Thanks for the thoughtful question Joel!
I’ll take this question in three parts:
(1) Why not just give the money to strong existing foundations whose values match your own?
Greater funder diversity is a good thing.
It contributes to worldview diversification within EA, and reduces the chance that important cause areas go unfunded (more on this below).Existing foundations don’t have the capacity to do everything.
The world is big—there are a lot of problems to solve, a lot of potential solutions to consider funding, and a lot that needs to be learned to do this well. As a result, most foundations make the wise decision of limiting their scope by some combination of cause area, geography and recipient organization size/maturity (e.g. GiveWell focuses on mature global health organizations that can absorb many millions in funding). In aggregate, the scopes of these foundations do not sufficiently cover all of the most important areas (see Joey’s post on specific funding gaps for example). So we need more organizations and more grantmakers working on figuring out what to fund!
I’d love to see new foundations started that address some subject matter gaps, e.g. “GiveWell, but for policy interventions” or “GiveWell, but for family planning”. I’d also love to see some foundations started that fill functional niches within the funding landscape, e.g. a foundation that specialises in regranting (i.e. where their comparative advantage is in vetting people, rather than projects).
(2) Shouldn’t we be skeptical of smaller/newer grantmaking organizations because it’s hard to compete with the likes of GiveWell on accuracy?
They don’t have to compete: They can focus on the many cause areas and intervention types outside of the scope of organizations like GiveWell.
Small funders play an important role that GiveWell can’t: Yes, the level of rigor that GiveWell puts into vetting projects is hard to compete with! But because they invest so much resources into each grant decision, GiveWell is only able to consider mature organizations that can absorb tens of millions in additional funding. Meanwhile, assessing smaller, less mature organizations is very important, because (a) if no one supports them they will never become mature enough for the likes of GiveWell, (b) there are likely be extremely cost-effective opportunities that can’t ever reach GiveWell’s scale requirements.
Being small comes with other comparative advantages: For example, moving more quickly to respond to time-sensitive opportunities.
(3) Shouldn’t people who have ended up in the position of disbursing funds by random chance (e.g. through inheritance) just defer to others to make the grantmaking decisions?
It’s true that a person with a lot of funds does not by default have the skills, time or interest needed to do an excellent job at disbursing it. But:
In many cases they do have these qualities!
This program isn’t just for the owner of the funds—it is for key decision-makers within grantmaking organizations, like executive directors, senior grantmaking staff and program officers.
If the owner of the funds decides to defer to somebody else, there’s no getting around the need for them to make some key decisions themselves, for example who to hire to disburse the funds for them (i.e. who to defer to), or what they mean by ‘impact’ or ‘doing good’. We hope that our program will better equip participants to make these decisions.
Hello! One point that seems important to make: “People in the space” being skeptical of a startup idea, or even being confident it’s a bad idea, is not good evidence that it’s a bad idea.
Whilst we can expect subject matter experts to be skeptical of ideas that turn out to be bad, we can also expect them to be skeptical of a lot of ideas that turn out to be good!
This is true of many extremely successful for-profit start-ups (it’s mentioned in Y-Combinator lectures a lot) and of non-profits as well, including many of CE’s most successful incubated charities. If i’m not mistaken, it’s even true of CE itself! When it’s co-founders asked experts for their advice when considering launching the Incubation Program, the majority view was that it was a bad idea. I, for one, am glad they didn’t listen! If you look around the room you’re in now, you’re almost certainly surrounded by a number of inventions that “people in the space” said were impossible or a bad idea. The job of an entrepreneur (or a researcher identifying start-up ideas for entrepreneurs) is to figure out when “people in the space” are wrong, or at least likely enough to be wrong for it to be worth trying.
So in conclusion: Track record of CE incubated charities—good indicator. Whether or not people in the space were skeptical—not a good indicator.