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.
> 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.
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.
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.
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.
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.
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.
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.
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.