcome.
”Should they commit to selling the abbey?” is seeking to ignore all possible countervailing reasons and implicitly frames “keep” as the default option which can only be overcome with an overwhelmingly strong argument.
Replacing the former with the latter is choosing a weaker opponent for the “keep” position to overcome.
This is a minor rhetorical thing that does not warrant as many words as this, but it is a real and meaningful thing.
Yes, they should check that it makes financial sense. Though break-even shouldn’t be an anchor or decision point—what matters is whether the money from a sale could be better spent elsewhere, which doesn’t really have anything to do with money already spent.
Sorry, yes, by break-even I meant “a better use than the last dollar that Open Phil expects to spend”.
But that’s not a function of whether “a lot of the fixed costs (like transaction costs) have been paid”. That is very specifically referring to break-even relative to costs already expended, not to counterfactual spending. It’s okay if you’ve changed your mind, but I don’t think that what you said originally is consistent with this comment.
Agree with your soft max idea but “net positive EV” is too soft—as I’ve said elsewhere donating to the university you went to or your local animal shelter is still net positive EV.
I do agree net positive is too soft, but I don’t think this is what anyone is seriously advocating for here.
The main implicit theory of impact for event venues is venues → events → {ideas / intellectual progress / new people engaging with the ideas / sharing of ideas}
I think in domains like “thinking about future with powerful AI” or “how to improve humanity’s epistemics” or “what are some implications of digital minds existing” it seems the case that noticeable amount of thinking and discussion is happening at various in-person gatherings.
If you overall make the bet these domains are important (which seems softmax-reasonable), you are faced with a range of bets which differ on criteria such as how good the bet is, what’s the variance, and how scalable it is. To showcase some extremes - e.g., I think it’s an obviously great idea to pay Paul Christiano, allowing him to work on alignment. while this is way more effective than buying events venue, it’s not really scalable—if you send twice as much money to Paul, you won’t get twice the output. - it’s less clear what’s the sign and impact of ‘pay a lot of AI safety community builders’ : plausibly good, but high variance - I think venues are plausibly good softmax type of bet, with a lot of positive uncertainty, and not that much direct downside
Just to understand fully: in your role in OpenPhil in November 2021, you acted as the key decision-maker to award a grant of ~£15m to the Effective Values Foundation while simultaneously acting as a Director of the Effective Values Foundation (appointment confirmed on 18 July 2019.)
Or have I misunderstood the role of “grant investigator” or some aspect of the timing?
That’s correct. It’s common for large funders of organizations to serve on the boards of organizations they support, and I joined the EVF board partly because we foresaw synergies between the roles (including for me acting as grant investigator on EVF grants). Leadership at both organizations are aware I am in both roles.
Also, though you didn’t ask: I don’t receive any compensation for my work as an EVF board member.
I appreciate it may be worthwhile for OP to fund the acquisition of a dedicated EA events space, but the shift from:
“we should fund a dedicated EA events space”
to
“we should specifically fund the purchase of Wytham Abbey”
is alarming given the obvious challenges with Wytham Abbey (both with the property and the COI issues).
If EVF or OP wanted to purchase a dedicated event space and solicited applications/proposals for it, given all of the stated concerns, I am confident Wytham Abbey would not have won. I think it is worthwhile for OP to reflect on what went wrong here.
How much professional advice on the cost and resource requirements on refurbishing and maintaining the property did Owen obtain? I note this is a Grade 1 listed building.
Thanks for the explaining the reasoning, it reads very reasonable to me and I appreciate you taking the time!
I wonder if you changed your mind on communicating Open Phil’s funding decisions going forward. Random thoughts from me:
IIRC the info on your grant pages is usually very sparse.
If you focus on communicating funding decisions that seem somewhat novel and large, it might not require so much extra time.
Better understanding your reasoning would increase the level of trust that interested and well-meaning outsiders have towards you and the EA community more broadly.
Understanding your thinking better might help potential grantees to know what type of projects seem worth pitching to you.
And just a minor curiosity, would be really interested in hearing more about what kind of issues to look out for when renting venues:
Rented venues sometimes have issues that aren’t discovered until an event has begun (and we’ve seen events go substantially worse, or have to execute difficult mid-event moves, because of issues arising with the venues after the event was already underway).
Thanks for finally providing an answer for this, but it’s still unclear why Owen Cotton Barrat [see the edit] said the donor wanted to remain anonymous.
[EDIT: OCB didn’t say sich a thing. But it’s still unclear why (a) he couldn’t disclose the donors’ identities, nor (b) why he claimed that the funds were specifically for this purchase, so implying that effective altruists couldn’t spend the 15mi any other way]
you’re right. OCB didn’t say sich a thing. I included a disclaimer above, instead of erasing the comment. But it’s still unclear, at least for me, why (a) OCB couldn’t disclose the donors’ identities, nor (b) why he claimed that the funds were specifically for this purchase, so implying that effective altruists couldn’t spend the 15mi any other way.
Isn’t it a conflict of interest and self-dealing when two of EVF’s board members (Will MacAskill and Nick Beckstead) were also on the FTX Future Fund team? The fact that the purchase of Wytham Abbey wasn’t finalized until after the FTX Future Fund gave $14million to CEA (and millions more to other EVF-affiliated organizations) looks pretty suspicious.
If the money didn’t come from FTX, then where did it come from? More to the point, would the purchase have been finalized if CEA/EVF hadn’t received the money from the FTX Future Fund?
You say that you try to publish grants within 3 months, but it’s been over 7 months since the purchase went through and over a month since FTX itself collapsed. Why isn’t transparency about this particular grant a bigger priority, especially considering it’s become such a divisive issue?
I’m a bit confused about this comment. I’m sorry it was downvoted so much however and I’ll try to be helpful. Note that I don’t have any access to private information.
If the money didn’t come from FTX, then where did it come from?
As mentioned in the first line of the comment you replied to, the money presumably came from an Open Phil recommendation. Most of Open Phil money comes from Good Ventures, which is set up by Dustin Moskovitz (Facebook cofounder and Asana CEO) and Cari Tuna. Dustin’s money comes from Facebook, Asana, and other investments. This has been discussed in the past on this forum.
You say that you try to publish grants within 3 months, but it’s been over 7 months since the purchase went through and over a month since FTX itself collapsed. Why isn’t transparency about this particular grant a bigger priority, especially considering it’s become such a divisive issue?
Presumably FTX’s collapse has caused Open Phil’s communications people to be more busy, not less.
This feels like a non sequitur to me. What in Linch’s comment suggests that EVF should give the money back to OpenPhil? (By which I assume you mean, sell the house?)
It’s much more plausible that they should give back the FTX money, once it finally becomes clear how one can even do that (lots of discussion of this on the Forum already). I expect that EVF has been going through a lot of internal agonising about how to handle their FTX-related liabilities.
This doesn’t have much direct bearing on the Abbey purchase, though.
Hey, I wanted to clarify that Open Phil gave most of the funding for the purchase of Wytham Abbey (a small part of the costs were also committed by Owen and his wife, as a signal of “skin in the game”). I run the Longtermist EA Community Growth program at Open Phil (we recently launched a parallel program for EA community growth for global health and wellbeing, which I don’t run) and I was the grant investigator for this grant, so I probably have the most context on it from the side of the donor. I’m also on the board of the Effective Ventures Foundation (EVF).
Why did we make the grant? There are two things I’d like to discuss about this, the process we used/context we were in, and our take on the case for the grant. I’ll start with the former.
Process and context: At the time we committed the funding (November 2021, though the purchase wasn’t completed until April 2022), there was a lot more apparent funding available than there is today, both from Open Phil and from the Future Fund. Existential risk reduction and related efforts seemed to us to have a funding overhang, and we were actively looking for more ways to spend money to support more good work, especially by encouraging more people to dedicate their careers to addressing the associated risks. Also, given the large amounts of funding available at the time, and relatively lower number of grantmakers, we wanted to experiment with decentralizing some influence over funding to other people with experience in the space who understood our long-run priorities but had visions for how to use the funding that were somewhat different from our grantmakers’.
So, we were experimenting with more defaulting to saying “yes” to shovel-ready grant requests that seemed aimed at our core priorities, especially when they didn’t require enormous amounts of funding. (As others have noted and as I’ll explain below, we modeled the amount of funding at stake here as being in the low millions of dollars, rather than the higher sticker price, since it was to purchase a durable asset that can be resold.)
What did we think about this grant? In the abstract, we thought the idea of buying real estate to use for events was a reasonable one.
When evaluating a grant, my team tends to focus on the question “to what extent (per dollar) will this grant result in more promising people focusing their careers on doing as much good as possible in our longtermist focus areas?” (Other Open Philanthropy programs use different criteria.) I and other people on my team have invested a fair amount in collecting data and developing metrics for evaluating the value-for-money of grants aimed at this goal, though also it’s still a work in progress in many ways.
When we surveyed ~200 people involved or interested in longtermist work, we found that many had been strongly influenced by in-person events they’d attended, particularly ones where people relatively new to a topic came into contact with relatively experienced people working full-time in that area. (Some other data and our general experiences in the space are largely supportive of this too). Overall, we feel fairly confident in-person events like workshops, learning retreats, and conferences can be very impactful for people considering big career changes, and have historically often been good value-for-money via helping people interested in our longtermist focus areas make professional connections and deepen their understanding about these topics.
We support projects that cumulatively run dozens of events per year (disproportionately in the Bay Area and UK), and we saw several reasons a venue purchase could be valuable for both increasing the number and quality of impactful events, and potentially saving some money:
The number of events was growing fast.
Suitable venues are often of limited availability and book up far in advance, making more spontaneous events challenging.
Rented venues sometimes have issues that aren’t discovered until an event has begun (and we’ve seen events go substantially worse, or have to execute difficult mid-event moves, because of issues arising with the venues after the event was already underway).
Ops capacity to organize before and after events is a resource we value highly. Organizing and preparing for events takes more time and may go worse on average when you need to orient to the layout of different venues, move in and out all the equipment, learn about new areas (and travel to/from them) and available vendors that the event allows, etc.
Renting venues varies a lot in price, but venues for events near top EA hubs can be very expensive. Often, the cost of the venues was in the $30-100k range (though there were also smaller, shorter events aimed at students with venue costs in the $10k-ish range, and large conferences can be much more expensive).
Other locations are often cheaper, but have a more difficult time attracting busy professionals, relative to ones that take place near where they live, and demand more time from ops staff, senior staff, and (sometimes) instructors helping with events (and, we generally highly value all those folks’ time, even if they are willing to travel).
The fact that the funding was going to be used to purchase a durable asset means that for the purposes of our cost-effectiveness analysis, we modeled the financial stakes as being somewhere in the low millions (rather than the meaningfully higher sticker price of the property). Our grantees also stood to potentially save money through the investment, since they wouldn’t end up paying rental costs to run their events. We still wouldn’t have been surprised if the investment turned out net negative from a financial perspective, but losing most of the investment seemed unlikely. Given this model of the costs, we thought it was consistent with our overall experiment in lowering barriers to longtermist funding to “default to yes” for a shovel-ready grant.
We discussed Owen’s reasoning behind selecting this kind of venue, and we thought it broadly made sense. The main goal was to have a venue relatively near Oxford with sufficient capacity for the types of events we thought could be highly impactful.
Despite the points above, we were relatively uncertain about this specific opportunity, and there was some internal debate over the amount and structure of our funding; we also expressed our uncertainty to Owen.
We were mainly uncertain about:
Owen being the person driving this forward, despite him not wanting to be the main point person actually helping oversee the property and run relevant events over the next few years
Whether refurbishing and maintaining the property would end up being much more time-consuming and expensive than Owen forecasted
Whether the process was moving too quickly and whether more should be done to investigate the state and expected value of the property, and whether a better opportunity might arise in the coming years
Whether the number and kinds of events (and the value of those events) had been sufficiently well-scoped, and whether this venue would prove a good fit for a sufficient fraction of them.
Internally at OP (including with our communications team), we discussed how this would reflect on us somewhat, but mostly from the perspective of us as a funder, rather than the wider ecosystem as a whole. I think that it was a mistake on my part that the funding conversations didn’t focus more on that broader question, and I regret it, though I think we should have a high bar to rejecting otherwise solid-seeming grants on optics grounds because that kind of approach can be hard to limit and then can end up being surprisingly costly to impact. (My recollection is that we thought of it mainly as a longtermist/existential risk reduction field resource and didn’t think enough about how what was then called CEA providing fiscal sponsorship might make it sound more like an EA project.)
We also told Owen that we would want to check in about venue usage and think about the value it was generating in terms of the community growth metrics we generally use, and discuss selling the property if it didn’t seem like things were going well. (Proceeds from a sale would be used as general funding within EVF, and that funding would replace some of our and other funders’ future grants to EVF.)
Where do I stand on this grant now? With the huge decline in available funds since November 2021, I don’t know whether we’d make this grant again today. I still think it could turn out to be importantly effort-saving and event-increasing-and-improving relative to regularly renting one-off event venues, and it could also lead to a higher number of impactful events being run. But it’s currently too soon to say whether the usage will justify the investment. If we were considering a similar grant now, we’d want to get more into the details of modeling the effective financial cost (incorporating the resale possibility), hammering out plans and predictions for future operations and usage, etc. but I think we might consider it to be good enough value-for-money that we’d want to go forward with some possible projects in this vein.
Why isn’t there a published grant page right now? (This isn’t my domain but) we typically aim to publish grants within three months of when we make our initial payment, but we’re currently working through a backlog of older grants. Wytham is one of many grants in that category.
Thanks for sharing this info, Claire!
I think your team correctly concluded that in-person events are enormously valuable for people making big career changes, but running in-person events are expensive and super logistically challenging. I think logistics are somewhat undervalued in the EA community, e.g. I read a lot of criticism along the lines of, “Why don’t community organizers or EAGs just do some extremely time costly thing,” without much appreciation for how hard it is to get things to happen.
From this perspective, lowering the barrier for in-person events by buying a conference venue seems like a reasonable investment. It’s fine to scrutinize the details (were there better deals given location/size constraints?), but I would like more critics of this purchase to acknowledge how buying a conference center has a lot of benefits.
Hi Claire—thanks for the extra info here, which is very helpful.
Can you say whether you/Open Phil considered anything here to be a conflict of interest and if so how you managed that?
At a first glance, a trustee of EVF recommending a grant of £10m+ to EVF on behalf of their employer seems like a CoI.
Hey Jack, this comment might help answer your question.
Hi Claire,
Thanks for coming back to this comment.
I have heard it said that large funders often ask for a seat on the Board of charities they fund. I’ve never actually heard of a concrete example of this, but I’m happy to take it on faith.
What I’m more surprised about is that the funder would appoint someone to the Board who then assesses grant applications from that nonprofit. This is surely an unavoidable conflict of interest—the Board member has a direct interest in gaining the grant for the nonprofit, even if it’s not in the grantor’s best interests to award it. Is there any way this could not be considered a conflict of interest?
It also seems easy to defuse this conflict, by having other staff at the grantor assess the grant application. Surely someone else at Open Phil could have assessed this application?
Candidly, I’m astounded that someone can assess a £10m+ grant application on behalf of their employer, when they sit on the Board of the applicant.
It is definitely the case that large investors in startups often take board seats, to help oversee the company, make sure their investment is being spent wisely, and gather information to help decide on subsequent investments. Indeed, I would consider this to be a best practice, and if a >50% investor didn’t take a board seat it would be worth asking why not!
Similarly, rather than causing a problem for OpenPhil, I think of Claire’s joining the CEA board as being an action she took on behalf of OpenPhil.
Hi Larks,
Yes indeed—I do know of many examples of this. But I don’t know of any in the charitable sector. Do you? Every time I have asked people for an example of this, they have used the same example you have from the private sector.
I think this is worth investigating for two reasons. First, I think it may be one of those things that everybody knows is true, except it isn’t. I’ve worked in nonprofits for 12 years and have submitted at least 200 funding bids and won funding from at least 50 unique grantmakers and I have never come across this. (Btw, if it exists, I think it may be a US thing, where most of my experience with grantors has been in the UK.)
Second, I think it would be useful to see how the inherent conflict of interest is handled when this happens (if it does happen). Because, for example, it seems a very simple way to negate the conflict of interest would be for one person from the grantmaker to sit on the Board, and another to assess that charity’s future grant applications. I wonder if that is common, or if it more common to have someone sit on both sides of the transaction, because their extra understanding outweighs the CoI.
I’m afraid I’m much more familiar with how the private sector works than the non-EA charitable sector so can’t directly answer that question, sorry.
I think you’ve only asked the first of the three relevant questions—is there a conflict? is it waivable? has it been waived?
I think this one is waivable jointly by Open Phil and the ultimate donor. Open Phil, to whom the presumptive duty of conflict-free advice is owed, can determine that the benefits of having someone with inside knowledge evaluate the grant outweighs the concern about a dual role. And it is pretty clear that Open Phil has done so. If Open Phil is making a grant recommendation to a funder, the dual relationship should be—and hopefully was—known to that funder.
I see your point Jason, and don’t dispute that Open Phil has chosen to waive any CoI, or that they may have felt that the advantages outweighed the conflict.
But I’m not sure that is really the relevant question (or at least, not the only relevant question), because any org can choose to waive a CoI—it doesn’t necessarily mean it should have. Or, to put it another way, it’s possible for an organisation to overlook a CoI but for the CoI still to exist and to be material.
For example, a common CoI is that someone on the Board offers paid services to the charity (or a business or person connected to that Board member offers paid services).
There are then guidelines for how the Board should assess this against the market, and (which is relevant in this case) exclude the conflicted Board member from discussions. They can then accept the offer and pay for the services.
However, despite all this, imagine it came to light that my wife had offered services to One for the World, and had been accepted, and then had made, say, $300k doing this in the last 3 years. And imagine we followed the relevant procedure in her winning this business. I am still very sceptical that it would be sufficient to say “well OFTW waived the conflict of interest” and expect this to past muster. Certainly I doubt that would pass our audit.
For a relevant real life example, this actually happened recently with the NRA, who commissioned millions of dollars of services from Wayne LaPierre and his wife, and are now being sued for corruption and have their charitable registration under threat. Clearly it wasn’t considered sufficient for them to say ‘we waived the conflict of interest’ here.
To be clear, I’m obviously not suggesting at all that this Open Phil situation is analogous to the NRA—I’m just saying that ‘we looked at the conflict of interest and decided it was ok’ isn’t the end of the discussion (and isn’t a conclusive defence).
And, as I keep coming back to, I think there was a really simple way to negate this entire discussion and the appearance of a conflict, simply by having literally anyone else at Open Phil do the grant investigation (although I acknowledge that this grant will have gone through multiple levels of sign off and review).
Thanks for the insightful comment, Jack. I should have been clearer that “is it waivable” has both a procedural and a substantive component—a non-conflicted organizational authority needs to determine that waiver is in the best interests of the organization. And it’s certainly reasonable for people to think that it would have been preferable for OP to take a different approach.
But on the known facts, I conclude that a decision to waive would be reasonable on the best-interests standard: Claire had no personal interest in the grant outcome, and is basically on EVF’s board at OP’s request as its representative-of-sorts (rather than her happening to be on the board of a grant-seeking organization for her personal reasons). I still think there is a COI there, but I would rate it as fairly mild when viewed through the eyes of an observer with knowledge of all relevant facts.
I don’t think the alternative of having someone else do the grant investigation actually achieves the same benefit to OP. If you think Claire has a COI and needs to recuse, then she needs to be walled off from OP’s evaluation of this grant altogether. But that defeats OP’s presumed purpose of having Claire on EVF’s board in the first place—to be able to use the information and experience she obtained in evaluating grant proposals instead of relying more heavily on EVF’s submissions. If OP thinks that is an important advantage, having the grant investigator on EVF’s board seems to be the only way to get it. I guess you could have a different grant investigator with Claire merely providing input in some fashion . . . but in my book, that’s just getting some of the potential benefit while accepting some of the COI. I think that’s an important distinction from your OFTW hypothetical—in that hypothetical, there were likely other vendors from whom the organization could have purchased the same services from.
Finally, there are some other background facts that make me apply a more deferential standard of review to OP’s waiver decision here:
I don’t think either OP or the ultimate donor are publicly-supported charities in any meaningful sense of that characterization. I am less flexible with COI waivers for publicly-supported charities, because the waiving authority is serving as a psuedo-proxy/trustee for the relevant stakeholders (donors, in the case of a grant) whose individual consent is not practical to obtain.
As you mentioned, presumably the grant would have gone through multiple levels of sign off and review.
If the person with a conflict has too much sway in the organization, a reasonable observer could question whether the waiver decisionmaker can actually decide whether to waive in an impartial manner. I don’t have any reason to believe Claire has anywhere near the kind of influence at OP that, say, LaPierre did at NRA.
I think you are absolutely right to be vigilant about COI issues, and I would probably agree with your position if some of these facts were different. I’m just not concerned by this one on these facts.
Thanks for this Jason—very helpful and illuminating.
I wasn’t aware that Claire specifically joined CEA’s Board at OP’s request. Where did you find this?
I also agree with your point 3 that LaPierre clearly had the opportunity to influence the decision not to consider the CoI material in a corrupt way, which Claire didn’t; and that Claire didn’t gain personally from this grant.
To be clear, my assumption is that no one acted in bad faith. However, I’m still very uncomfortable with someone sitting on both sides of a £10m transaction. This meets my materiality threshold for taking significant extra steps to avoid even the appearance of a CoI. I guess this whole OP and thread demonstrates why this might be worth doing, as the grant itself is contentious.
What, specifically, are you worried about?
One possible concern here is that Claire would use her position at OPP to direct extra resources to EV. I don’t see how her being on the board increases that risk, relative to merely being a heavily involved investigator.
Another possible concern is that she will use OPP’s power to manipulate EV, to the detriment of it/its donors. That’s definitely possible, but it was always possible because OPP is such a large donor. Being on the board increases legibility much more than power, which is broadly good.
I think the actual concern might be something like “OPP and CEA feel like they’re coordinating more than they should.” They definitely are coordinating in ways Safeway and GE do not, or even GiveWell and AMF (I think but have not verified). I think you’re right to think of them as less than totally independent, due to this connection and others. I don’t think that’s inherently a problem. I think there’s some obligation on both their part to make this obvious to donors, and the number of surprised and angry people suggests they failed at that. But I don’t see anything inherently wrong with organizations coordinating to fulfill mutual goals
Hi Elizabeth,
Thanks for this. Interestingly, I wasn’t especially concerned about the things you list, although I do think they are all risks. I agree that they are possible, but also agree that they are unlikely to be material. Indeed, I feel bad for focusing mainly on Claire and this transaction, because I have no reason to think they are anything but a great trustee and great program officer.
My concern is broader than this—unfortunately, I see this transaction as one fairly prominent example of a pattern.
EA orgs tolerate an unusually large number of conflicts of interest. A relatively small group of people sit on multiple Boards and orgs; it is not unusual for people to sit on both sides of very large transactions; sometimes the biggest recipients of funding are organizations where the grantor’s trustees work, or where they are trustees, or similar; etc. We saw this in particular with FTX but it is true across the EA ecosystem.
This is contrary to just about any accepted governance norms. Many of these conflicts could be managed fairly easily, for example by using conflicted people as advisors rather than trustees; by asking disinterested people to assess grant bids and interested people to recuse themselves; etc. However, this rarely seems to happen, even in cases where there is an incredibly strong prima facie case for doing so, like this one. So I think the pattern is that EA orgs/leaders are less bothered by conflicts than I/people familiar with governance would expect; and that they tend to just acknowledge the conflict and then assume everyone will both a) act in good faith (largely true, I expect) and b) make the best decisions possible (trickier).
I think this matters for three reasons:
It meaningfully increases the risk of intentional malpractice, as happened with FTX.
It meaningfully increases the risk of people acting in good faith but not making the best decisions, because they are conflicted.
It reinforces negative impressions of EA, e.g. that it is an ‘immature’ movement, that it is prone to self-dealing etc. (Notably, conflicts of interest policies always talk about both actual and perceived conflicts, and there are numerous examples of the perception of a conflict causing huge reputational harm in the public eye.)
So that means that there is risk of actual material harm, and a risk of reputational harm.
To go back to my original comment, I am still genuinely amazed that there either wasn’t a perceived conflict, or that the conflict was ignored, in this particular case, because it seems like a textbook example of something where your conflict of interest policy would kick in and where it would be worth taking extra steps to manage both the conflict and the perception of a conflict. That is, it’s a materially large transaction (>£10m), with a person in a potentially conflicted position, on a potentially controversial grant.
I notice that most of my comments here are getting pretty bad karma and agreement, so it may be that the community isn’t with me on this—but, honestly, I think this might be an example of EA thinking the normal rules don’t apply to it because [insert reason here].
My view is that there are reasons that governance norms and procedures for managing conflicts of interest exist, and I think EA orgs/leaders will learn those reasons the hard way if they don’t take them seriously now. And this seems particularly pertinent as we literally just saw the consequences of bad governance/controls in the most devastating, harmful way possible with FTX (who are now on the record as thinking that they were too smart for things like basic accounting practices).
Just finally, this has rather migrated from a discussion about the Wytham Abbey grant into ‘Jack’s concerns about EA governance’, which is pretty unfair to people involved in the original issue. So I just want to emphasise that I’m absolutely not accusing Claire of any of the ‘theoretical ’issues here, like malpractice or acting in bad faith or getting the grant decision obviously wrong. I’m just explaining why I find this transaction and process concerning.
It sounds like you’re advocating for the position of always following “good practices heuristics” and you’re saying “grantmakers who are on the board of another org should recuse themselves from grantmaking decisions about this other org” is one such heuristic. The first point seems uncontroversial; the second point is, in my view, open to debate.
It’s open to debate because “board membership” at most correlates with having specific conflicts of interest. What we should really be concerned about are the potentially-biasing influences themselves, like:
Does the grantmaker person have a strong financial motive to make a particular decision?
Does the grantmaker have a strong reputational motive to make a particular decision?
Does the grantmaker have a strong social motive (friendship, romance, peer pressure, etc.) to make a particular decision?
Once we learn that Claire joined EVF’s board in her role as a grantmaker, all the other ways in which “being a board member” is usually correlated with the above three potentially-biasing influences no longer apply. Learning the context in which she joined screens off these other factors. By contrast, if we knew nothing about why Claire joined the EVF board, and especially if she had joined their board before starting to work at Open Phil, then it would become hard to rule out that her board membership comes with potentially-biasing influences.
Maybe another concern is “Is the grantmaker at risk of exerting undue influence over an org” – but that depends on what we mean by “undue.” It’s also somewhat common for funders to join boards, so it’s not like this clearly violates good practices.
Overall, I think it’s quite reasonable not to be concerned about this after thinking through the specifics. The position of “it’s hubris to think through the specifics when we must avoid anything that’s even just vaguely correlated with a conflict of interest” doesn’t seem appealing to me. It also seems like “process theater” where people signal how virtuously they adhere to “good processes” without seeming to even understand or care why these processes are there in the first place. If anything, I’d find it concerning if people reasoned about things in a rigidly-rule-driven way that’s disconnected from “why might this be bad?”
I think the information about Claire’s dual role (and rationale) should have been publicly disclosed up front (was it?) . That would have been very low cost, and would send a signal that the appropriate people were keeping an eye on COI issues. Not disclosing a conflict, the waiver, and the rationale on a big grant until a grant decision is challenged in the media and by numerous forum users would not send the right message about EA’s attitude toward managing COI.
As to the merits of this one, I just can’t find a huge difference between the ultimate donor (who I assume was Dustin Moskovitz / GV) serving dual roles of sitting on the EVF board and deciding whether to fund an EVF ask, and the donor authorizing Claire to perform both roles (with oversight on the OP end) more or less on his behalf. That’s why I come back to whether the donor was aware of and approved the conflict waiver. $15MM is enough that I think that some actual donor awareness of the dual role was necessary here.
It’s no concern of mine how OP spends its money, but since it’s come up here: I don’t think your cost estimate can be correct.
Firstly, OP doesn’t have the asset, so its resale value is irrelevant to you. It’s all very well to say that proceeds would be used for EVF’s general funding which would funge against OP’s future grants, but (a) there doesn’t seem to be anything stopping EVF from using the proceeds for some specific project which OP wouldn’t otherwise fund and (b) it’s possible to imagine a scenario in which OP ceases to fund EVF and there’s nothing to funge against. It seems to me that OP should just treat it as a grant of £15m (or whatever it was) to EVF. Presumably when you publish a grant report, that’s what it will say.
Secondly, this has been discussed elsewhere, but the cost can’t be a flat few million from EVF’s perspective. Consider for example the case where the project is huge success and the property is held in perpetuity. Ex hypothesi it was a sound grant, but the whole £15m (or whatever) has been expended, plus some further amount for ongoing maintenance.
One possible counterfactual is that EVF buys the property and lets it for income. Gross rental yields in Oxfordshire are 4-5%, so EVF would receive a counterfactual income of at least £600k. In fact a property like that would be difficult to let as is: there are various ways one might generate income from it in practice, including running it as a conference centre for profit, but £600k pa should be an approximate floor on a reasonable commercial income (assuming the sale price to have been fair). By using the property for its own purposes EVF foregoes that income, so the cost to it is at least that much per year, and the total cost will depend on how long it’s held. By definition, the income considered in perpetuity will capitalise at the fair purchase price.
But in fact EVF would never have bought the property for that purpose, for at least two reasons. Firstly, EVF doesn’t endorse investing to give. Secondly, if EVF did want to invest £15m for income, buying a single property in Oxfordshire would not represente a prudent investment strategy. It’s a very niche property and the resale value is going to depend on what purchasers happen to be in the market in the material time. Of course that might work out very favourably, but the opposite possibility is approximately equally likely.
Since in general EVF considers it can do better things with £15m than invest it for 4% yield, the opportunity cost must be higher than £600k pa. In fact EVF should probably know what it’s discount rate is, which would make the calculation straightforward.
I think you make reasonable points that OP should consider it to be worth more than the resale difference, but there’s a big range between that and £15m. If there’s, eg, a 10% chance of this significant a break happening in the next 4 years, that would put the costs at 0.9 * resale difference + 0.1 * £15m. Do you think it’s reasonable to put a much higher probability on this?
Plus, EVF provides services to a lot of charities, so the main way I expect OpenPhil would decide they do not want money to remain with EVF would be if they decide that EVF itself is doing a bad job, or EVF otherwise significantly deviates from their values. Which is totally possible! But it seems reasonable to bet against.
I’m afraid I think this is fundamentally the wrong way to look at it. If you make a grant £X to allow another organisation to buy an asset, the fact that the donee ends up with a valuable asset is obviously an argument in favour of the grant, but you’ve still made a grant for £X. You can’t offset the value of the asset, because it isn’t your asset.
It may be that in making the grant for £X, you’re saving yourself making a series of future grants (in the case the cost of hiring venues for the conferences/retreats), and in that sense it may be financially advantageous, but you still have made a grant of £X, which needs to justified on its merits, just as you would have had to justify the counterfactual series of future grants. Fundamentally what seems to have happened here is that value of the events themselves has been taken for granted, even though they were being very significantly prefunded.
How do you put a meaningful probability on this? That 10% number is totally arbitrary.
I could equally say that the growing number of governance problems in EVF discussed in this forum make it 80% likely that it would be disavowed in the coming years. (This number is still meaningless)
This is a pretty uncertain question, and I’m not arguing that there’s a precise or rigorous way to answer it! But you can’t not put a probability on it—ultimately, everything we do is making a decision under uncertainty, and implicitly putting a probability on things. Eg, OpenPhil is implicitly putting a, say, less than 10% probability of EVF taking the money and running.
I’m making 10% explicit for illustrative purposes, and if I were making a grant here I’d be trying to think through the clearest evidence for or against (notably, I think that EVF has a decent track record, even if CEA as a whole doesn’t, has had so for a while, and provides a significant amount of infrastructure to a range of orgs doing good work, so I’d put the probability of such a large break that the money is basically burned as fairly low). And I think it’s generally unwise to make decisions that strongly rest on some specific and brittle assumptions re the right numbers. But if plausible feeling numbers don’t greatly shift the decision, this feels like useful data.
Given the massive decline in expected EA liquidity since the purchase and the fact that the purchase was largely justified on the grounds that as a durable asset it could be converted back into liquid funds with minimal loss, why not sell it now?.
Seems worth it to check whether it breaks even given a lot of the fixed costs (like transaction costs) have been paid. If it breaks even, we can keep it. If it doesn’t, we can sell it, but committing to selling it right now seems like it would waste a bunch of valuable information that can be (relatively) cheaply obtained right now.
Isn’t that “sunk cost fallacy” ?
If it’s the right decision to sell and use the money a better way, that still applies, whether or not there is a small loss. To have a loss might be somewhat embarrassing, but truth is truth.
Anyway, in the UK you can put a property up for sale at an ideal price, and see what offers come in. It’s hard to know for sure what price you will get without doing that.
Nit: I was very explicitly asking why not sell, not suggesting a commitment to sell; I don’t appreciate the rhetorical pivot to argue against a point I was not making.
Yes, they should check that it makes financial sense. Though break-even shouldn’t be an anchor or decision point—what matters is whether the money from a sale could be better spent elsewhere, which doesn’t really have anything to do with money already spent.
If it doesn’t make sense to sell, then they shouldn’t sell—but they should also be ready to admit that they made an error in their initial analysis, because it would mean that the bulk of the cost is effectively gone and the true price in opportunity cost was significantly higher than the marginal costs implied.
To a first approximation, it’s either a mostly-recoverable expense that didn’t really cost that much when you consider it maintains its value as a durable good, or it’s not financially feasible to sell and all of those funds are sunk. It can’t be both.
I don’t get this nit. Wasn’t Oliver’s comment straightforwardly answering your question, “Why not sell it now?” by giving an argument against selling it now?
How is that a pivot? He added the word “commiting”, but I don’t see how that changes the substance. I think he was just emphasizing what would be lost if we sold now without waiting for more info. Which seems like a perfectly valid answer to the question you asked!
Reply here—https://forum.effectivealtruism.org/posts/xof7iFB3uh8Kc53bG/why-did-cea-buy-wytham-abbey?commentId=tZP9seDyxvS7ot4t7
tldr: this is way more ink than should be spilt over a minor rhetorical point, but I believe it’s a real and meaningful (though minor) strawmanning that selects a weaker opponent for the “keep” position to face.
I don’t understand this response? You asked “why not sell it now?”, and I answered that exact question. I also covered a slightly broader case of “committing to sell”, but that just totally covers the “sell now” case.
I labeled this a nit in the hopes of avoiding this kind of deep spiral, but—“commit” is a significant intensifier that specifically implies overriding or ignoring opposing reasons beyond what would normally be expected.
“Why not sell the abbey?” is seeking countervailing reasons while implicitly framing “sell” as the default option to overcome.
”Should they commit to selling the abbey?” is seeking to ignore all possible countervailing reasons and implicitly frames “keep” as the default option which can only be overcome with an overwhelmingly strong argument.
Replacing the former with the latter is choosing a weaker opponent for the “keep” position to overcome.
This is a minor rhetorical thing that does not warrant as many words as this, but it is a real and meaningful thing.
Sorry, yes, by break-even I meant “a better use than the last dollar that Open Phil expects to spend”.
But that’s not a function of whether “a lot of the fixed costs (like transaction costs) have been paid”. That is very specifically referring to break-even relative to costs already expended, not to counterfactual spending. It’s okay if you’ve changed your mind, but I don’t think that what you said originally is consistent with this comment.
This reads as though the approach to grant making was “is this positive EV” rather than “does this maximise EV”, which seems bad.
The idea that EAs should take only actions which maximize EV according to some sort of straightforward calculation is wrong.
The argmax(EV(action)) is a stupid decision strategy and people should not be criticized for not following it.
Agree with your soft max idea but “net positive EV” is too soft—as I’ve said elsewhere donating to the university you went to or your local animal shelter is still net positive EV.
I do agree net positive is too soft, but I don’t think this is what anyone is seriously advocating for here.
The main implicit theory of impact for event venues is
venues → events → {ideas / intellectual progress / new people engaging with the ideas / sharing of ideas}
I think in domains like “thinking about future with powerful AI” or “how to improve humanity’s epistemics” or “what are some implications of digital minds existing” it seems the case that noticeable amount of thinking and discussion is happening at various in-person gatherings.
If you overall make the bet these domains are important (which seems softmax-reasonable), you are faced with a range of bets which differ on criteria such as how good the bet is, what’s the variance, and how scalable it is. To showcase some extremes
- e.g., I think it’s an obviously great idea to pay Paul Christiano, allowing him to work on alignment. while this is way more effective than buying events venue, it’s not really scalable—if you send twice as much money to Paul, you won’t get twice the output.
- it’s less clear what’s the sign and impact of ‘pay a lot of AI safety community builders’ : plausibly good, but high variance
- I think venues are plausibly good softmax type of bet, with a lot of positive uncertainty, and not that much direct downside
It would be helpful to see your thoughts on community building fleshed out more in a post or longer comment.
Thank you Claire.
Just to understand fully: in your role in OpenPhil in November 2021, you acted as the key decision-maker to award a grant of ~£15m to the Effective Values Foundation while simultaneously acting as a Director of the Effective Values Foundation (appointment confirmed on 18 July 2019.)
Or have I misunderstood the role of “grant investigator” or some aspect of the timing?
That’s correct. It’s common for large funders of organizations to serve on the boards of organizations they support, and I joined the EVF board partly because we foresaw synergies between the roles (including for me acting as grant investigator on EVF grants). Leadership at both organizations are aware I am in both roles.
Also, though you didn’t ask: I don’t receive any compensation for my work as an EVF board member.
Relevant discussion on another post.
I appreciate it may be worthwhile for OP to fund the acquisition of a dedicated EA events space, but the shift from:
“we should fund a dedicated EA events space”
to
“we should specifically fund the purchase of Wytham Abbey”
is alarming given the obvious challenges with Wytham Abbey (both with the property and the COI issues).
If EVF or OP wanted to purchase a dedicated event space and solicited applications/proposals for it, given all of the stated concerns, I am confident Wytham Abbey would not have won. I think it is worthwhile for OP to reflect on what went wrong here.
How much professional advice on the cost and resource requirements on refurbishing and maintaining the property did Owen obtain? I note this is a Grade 1 listed building.
Thanks for the explaining the reasoning, it reads very reasonable to me and I appreciate you taking the time!
I wonder if you changed your mind on communicating Open Phil’s funding decisions going forward. Random thoughts from me:
IIRC the info on your grant pages is usually very sparse.
If you focus on communicating funding decisions that seem somewhat novel and large, it might not require so much extra time.
Better understanding your reasoning would increase the level of trust that interested and well-meaning outsiders have towards you and the EA community more broadly.
Understanding your thinking better might help potential grantees to know what type of projects seem worth pitching to you.
And just a minor curiosity, would be really interested in hearing more about what kind of issues to look out for when renting venues:
I really appreciate this response, thank you! I would like to hear more about the grant page publishing process.
Thanks for finally providing an answer for this, but it’s still unclear why Owen Cotton Barrat [see the edit] said the donor wanted to remain anonymous. [EDIT: OCB didn’t say sich a thing. But it’s still unclear why (a) he couldn’t disclose the donors’ identities, nor (b) why he claimed that the funds were specifically for this purchase, so implying that effective altruists couldn’t spend the 15mi any other way]
When did he say that? I just looked at his main comment and didn’t see anything like this, though I could be missing something obvious.
you’re right. OCB didn’t say sich a thing. I included a disclaimer above, instead of erasing the comment. But it’s still unclear, at least for me, why (a) OCB couldn’t disclose the donors’ identities, nor (b) why he claimed that the funds were specifically for this purchase, so implying that effective altruists couldn’t spend the 15mi any other way.
Isn’t it a conflict of interest and self-dealing when two of EVF’s board members (Will MacAskill and Nick Beckstead) were also on the FTX Future Fund team? The fact that the purchase of Wytham Abbey wasn’t finalized until after the FTX Future Fund gave $14million to CEA (and millions more to other EVF-affiliated organizations) looks pretty suspicious.
If the money didn’t come from FTX, then where did it come from? More to the point, would the purchase have been finalized if CEA/EVF hadn’t received the money from the FTX Future Fund?
You say that you try to publish grants within 3 months, but it’s been over 7 months since the purchase went through and over a month since FTX itself collapsed. Why isn’t transparency about this particular grant a bigger priority, especially considering it’s become such a divisive issue?
I’m a bit confused about this comment. I’m sorry it was downvoted so much however and I’ll try to be helpful. Note that I don’t have any access to private information.
As mentioned in the first line of the comment you replied to, the money presumably came from an Open Phil recommendation. Most of Open Phil money comes from Good Ventures, which is set up by Dustin Moskovitz (Facebook cofounder and Asana CEO) and Cari Tuna. Dustin’s money comes from Facebook, Asana, and other investments. This has been discussed in the past on this forum.
Presumably FTX’s collapse has caused Open Phil’s communications people to be more busy, not less.
Also, it’s been like a week since this grant has become a divisive issue. I don’t think anyone was really talking about it 3 weeks ago.
Ok. So is EVF/CEA going to give the money back?
P.S. Is this you? Nice meme: https://web.archive.org/web/20211114183540/https://twitter.com/LinchZhang/status/1459951267401273345
This feels like a non sequitur to me. What in Linch’s comment suggests that EVF should give the money back to OpenPhil? (By which I assume you mean, sell the house?)
I meant the money they took from FTX Future Fund, obviously. Or is it “Effective Altruism” to keep money that you know was stolen?
It’s much more plausible that they should give back the FTX money, once it finally becomes clear how one can even do that (lots of discussion of this on the Forum already). I expect that EVF has been going through a lot of internal agonising about how to handle their FTX-related liabilities.
This doesn’t have much direct bearing on the Abbey purchase, though.
This is a very odd question to ask in response to a comment by a non-FTX funder stating that the money came from them.