Iâm not sure what it means for a candidate to be âmore cost-effectiveâ, but I assume it equates to âbetter at their jobâ (assuming a fixed salary).
Yes. I meant more impactful per unit cost (accounting for the direct impact of the job, and its time and financial costs).
My impression, from spending a lot of time in EA orgs and working on several hiring rounds, is that the difference between âbest candidateâ and âsecond-best candidateâ is often well over 10% (though, to be fair, orgs may be wrong about which candidate is best).
The expected difference will tend to be smaller than the observed difference (the best candidates will tend to regress more towards the mean). I do not know how much this matters, and the extent to which organisations try to account for it, but I guess you are right that the most cost-effective candidate are often more than 10 % more cost-effective than the 2nd most cost-effective. Donating more 10 % of the gross salary to an organisation 10 to 100 times as cost-effective at the margin as A would still be 2 (= 0.1*10/â0.5) to 20 (= 0.1*100/â0.5) times as impactful as joining A for an alternative hire 50 % as impactful who would get the same salary.
Your model seems to assume that a donor will support the most cost-effective intervention in an area. But if less cost-effective interventions have a lot more jobs, doesnât that imply they also have more funding, and thus that the average donor is more likely to support them?
Great point. I would just say ârandom fundingâ instead of âaverage donorâ. I see now that the vast majority of people considering joining A would not find the comparison I made just above relevant. If they thought there was another organisation 10 to 100 times as cost-effective at the margin as A, they would most likely only consider joining organisations significantly more cost-effective at the margin than A.
The implicit assumption Iâm reading from your model is that someoneâs impact within a job is worth exactly what they are paid.
Yes, I am making this assumption. I think it roughly applies to new jobs. My thinking is that funders should fund organisations until they are indifferent between funding them more or not. If a funder thought that an organisation spending 100 k$/âyear more on a new job would be worth 1 M$/âyear more to the funder, they would be leaving 900 k$/âyear (= 1*10^6 â 100*10^3) of impact on the table, in the sense that giving 100 k$/âyear more to the organisation would be as impactful as the funder having 900 k$/âyear more to spend.
In my experience, EA orgs tend to describe themselves as much more limited by talent than funding.
I wonder whether this depends on the audience. Organisations have an incentive to highlight talent constraints in hiring efforts (to get more applicants), and funding constraints in fundraising (to get more funding).
I am not sure what organisations mean when they say they are limited by funding or talent. Organisations are always constrained by both funding and talent to some extent. Additional funding can be used to retain and acquire talent via higher salaries and greater spending on hiring, including on field-building efforts like fellowships. I believe it would be better for organisations to say how much they value the best candidates over the 2nd best candidates (for roles they are hiring for) in terms of additional funding instead of just saying they are funding or talent constrained.
I think someone who changes their career is more likely to start donating than vice-versa.
I agree. In addition, I think people who change to more impactful jobs will tend to donate to more cost-effective organisations.
If you think most people make far more impact by donating than working, and that itâs much easier to convince people to donate than change careers, this factor wonât change much; youâd still prefer lots of new donors to a small number of new workers who also donate. But I still thought it was worth noting.
Makes sense. I do not know whether marginal funding should mostly go towards adocating for cost-effective donations, including via earning to give, or careers.
I appreciate the impetus to think about the question!
Yes. I meant more impactful per unit cost (accounting for the direct impact of the job, and its time and financial costs).
The expected difference will tend to be smaller than the observed difference (the best candidates will tend to regress more towards the mean). I do not know how much this matters, and the extent to which organisations try to account for it, but I guess you are right that the most cost-effective candidate are often more than 10 % more cost-effective than the 2nd most cost-effective. Donating more 10 % of the gross salary to an organisation 10 to 100 times as cost-effective at the margin as A would still be 2 (= 0.1*10/â0.5) to 20 (= 0.1*100/â0.5) times as impactful as joining A for an alternative hire 50 % as impactful who would get the same salary.
Great point. I would just say ârandom fundingâ instead of âaverage donorâ. I see now that the vast majority of people considering joining A would not find the comparison I made just above relevant. If they thought there was another organisation 10 to 100 times as cost-effective at the margin as A, they would most likely only consider joining organisations significantly more cost-effective at the margin than A.
Yes, I am making this assumption. I think it roughly applies to new jobs. My thinking is that funders should fund organisations until they are indifferent between funding them more or not. If a funder thought that an organisation spending 100 k$/âyear more on a new job would be worth 1 M$/âyear more to the funder, they would be leaving 900 k$/âyear (= 1*10^6 â 100*10^3) of impact on the table, in the sense that giving 100 k$/âyear more to the organisation would be as impactful as the funder having 900 k$/âyear more to spend.
I wonder whether this depends on the audience. Organisations have an incentive to highlight talent constraints in hiring efforts (to get more applicants), and funding constraints in fundraising (to get more funding).
I am not sure what organisations mean when they say they are limited by funding or talent. Organisations are always constrained by both funding and talent to some extent. Additional funding can be used to retain and acquire talent via higher salaries and greater spending on hiring, including on field-building efforts like fellowships. I believe it would be better for organisations to say how much they value the best candidates over the 2nd best candidates (for roles they are hiring for) in terms of additional funding instead of just saying they are funding or talent constrained.
I agree. In addition, I think people who change to more impactful jobs will tend to donate to more cost-effective organisations.
Makes sense. I do not know whether marginal funding should mostly go towards adocating for cost-effective donations, including via earning to give, or careers.
Likewise.