Thanks Vasco. On (1) and (2), I think that the grant sizing process is messier than it may seem. So the portion of a group’s budget we can be is often a major factor, but not necessarily the limiting one. And I don’t think our considerations all boil down to us setting a given target revenue for a group, in large part because we don’t want to create a perverse incentive for other funders to not fund groups we do and for our grantees to not fundraise.
On (3), I agree there’s some chance that in aggregate your donation will flip a group into a different funding category. I just think it’s quite rare, because the ideal revenue level for a group is not our only consideration in funding levels. See also the point above about us explicitly trying to avoid gaming other funders or groups’ fundraisers.
On the final point, I think you’re wrong to assume that if funding for farm animal welfare increased by $100M then there’s a 100% chance our program’s funding would decline by $100M (which to be clear is more than our program’s budget). I think reduced neglect could influence Open Phil leadership to allocate less funding to a cause area. But I think the odds it did so are much below 100% and the amount it would do so by is far less than the increased funding in the space (here $100M).
On the final point, I think you’re wrong to assume that if funding for farm animal welfare increased by $100M then there’s a 100% chance our program’s funding would decline by $100M (which to be clear is more than our program’s budget). I think reduced neglect could influence Open Phil leadership to allocate less funding to a cause area. But I think the odds it did so are much below 100% and the amount it would do so by is far less than the increased funding in the space (here $100M).
I gave a bad example because 100 M$ is a significant fraction of the amount granted in farm animal welfare over the number of years respecting the budget allocation. I also assumed an elasticity of 1, but I can see something like 0.5 would be more reasonable. So my corrected statement would be something like a new animal welfare donor granting 10 M$ in a similar way to Open Phil (i.e. not just an increase in 10 M$ of funding, which may be poorly allocated) would decrease Open Phil funding in expectation by 5 M$. However, I see your replies to points 1 to 3 would also apply, such that the elasticity may be closer to 1, and therefore one would not need to worry about Open Phil decreasing funding to animal welfare.
Yeah that makes sense. I think you’re right that it’s plausible that new funding could decrease Open Phil funding in the space. I just think it’s low odds, and would only be to a much lower extent than the size of new funding.
Thanks Vasco. On (1) and (2), I think that the grant sizing process is messier than it may seem. So the portion of a group’s budget we can be is often a major factor, but not necessarily the limiting one. And I don’t think our considerations all boil down to us setting a given target revenue for a group, in large part because we don’t want to create a perverse incentive for other funders to not fund groups we do and for our grantees to not fundraise.
On (3), I agree there’s some chance that in aggregate your donation will flip a group into a different funding category. I just think it’s quite rare, because the ideal revenue level for a group is not our only consideration in funding levels. See also the point above about us explicitly trying to avoid gaming other funders or groups’ fundraisers.
On the final point, I think you’re wrong to assume that if funding for farm animal welfare increased by $100M then there’s a 100% chance our program’s funding would decline by $100M (which to be clear is more than our program’s budget). I think reduced neglect could influence Open Phil leadership to allocate less funding to a cause area. But I think the odds it did so are much below 100% and the amount it would do so by is far less than the increased funding in the space (here $100M).
Thanks, Lewis!
I gave a bad example because 100 M$ is a significant fraction of the amount granted in farm animal welfare over the number of years respecting the budget allocation. I also assumed an elasticity of 1, but I can see something like 0.5 would be more reasonable. So my corrected statement would be something like a new animal welfare donor granting 10 M$ in a similar way to Open Phil (i.e. not just an increase in 10 M$ of funding, which may be poorly allocated) would decrease Open Phil funding in expectation by 5 M$. However, I see your replies to points 1 to 3 would also apply, such that the elasticity may be closer to 1, and therefore one would not need to worry about Open Phil decreasing funding to animal welfare.
Yeah that makes sense. I think you’re right that it’s plausible that new funding could decrease Open Phil funding in the space. I just think it’s low odds, and would only be to a much lower extent than the size of new funding.