Announcement on the future of Wytham Abbey
The Wytham Abbey Project is closing. After input from the Abbey’s major donors, the EV board took a decision to sell the property. This project’s runway will run out at the end of April. After this time, the project will cease operations, and EV UK will oversee the sale of the property. The Wytham Abbey team have been good custodians of the venue during the time they ran this project, and EV UK will continue to look after this property as we prepare to sell. The proceeds of the sale, after the cost of sale is covered, will be allocated to high-impact charities.
A statement from the Wytham Project can be found here.
My understanding (based on talking to people involved in Wytham and knowing the economics of renting and buying large venues in a lot of detail) is that the sale of Wytham (edit: as done here, where the venue will either be sold at a very large discount or lie empty for a long period of time) does not actually make any economic sense for EV in terms of its mission to do as much good as possible. It is plausible that the initial purchase was a mistake, and that it makes sense to set plans in motion to sell the venue, but my understanding is that it will likely take many years for EV to sell during which the venue will be basically completely empty, or the venue will have to be sold at a pretty huge loss. This means at this point, it’s likely worth it to keep it running.
Also based on talking to some of the people close to these decisions, and trying to puzzle together how this decision was made, it seems very likely to me that the reason why Wytham is being sold is not based in a cost-effectiveness analysis, but the result of a PR-management strategy which seems antithetical to the principles of Effective Altruism to me.
EV (and Open Phil) are supposed to use its assets and funds to help the most people and cause the most good for the world, not to protect their own reputation. Making donations and major financial decisions primarily driven by reputation-concerns is the primary pathology of most of the world’s charity landscape, where vanity projects and complicated signaling games dominate where donations go, and going down this path seems to me a very worrying development for the future of EA.
My sense is that with this move, EV and Open Philanthropy have opened up a huge number of organizations within EA to attacks by any sufficiently large online mob, despite potentially producing enormous value, given that they have demonstrated they are willing to force the leadership of the EA community to give up projects with little concern for their cost-effectiveness if they do not align with the signaling aims of Open Phil and EV.
It is possible that maybe someone made a cost-effectiveness analysis here that turned out negative, and if so I would love to see it since it has large relevance to my work. But I would be extremely surprised that a positive cost-effectiveness analysis here would cause EV to reverse the sale of the property, and in conversations on this topic with people involved it seemed that curiosity and appetite for understanding the actual cost-effectiveness of this project was very low compared to the PR-implications of it.
(To be clear, I am not saying that we should fully blind ourselves to considerations of reputation and public relations. However, I think this kind of reputational optimization is perilous and if is one of the domains where naive consequentialist-type reasoning tends to most often go awry.
I think our reputational strategy should primarily be oriented around acting with integrity and honesty. And on that dimension the central tenet of how the EA community has presented itself is that we make decisions on the basis of what we think will help the most people, and are very much not making decisions on the basis of what will look good to other people, or will put us personally in the most powerful positions.
Imagine GiveWell releasing their recommended charities saying “well, there was one charity that easily defeated AMF in terms of the cost-effectiveness of its program activities, but it was dealing with sanitization issues which are really gross that nobody wants to donate to and we expected that if we recommended it this would overall reduce the donations going through GiveWell. We thought this effect was big enough to cause us to decide to not recommend this charity as our top charity”. I think this would be crazy and clearly violate the principles that GiveWell set out according to which it compiles its recommendations. While weaker, I think something similar is going on in how this decision seems to have been made)
To the extent this is an implied characterization of what happened here, I find it unlikely to be an apt one. It is unlikely that, e.g., EVF and/or OP made an optics-based decision on account of random posters on X. I also see no reason to conclude that the decisionmakers were affected by what their friends thought. Rather, I think the decisionmakers concluded that the expected state of the world was better if EV divested Wytham. For the same reason, I think the reference to “primary pathology of most of the world’s charity landscape, where vanity projects and complicated signaling games dominate where donations go” is overdone. Even if we assume that continued operation was more economically advantageous, this is a project on the periphery of what EA is, not an object-level issue. That reputational effects may have overruled a cost-effective analysis that disregarded those effects in this particular case does not update me on the probability that EA is at risk that vanity and signaling will “dominate,” or even play a major role, in EA funding decisions writ large.
As a practical matter, funders have a huge influence on organizational operations. (This isn’t wholly unique to the charitable world: customers and investors have somewhat analogous influences on for-profits.) Giving some weight to the views of future potential funders—who may be less likely to give to a movement that remains linked to the “castle”—does not strike me as fundamentally different than “letting” current funders’ views and preferences have as much weight as they do.
To the extent criticism is directed at Dustin, Cari, or Open Phil—the EA community does not own its donors’ money, and I see no basis for demanding that they continue to associate themselves with the “castle” if they do not wish to do so. Unless there’s another donor who is willing to incur the capital and operating costs of Wytham, I don’t see any potential room for criticizing EVF itself here. Of course, anyone who thinks Wytham should be reopened is welcome to fundraise for purchasing it or a similar building.
I also submit that wise stewardship and leadership of a social movement includes some consideration of morale amongst the rank and file. I’m guessing that some community builders whose funding has been cut due to financial circumstances may have been salty about “the castle” running while they were being asked to work with fewer resources. They probably were losing some effectiveness—and morale—through having to defend Wytham. The whole situation likely contributed to some people disengaging and/or not engaging. If these sorts of effects should not be considered, then I think there is much else in the meta world that could stand a reevaluation.
Finally, I’m more willing to weight optics on meta stuff than on object-level concerns; I think it would be much more epistemically dangerous to (e.g.) refuse to value farmed animals because of that isn’t seen as legitimate by certain others than it is to sell the “EA castle” because it is getting in the way of maintaining public respect and effectiveness. Moreover, in your GiveWell hypo, the project rejection on PR grounds would be corrosive to GiveWell’s function and value proposition (to be an unbiased, objective recommender in the areas it operates in) in a way that is less true in meta (where securing more money, talent, support, and other resources for object-level work is at least a key penultimate objective).
I think Open Philanthropy staff will transparently tell you that they have recently substantially shifted towards considering optics and reputation as a core component of their grants.
I agree that Wytham itself is only one datapoint so should not update you much, though I think if you are curious about this, it wouldn’t be too hard to confirm that there is a broader shift going on (to be clear, I wouldn’t consider it vanity in that case, though broader signaling concerns seem quite substantial).
I agree that the donors should feel free to disassociate themselves from whatever they want, though in this case how the castle is being handled is a decision by EV, the most central EA organization. Also, of course, if a donor chooses to disassociate like that, it’s within the rights of EA community members to think less of them (they might still think positively on-net, but highlighting how someone’s grantmaking ignoring cost-effectiveness concerns in favor of personal reputation managemetn clearly is a valid criticism and should make you less excited about someone’s giving, and also concerned about the secondary effects of their giving)
This seems like a mistake.
I agree that it would seem more legitimate to do things for optics-reasons, but the detrimental effect on incentives and ability to think that come from optics-focused decision-making are just as real in meta work as for object-level work. The reason to not do things for optics-reasons is of course not that people will see you as more legitimate if you don’t, that’s just another optics-concern. The reason is that it affects the incentives on people to do good work, sets up an adversarial epistemic environment, and generally makes decision-making predictably worse. I don’t see why we should make a different tradeoff on those axis for meta work, where figuring out how to have a positive impact is usually substantially harder and messier than in more clear-cut global health and development cases.
Alexander Berger wrote yesterday:
Claire had previously noted that “(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.)” So the plan of reallocating the funds locked up in Wytham to replace some of its general support to EVF if OP wanted out seems to have been the understanding from the get-go.
Based on that, it sounds like the sale was EVF’s decision insofar as it could have refused, damaged its relationship with its predominant funder, and found some other way to plug the resulting massive hole in its budget. In other words: not really. And EVF would still have needed to come up with a non-OP funding source for operating Wytham; surely it was not going to get OP’s funds to directly or indirectly do so after not honoring the request to divest it had agreed in advance OP could make.
Sure, I am not saying that EV should have gone back on some kind of promise.
But generally expect that when I trade with leadership in this ecosystem that they will be held to a standard of cost-effectiveness and not a standard of looking good on optics-grounds. And I think it continues to be good to judge EV and OP for making decisions on grounds that seem inconsistent with EA principles to me.
It shouldn’t cost them like an infinite amount of social capital, but I do think it makes the people a bit less suited to being in long-term EA leadership positions (i.e. if we had an election for EA leadership, the degree to which people optimize for optics instead of cost-effectiveness would hopefully be one of the central virtues on which to evaluate our leadership).
‘I think Open Philanthropy staff will transparently tell you that they have recently substantially shifted towards considering optics and reputation as a core component of their grants.’
Why do you think this?
Because I have talked to Open Philanthropy staff who have told me this
I think assuming that this is purely based on optics is unwarranted. Like I argued at the time, talk of ‘optics’ is kind of insulting to the everyperson, carrying the implication that the irrational public will misunderstand the +EV of such a decision. Whereas I contend that there’s a perfectly rational Bayesian update that people should do towards an organisation being poorly run or even corrupt when that org spends large sums of money on vanity projects which they justify with a vague claim about having done some CBA that they don’t want to share.
Meanwhile, there’s no guarantee EA will have fresh billionaires any time soon, so even if it takes a couple of years to sell, it might be worth it, given that it a) there are alternative far cheaper-to-run venues like Lightcone and CEEALAR, and b) just recouping the sticker price would fund multiple cash-strapped EA orgs for several years.
To be clear, what I am criticizing here is not operating the venue while the sale is going on, or setting some kind of target for the operators in terms of quality-adjusted-events or estimates of counterfactual events caused, that would allow them to continue operating the venue.
I totally agree that observing someone spending money on a “vanity project” would be evidence that they are poorly run or corrupt, but like, Wytham would not be a vanity project if it were to make economic sense for EV or the EA community at large to operate. So whether a project is a vanity project is dependent on a cost-effectiveness analysis (which I don’t think really has occurred in this case).
I really did not get this from
and suggest editing it into the original comment.
Yeah, that’s fair. I’ll edit it in.
This view has been asserted many times before, but to my knowledge, it has never been explicitly defended. Why is it antithetical to the principles of effective altruism to be concerned with the reputational damage certain decisions can cause, when such damage can often severely impact one’s ability to do good?
In a comment explaining his decision to seek funding for the Wytham Abbey project, Owen Cotton-Barratt expresses a similar view. Owen writes that it is “better to let decisions be guided less by what we think looks good, and more by what we think is good.” But, to state the obvious, deciding based on what is good will sometimes require giving a lot of weight to how good the decision will look to others, because those perceptions are among the circumstances affecting the impact of our actions.
There may be a more sophisticated justification for the decision procedure to never, or almost never, allow PR concerns to influence one’s decision-making. Empirically, this doesn’t look true to me, though. For better or worse, we live in a world where PR “scandals” can harm people or movements involved in them to an extreme degree. I think we should take notice of this fact, and act accordingly.
Meta: I’m worried there could be some people-talking-past-each-other here. I never meant to claim that PR concerns shouldn’t influence one’s decision-making, but that they shouldn’t drive one’s decision-making. On this view you should certainly be willing to change direction on relatively unimportant issues for PR reasons, but should be somewhat resolute against doing so when it would change what was otherwise the central important thing you wanted to do.
I defended a similar broad position to this in a post a couple of years back on the perils of optimizing in social contexts.
Similarly, I agree with Habryka’s clarification in the thread above:
In any case I don’t think that the case in point was primarily a PR-driven decision of the type being objected to. If it had been, I think that that would have been a little corrosive to the reputation of Open Philanthropy of trying to take everything seriously and go after the most fundamental things.
Alexander Berger’s reflections on Wytham are consistent with the thing that seems to me to be desirable. He regretted not weighing possible PR risks more heavily on a grant that they regarded as marginal—that seems fine. If they let such PR risks dominate their decision-making for a non-marginal grant, or mean that they wouldn’t even get to the point of assessing whether a grant was marginal, that would (of course depending on the details) seem more unwise.
But of course you’re right that it would be bad to ~never weigh PR considerations. I used to sometimes find it kind of distasteful (/veering towards ~immoral) to try explicitly to model how other people might think of me or of orgs I was a part of. But I think this was just a mistake.
Is there going to be a post-mortem including an explanation for the decision to sell?
I’m not privy to the details of the assessment that OP did, but I was briefly consulted (as a courtesy) before this decision was made, and I understand that there was a proper cost-benefit analysis driving their decisions here.
Compared to when the original decision was made, a few things look different to me:
I originally underestimated the staffing and maintenance costs for the project
(I’m still not sure whether there might have been an accessible “shoestring” version)
After what happened with FTX, money is more constrained, which means it’s less desirable to look for ways to leverage money into things happening
I think there were somewhat fewer really excellent events than I was hoping for
Although not to undersell things:
There were many events that I feel good about having happened, and several that I feel great about
Some of the biggest benefits may have been counterfactually causing very valuable events — but this is hard to quantify well, and could drive differing judgements about the value of the project
That said, if I dug into the details, I don’t know that I’d overall agree with the decision to stop running and sell. I think the project was on an upward trajectory as it sorted out internal processes and infrastructure, and built capacity to bring in and support strong workshop directors. I think that by default that trajectory would have continued, alongside a broad trend towards bigger communities and a corresponding greater supply of strong events. My best guess is that continuing to fund it might have looked unwise-in-retrospect from 2026 (a 2-year timescale) but quite wise-in-retrospect by the early 2030s (~5–10 year timescale). But (i) I could easily be wrong about some part of this picture; (ii) it seems reasonable for this not to be the standard OP evaluates it by; and (iii) AI timelines could complicate things. In any case, the above factors make it look like a less attractive proposition than it seemed at the time of purchase (when I thought it was a clear-cut good idea).
Is your sense that if the cost-effectiveness estimate had come back positive, but not overwhelmingly positive (let’s say like a 70th percentile OP grant-dollar in the last year), that this would have flipped the decision?
Given that not vetoing this grant made Alexander’s top list of decisions he regrets, mostly because of the negative optics-aspects, I would be surprised if the cost-effectiveness estimate was actually a crux here.
I don’t really know (and have had almost no interactions with Alexander). But it would be unsurprising to me if that would have flipped the decision.
Basically: Alexander’s views seem compatible with a real felt regret after the controversy about it a year ago, and this being the first time one can talk about it publicly without undermining a grantee. Since the PR costs have by this stage largely(?) been paid, it seems quite plausible that if the cost-effectiveness analysis had come back mildly positive he’d have continued to feel regret about not having averted the past issue, while now thinking it was right to continue support.
Thanks, that’s very helpful, though if you think it’s mostly because the PR cost has already been paid, then that does provide little solace under my worldview. Let’s assume the PR costs were still ongoing, do you think it would have then flipped the decision?
+1, I’d find this very useful too!
For context: After working full-time in EA meta for >3 years, I’ve been thinking about renting or buying property in/near Berlin or in a cheaper place in Europe to facilitate EA/longtermist events, co-working and maybe also co-living. I know many others are thinking about this too, some of whom area already making plans, and such retrospectives would be really helpful to inform our decisions. If you prefer not to share it publicly, you can also email me.
From the limited info I have, Wytham Abbey seemed a good idea at the time, and I appreciate you going for it! The decision to sell was probably pretty hard to make, I hope all involved feel good about it now.
OP gave some reasoning for their views on their recent blog post:
FWIW … in my opinion, retaining the property might have been a more beneficial decision.
Also, I think some people working in the space should not make an update against plans like “have a permanent venue”, but plausibly should make some updates about the “major donors”. My guess this almost certainly means Open Philanthropy, and also likely they had most of the actual power in this decision.
Before delving further, it’s important to outline some potential conflicts of interest and biases:
- I did co-organize or participated at multiple events at Wytham. For example, in 2023, ACS organized a private research retreat aimed at increasing the surface area between Active Inference and AI Alignment communities. The event succeeded to attracts some of the best people from both sides and was pretty valuable for the direction of alignment research I do care about, and the Oxford location was very useful for that. I regret running events like that in future will be more difficult.
- I have friends in all orgs or sides involved—Wytham project, Open Phil, EV, EAs who disapproved the purchase,...
- I lead an org funded by Open Philanthropy—
I also lead an org which was fiscally sponsoring a different project of venue purchase, which was funded by FTX regrant (won’t comment on that for legal reasons)
Also, without more details published, my current opinion is personal speculation, partially based on my reading of the vibes.
My impression-from-a-distance is part of the decision is driven by a factor which I think should not be given undue weight, and a factor where I likely disagree
Factor where I possibly disagree is aesthetics. As far as I can tell, the current preferred EA aesthetics is something more similar to how recent EAG Bay looked like. At EAG Bay, my impression of the vibes of venue was… quite dystopian—the main space is a giant hall with unpleasant artificial lights, no natural light, no colours, endless rows of identical black tables utilized by people having endless rows of 1:1s. In some vague aesthetic space, nearby vibes vectors are faceless bureaucracies, borgs and the scifi portrayals of heart-less technocratic baddies. Also something about naive utilitarianism and army.
Wytham seemed to stand in stark contrast to this aesthetics: the building was old and full of quirks. The vibes were more like an old Oxford college.
Factor which I would guess was part of the decision and I suspect had weight was PR concerns. Wytham definitely got some negative media coverage both in traditional media, social media, and on this forum.
What I dislike about this, these concerns often seemed to be mostly on the Simulacra levels 3 and 4, detached from the reality of running events in Oxford, or actual concern about costs. (Why I do think so? Because of approximately zero amount of negative PR, forum criticisms etc. anyone and anything in the ecosystem is getting for renting properties, even if they are more expensive per day or per person.)
To be clear—
I don’t think these were the only or main(?) factors.
- * I would expect somewhere also exists some spreadsheet with some estimates of “value” of events at Wytham. If this is the case, I probably also disagree about some of the generative opinions about what’s valuable.
Still, given the amount of speculative criticism the purchase of Wytham generated on the forum, it seems good for transparency to also express critical view about the sale.
FWIW, I thought that the choice of venue for EAG Bay Area 2024 was quite good. It was largely open plan—so lots of chance encounters. A nice mixture of privacy and openness for the 1-on-1s, which (rightly, to my mind) the event focusses on. Comfortable, but not flashy. I just got normal, professional vibes from it—it felt like a solid, appropriate choice.
I also thought the Oakland venue was a very good choice, and was glad the events team chose it again in 2024.
That’s really sad to hear! Given the number of events hosted there and the renting costs of alternative venues, it seemed like a solid investment (while also being much more picturesque, of course). So, I’m also hoping for a post-mortem with more details.
Curious if you’ve seen or could share botecs on the all-in cost per retreat?
Naïvely, people like to benchmark 5% of property value per year as the all-in-cost of ownership alone (so ~$750k/yr here? Really not sure how this scales to properties like Wytham).
I wonder how that compares to the savings in variable retreat costs? Like if you had 20 retreats/yr are you saving (close to?) $32,500 per retreat (assuming 750k is the right number). Accommodation for 25 people for 4 nights in Oxford could plausibly be ~$20k itself, so it seems like with a given number of retreats or attendees, you could get quite close, but the numbers matter here.
My understanding was that the financial implications were somewhat close: <We had various calculations about costings, which made it look somewhere between “moderately money-saving” and “mildly money-spending” vs renting venues for events that would happen anyway, depending on various assumptions e.g. about usage that we couldn’t get great data on before running the experiment.>
If you meaningfully lower the number of events due to the new fiscal climate, it’s reasonable to think the option with the high fixed expenses will look less good than it did before. There’s also the optics issue, especially given the EVF UK is still under statutory inquiry last time I checked.
Are financial statements going to be released? In particular, how much was spent on estate agent fees, maintaince and bills? And the value of the events hosted. Is the reason for the change that EA has less money or that there was an error in the initial reasoning for buying it?
While I’m also interested in the finances, I fully understand if they prefer not to share all this info publicly. Afaik it’s not common to share such detailed financial statements publicly, even for non-profits.
“It’s not common” wouldn’t by itself suffice as a reason though—conducting CEAs “isn’t common” in GHD, donating 10% “isn’t common” in the general population, etc. (cf. Hume, is-and-ought something something).
Obviously, something may be “common” because it reliably protects you from legal exposure, is too much work for too little a benefit etc., but then I’m much more interested in those underlying reasons.
I think there is a bit of tendency to assume that it is appropriate to ask for arbitrary amounts of transparency from EA orgs. I don’t think this is a good norm: transparency has costs, often significant, and constantly asking for all kinds of information (often with a tone that suggests that it ought to be presented) is I think often harmful.
Transparency has costs, but potentially so does opacity (in terms of both loss of trust and reduced consideration for decisions that don’t need to be justified externally). Arguably both apply here: the decision obviously wasn’t uncontroversial, and the decision making process sounds quite limited for a significant commitment in a novel area. It’s also possible some of that information that wasn’t shared or subsequent metrics (I don’t think anyone is asking for original research here) would actually cast the original decision in a more favourable light
I also think its notable EA organizations and figures have made a lot of noise criticising non-EA philanthropy for lack of transparency and rigour in the past, and a norm of exempting EA organizations from calls for such scrutiny is probably worse than oversharing. In this particular case the how effective a use of funds might it have been? question isn’t arbitrary, it’s actually core to the EA mission, and might actually be useful to the people who think there is future value in EA events space as well as the doubters.
It’s on a matter of significant community concern, as well as documented concern/interest among the general public. On average, there are a couple of items at this level each year? I don’t think the downsides of “constantly asking for all kinds of information” factor into this particular case.
On the object level, the original question was:
> Are financial statements going to be released? In particular, how much was spent on estate agent fees, maintaince and bills? And the value of the events hosted. Is the reason for the change that EA has less money or that there was an error in the initial reasoning for buying it?
Even given the context I think this is asking too much. I would support a question like “I would love to know what the reasoning was: in particular, was the project financially unsustainable or were there other reasons?”.
Asking whether the financial statements for the project are going to be published is asking for way more information than is necessary or useful. From the follow up question, it sounds like Dean is interested in doing a financial audit of the project and maybe thinks they were paying too much on maintenance or something? (Apologies if I’m putting words in your mouth, Dean, but I’m trying to talk about how it comes across to me as a reader) This doesn’t seem like a reasonable avenue for Forum commenters to be encouraged to push down.
On the meta level, while there are not that many items at this level, the calls for random transparency are constant. Look at almost any post made by an EA org and you will see people asking for everything from full financial statements, to written documentation of hiring processes, to extensive reports on all kinds of internal operations.
To put it another way, by all means ask for transparency when it matters… but stick to when it matters, please!
I read Dean’s ask a bit more narrowly or at least ambiguously—although there is a reference to financial statements, the more specific asks are to how much was spent, how much value was achieved, and whether the project was not desirable in retrospect vs. merely the victim of changed circumstances. I don’t read him as proposing an audit, though I could be wrong.
The last one may be valuable for others who can be considering future capital expense vs. rental options. The other two are valid things for donors to consider when deciding whether to give to EVF (especially unrestricted funds) in the future.
Also, if Wytham were a legally separate entity, pretty detailed information would have to be released as a matter of course on Charity Commission filing (UK) or on the Form 990 (US). So, I don’t think I view asking for ~ that level of information separated out for a financially significant project as a huge departure from normal practice.
That’s not to say that I think full accounting-type financial statements should be released; I don’t have a clear opinion on that and it would probably depend on what already existed. If they exist in very easily releasable format, I’d start with a presumption of release and look for specific, valid reasons they shouldn’t be. Ease of release + significant public interest = presumptive release in my book for a nonprofit.
I didn’t think about my question that deeply. I didn’t mean to offend anyone. The bid-ask spread does seem equally relevant to the estate agent fees. It seems interesting whether the answer is reputation management, mistaken initial calculation, or CEA having less money. If they have less money, I am more inclined to donate to CEA than if the answer is reputation management or making a large error.
What are the costs of full transparency? I am under the impression that this would be good by encouraging competition between non-profits and, therefore, promoting efficiency. This is a weakly held belief. Not necessarily putting a lot of time into transparency, but releasing most internal accounts to the public.
This seems like a pretty weak argument to me. If Apple was to spin off its Apple Watch business as a separate publicly traded company, that new firm would have to release pretty detailed financial information. But because they are part of Apple, they don’t, and basically no firm would choose to release this information. You’re right that, if Wytham was a separate org, it would be standard practice for them to disclose the info—but they are not, and the standard practice for subsidiaries is to release much less info.
I don’t think that’s a particularly good analogy. No one can buy stock in “Apple Watch,” only in undivided Apple. In contrast, EVF has presented itself more as a collection of projects that (e.g.,) fundraise as projects for their own work, not as part of one big EVF fundraising appeal that is split up based on centralized EVF preferences.
I think the better analogy would be Harvard, which likewise expects its tubs (high-level administrative units, like the law school) “to be self-financing: to prepare its own budgets, raise its own funds, and keep itself solvent.” Even though each tub has no separate legal identity, it would strike me (and I suspect most donors) as rather odd if Harvard only released significant financial information at the level of the Harvard Corporation.
[https://www.harvardmagazine.com/2004/05/harvard-a-to-z-html]
Yes, Harvard Law School publishes details for the general public, but that is surely because HLS is trying to fundraise from the general public. Wytham fundraised from a small group of private donors, and presumably they got to see the financials. Wytham to my knowledge has never attempted to solicit donations from the general public so does not have the same need to share this information with the general public.
The Wytham project doesn’t fundraise from anyone now (having decided to shut down); the rationale for releasing at least some of the requested information is to evaluate EVF, which did and does solicit public donations. Its board was intimately involved with the controversial Wytham grant in the first place, and likely the decision to shut down a project also was ultimately a board-level decision. (There are also reasons for non-donors to want to evaluate EVF, given its leadership role in the ecosystem.)
This does push us a bit back toward the Apple Watch example. But I think entities with a tub-based structure will ordinary experience both significantly lower costs and risks to releasing more detailed information. Almost by definition, the tub-based model requires a more significant degree of internal accounting than a joint-pot model. While that may be of little significance for one of the world’s largest companies, I think the extent to which added transparency would require incurring additional costs / cause diversion is pretty relevant when we have small-to-midsize nonprofits in mind.
Also, Apple faces a risk of divulging competitively valuable information—e.g., how much it thinks watch R&D is worth investing in, line items for specific research projects, etc. And divulging competitively valuable information is antithetical to the main reason (shareholder interests) for Apple’s existence which is also related to why one might expect more detailed disclosure in the first case. It’s not clear what the analogous risk to a tub-based (or really any) nonprofit in terms of its reason for existence (i.e., the public interest).
Sure, if EVF released more detailed information about Wytham Abbey, that would help people evaluate EVF a little bit, in the same way that if Apple released more detailed information about Apple Watch, that would also help shareholders evaluate Apple. It could also help bondholders, consumers, academics and policymakers make decisions. In both cases the impact is limited by the fact that the aggregate numbers are already released, so if EVF/Apple had an especially bloated cost structure on Wytham/Watch, that implies some other EVF/Apple division was extra-efficient.
I don’t know exactly how Apple is internally organized, but I strongly suspect there is an Apple-Watch-level P&L calculated for planning purposes and compensating management. I would expect Apple Watch to have more professional accounting than Wytham, and to be more able to bear the additional costs involved in publishing (bringing internal numbers up to GAAP/IFRS standards etc.).
You’re right that by publishing information Apple could help competitors, and this is a significant disincentive. It’s less clear to me however that this should be a considered a cost from a social point of view; helping competitors make decisions could help increase competition and the spread of good practices in the market.
It’s plausible that it was an error in the initial reasoning for buying it, but CEA will additionally have to likely take a huge loss on selling it, and I think it’s unlikely that that makes sense from a cost-effectiveness standpoint.
My vague sense, partially from the Open Philanthropy update is that reputation management was the primary consideration here.
What do you mean by take a huge loss? I’m not sure paper losses are relevant here.
I mean it in the sense that they will have to sell substantially below market value if they want to sell it quickly.
This kind of property tends to have huge bid-ask-spreads and the usual thing to do is to continue operating the property while looking for a buyer (my guess is they would succeed at selling it eventually at market value, but it would take a while).
Is that true even when “operating” means “making commitments to events many months out”? Which I would expect to make the building hard to sell.
(Though I guess you could switch to a new operating mode where you only do bookings on quite short notice? But I expect that would lose a very large part of the value of events since many of the people you want to attend can’t do things on 3w notice)
Sales for this kind of property would almost always have many months of notice, so I don’t think scheduling things 6 months in-advance would deter potential buyers.
It would be pretty normal and standard for a buyer to have to wait 6 months before they can take possession of the property, so I don’t think this would matter that much. And my guess is 6 months is plenty of time for Wytham to provide most of its value.
So the question is basically whether the (upkeep costs + opportunity cost of money—benefit from events) is more or less than discount from selling quickly?
Yep, I think that would be a reasonable calculation.
We don’t know from this announcement that they are planning to prioritise rapidity of sale over time-adjusted return—it could still make sense to not continue e.g. paying as many salaries, and to have declared it shut down as a project.
Yes, totally possible. I am just specifically claiming that given that the cost of capital is one of the major expenses for this project, it would be surprising to me if it wasn’t worth the marginal cost of operating it on financial grounds, at least until some kind of buyer was found.
I am trying to make a pretty concrete claim about how I expect a benefit calculation to come out if done well, and definitely could be wrong (the thing that I have higher confidence in is that this decision wasn’t very sensitive to such a cost-benefit calculation and seems more driven by other factors).
I was the main person at Open Philanthropy working on our recent funding evaluation of Wytham Abbey. I’d like to share some key points on why I recommended that we cease future funding for the Wytham project and that the Abbey be sold. I can’t speak for Effective Ventures, which made the final decision to sell the property, or other people at Open Phil who, as per our standard process, approved my recommendation; but it’s probably fair to say that my work was among the most important inputs into the decisions that led to the outcome announced here.
Contrary to speculation in another comment, my recommendation was primarily driven by a cost-effectiveness analysis. In doing so, I considered the following benefits Wytham was providing:
Cost savings for non-counterfactual events
Wytham provides a “free” venue to events that would otherwise have had to pay for some other venue (but would have happened, just elsewhere)
Counterfactual events
The availability of Wytham causes some events that wouldn’t have happened otherwise, e.g., because the event organizers couldn’t have gotten funding for a venue in time or didn’t have the staff capacity for things like venue scoping, organizing food, and some other ops/logistics things that Wytham takes care of. There’s probably also some effect of increasing the salience that running retreat-like events is something one can relatively easily do thanks to Wytham.
Improving the quality/impact of events
You could imagine that due to factors like its more “secluded” location, closeness to nature, the layout and decoration of rooms, etc., Wytham enables better or deeper conversations than would have happened elsewhere; and in fact several people reported that Wytham seemed like a good venue for events to them in terms of its vibe. In addition, probably some non-counterfactual events would otherwise have happened as a shorter version, or not as residential events where participants stay overnight, thus allowing for less conversation/bonding time; and some events would plausibly have benefitted in various ways from the accumulated event hosting experience of the Wytham team.
The bottom line was that historically, i.e. based on looking at past Wytham events, Wytham’s operating expenses (for now ignoring the opportunity cost of capital being bound up in the property) clearly exceeded Open Phil’s willingness to pay for these benefits given our current funding bar. (Under our pre-Nov 2022 funding bar, which was the one we were using at the time of the original grant to buy and operate Wytham Abbey, it would have comfortably been the other way around.)
I then considered how likely this seemed to change in the future. While there were several reasons to expect both falling costs and increasing benefits, I didn’t end up being sufficiently optimistic, though that seemed like a much closer call. PR-related questions played a role at this stage, but mainly via the relatively specific channel of making the venue less attractive for some organizations that may have wanted to host future events there if not for worries that they’d then be associated with the venue (though in some of these cases, the desire to avoid being associated with the EA community more generally was more important for that than the implications of Wytham-specific media coverage). These considerations were not decisive on their own. Depending on how you individuate the reasons considered in my analysis, I’d say that PR considerations were among the top 10, but not among the top 3 most important considerations, ranking behind e.g. Wytham’s track record, some more mundane fundamentals of the venue (e.g., the number of bedrooms and bathrooms) constraining the kind of events and audiences Wytham seemed like a good fit for, and strategic background assumptions about the value of different kinds of events.
The above analysis established that continuing to fund Wytham’s operating expenses wouldn’t have met our funding bar. However, this doesn’t conclusively answer the question whether, to maximize impartial impact, we should recommend that EV sells the property (e.g., what if they could find other funding for some or all of Wytham’s operating cost?). That also depends on the opportunity cost of capital being bound up in Wytham – capital that could otherwise be used for other high-impact projects or invested into other assets to maximize its financial return (with those returns being directed to high-impact projects in the future). I spent more time looking into this question, and again PR considerations were relatively minor; my analysis was primarily based on theoretical arguments on the financial returns of different asset classes (e.g., real estate vs. stocks), data on the price appreciation of real estate in various relevant reference classes, estimates of foregone rental income while EV is holding the property, the appropriate amount of risk aversion for financial returns, the willingness to pay vs. cost estimates from the previous analysis, and whether the conclusion could plausibly change depending on different assumptions on how much the existing portfolio of capital intended for global catastrophic risk reduction might be underinvested in Wytham-like assets. On net, it seemed to me that EV holding on to Wytham would amount to a sufficiently large cost that hypothetical third-party funders or other realistic changes would be unable to compensate, such that from an impartial perspective it seemed better to recommend that EV sells the property.
A commenter asked what would have happened if my cost-effectiveness analysis had come back more positive. There are two ways to understand this question. One is: How would it have affected my recommendation if my impression of Wytham’s impact potential (and/or potential cost savings) had been stronger? It’s hard to make confident claims about such counterfactuals, but I suspect that I would have spent more time considering the implications of the broader PR picture, and what that might mean for Wytham’s future impact and any potential externalities on other projects (e.g., effects on the perception of Effective Ventures or EA more broadly), since that seems like a relatively ‘high-variance’ consideration that could potentially flip an initially positive-seeming picture. My guess is that I would’ve concluded that these broader PR issues were on net a moderately strong reason against funding Wytham, though the issue is sufficiently complex that my error bars are fairly wide here. I would then have considered this together with all other relevant considerations, including the amount by which (in this hypothetical) Wytham seemed above our funding bar based on quantitative estimates that ignore these broader PR ramifications; depending on my impression of the strength of the various considerations at play, I might or might not have recommended to renew our funding for Wytham. To be clear, this would have been an entirely normal process: For reasons that will be very familiar to many readers (see, e.g., discussions here and here, though note I don’t necessarily agree with every point), our funding recommendations are typically based on a holistic analysis of several quantitative and qualitative inputs, rather than being mechanistically determined by the output of a single-number quantitative cost-effectiveness model; and when using the term “cost-effectiveness analysis” in this comment, I was referring to just such a holistic analysis. For this reason, I would summarize this scenario as “if some aspects considered in the cost-effectiveness analysis had suggested a higher expected impact for Wytham, I would have spent more time on the analysis, which may or may not have changed my ultimate recommendation” – not as “if the cost-effectiveness analysis had come back more positive, I might still have recommended to not fund Wytham based on some highly unusual and qualitatively different additional step”.
The second way to understand the question is: If I had recommended to fund Wytham, would the final Open Phil decision-makers have agreed? The short answer is that I don’t know, and can’t speak for other people. On one hand, the base rate of grant recommendations not being approved is low. On the other hand, this was clearly an unusual case, given that our previous funding for Wytham had been an outlier regarding the amount of externalities on other projects. I would therefore have expected decision-makers such as Open Phil leadership or possibly Cari and Dustin (who, as described in our annual review blog post, have recently been more engaged with our work) to review a hypothetical recommendation to renew our funding for Wytham’s operations in more depth than usual, and would have anticipated that the risk of non-approval was higher than baseline. That expectation likely also had some effects on how I went about my evaluation, e.g., how much time I was willing to spend to proactively search for long-shot attempts to change the bottom line such as by proposing changes to the project, thinking about potential different uses of the property, etc., (though these would generally be relatively uncommon uses of time for a grant investigator since we can typically achieve a higher grant volume – and thereby have more impact – by evaluating more shovel-ready proposals rather than by trying to bolster projects that at first blush don’t meet our bar).
So I don’t want to claim that PR or adjacent considerations had zero influence here: Specific ways in which they might limit Wytham’s future impact were among the top 10 (though not top 3) most important considerations behind my recommendation not to renew funding; and while I don’t have any reason to believe that they would have been decisive in all or even most possible worlds, there are some counterfactual worlds in which broader PR considerations regarding e.g. the impact on other projects would have tipped the scales against renewing our funding. But I want to be very clear that, from my perspective, we fundamentally conducted a standard grant investigation that aimed to holistically weigh an opportunity’s expected impact against its cost, and concluded that it did not meet our bar.
How to best handle the property until it’s sold was outside the scope of my investigation, so I don’t think it’d be appropriate for me to comment on it. We haven’t advised EV what to do with Wytham Abbey until it’s sold, nor have we recommended a specific date by which to conclude the sale (though I gave some input on how they might want to trade off timing and price).
I don’t think I’ll have the bandwidth to engage in further discussion, and I’m sorry that this comment likely won’t answer all the questions people might have. But it seemed better to provide some high-level information on the work I did than to let readers reach an inaccurate understanding of what happened.
As a closing note, my personal view is that this has basically been a tragic story: We funded a project, the project team overall did a good job running it from an operational perspective (based on the impression I got during my evaluation), and then events beyond the control of anyone involved meant they were no longer above our funding bar.
Wytham Abbey has been such a gem for events, and the thought of it closing is disheartening. I’m curious to know more about the decision-making process behind this, especially considering its popularity and the challenges of finding comparable venues. Hopefully, there will be some insights shared soon.
This case is harder, but I’ll note that in general I don’t read EV explanations of spending less than $100mn. If there wasn’t all the controversy, I doubt I’d care and probably I don’t want EV feeling the need to explain every $20mn expenditure. Though this case may be different, hard to think about.
You can read what you want of course, but I don’t think ginormous cost is the sole factor that justifies scrutiny.
For example, if an EA org spent it’s donor money on a very expensive watch for their CEO, I’d would expect some very good justification. The thousands of dollars might not be large in the grand scale, but that’s still money that could have gone to an effective cause, and it could be evidence of bad decision making, wastefulness, or even corruption.
While I would say $100mn is probably too high a bar, buying Whytham Abbey wasn’t really $20mn expenditure as they’ll sell it and get most of this back. So the actual expenditure (cost related to the transaction, running costs, overhead, gain/loss, not including any reputational cost) of the purchase is probably between $1mn and $4mn (depending on what they manage to sell it for).
Has EVF ever had a $100MM expenditure? If I recall the 990s and Charity Commission reports, annual expenses were in the tens of millions of USD and GBP, and some of that was EA Funds grantmaking + GWWC passthrough.
This seems like the wrong order of magnitude to apply this logic at, $20mn is close to 1% of the money that OpenPhil has disbursed over its lifetime ($2.8b)
Yeah $20,000,000 here, $20,000,000 there, pretty soon we’re talking about real money.
Maybe, but nonetheless it is true. I don’t read ’em. Do you?