I’d love to dig a bit more into some real data and implications for this (hence, just a quick take for now), but I suspect that (EA) donors may not take the current funding allocation within and across cause areas into account when making donation decisions—and that taking it sufficiently into account may mean that small donors shouldn’t diversify?
For example, the recent Animal Welfare vs. Global Health Debate Week posed the statement “It would be better to spend an extra $100m on animal welfare than on global health.” Now, one way to think through this question is “How would the ideal funding split between Animal Welfare vs. Global Health look like” and test whether an additional $100m on Animal Welfare would bring us closer to the ideal funding split (in this case, it appears that spending the $100m on Animal Welfare increases the share of AW from 0.41% to 0.55% - meaning that if your ideal funding split would allocate more than 0.55% to AW, you should be in favor of directing $100m there).
I am not sure if this perspective is the right or even the best to take, but I think it may often be missing. I think it’s important to think through it, because it takes into account “how much money should be spent on X vs. Y” as opposed to “how much money I should spend on X vs. Y” (or maybe even “How much money should EA spend on X vs. Y”?) - which I think closer to what we should care about. I think this is interesting, because:
If you primarily, but not strictlyand solely favor a comparably well-funded area (say, GHD or Climate Change), you may want to donate allyour money towards a cause area that don’t even value particularly highly.
Ironically, this type of thinking only applies if you value diversification in your donations in the first place. So, if you are wondering how much % of your money should go to X vs. Y, I suspect that looking at the current global funding allocation will likely (for most people, necessarily?) lead to pouring all your money into one cause (probably the more neglected one). The exception being that your donations can sufficiently change global funding allocation beyond what you’d favor…
This would then suggest that there may not really be a case left for any small donor to diversify their donations? (I think this conclusion would be.. kind of strong? I am hesitant to draw it from the sort of quick thinking that went into this, but I think it’s fascinating!)
I agree that diversification may not make sense for most small donors! Some arguments in favor and against this position can be found in this topic, if you are interested.
I’d love to dig a bit more into some real data and implications for this (hence, just a quick take for now), but I suspect that (EA) donors may not take the current funding allocation within and across cause areas into account when making donation decisions—and that taking it sufficiently into account may mean that small donors shouldn’t diversify?
For example, the recent Animal Welfare vs. Global Health Debate Week posed the statement “It would be better to spend an extra $100m on animal welfare than on global health.” Now, one way to think through this question is “How would the ideal funding split between Animal Welfare vs. Global Health look like” and test whether an additional $100m on Animal Welfare would bring us closer to the ideal funding split (in this case, it appears that spending the $100m on Animal Welfare increases the share of AW from 0.41% to 0.55% - meaning that if your ideal funding split would allocate more than 0.55% to AW, you should be in favor of directing $100m there).
I am not sure if this perspective is the right or even the best to take, but I think it may often be missing. I think it’s important to think through it, because it takes into account “how much money should be spent on X vs. Y” as opposed to “how much money I should spend on X vs. Y” (or maybe even “How much money should EA spend on X vs. Y”?) - which I think closer to what we should care about. I think this is interesting, because:
If you primarily, but not strictly and solely favor a comparably well-funded area (say, GHD or Climate Change), you may want to donate all your money towards a cause area that don’t even value particularly highly.
Ironically, this type of thinking only applies if you value diversification in your donations in the first place. So, if you are wondering how much % of your money should go to X vs. Y, I suspect that looking at the current global funding allocation will likely (for most people, necessarily?) lead to pouring all your money into one cause (probably the more neglected one). The exception being that your donations can sufficiently change global funding allocation beyond what you’d favor…
This would then suggest that there may not really be a case left for any small donor to diversify their donations? (I think this conclusion would be.. kind of strong? I am hesitant to draw it from the sort of quick thinking that went into this, but I think it’s fascinating!)
I agree that diversification may not make sense for most small donors! Some arguments in favor and against this position can be found in this topic, if you are interested.