Brendon_Wong

How You Can Coun­ter­fac­tu­ally Send Millions of Dol­lars to EA Charities

EA-Aligned Im­pact In­vest­ing: Mind Ease Case Study

EA could benefit from a gen­eral-pur­pose non­profit en­tity that offers donor-ad­vised funds and fis­cal sponsorship

EAs and EA Orgs Should Move Cash from Low-In­ter­est to High-In­ter­est Options

EA An­gel Group: Ap­pli­ca­tions Open for Per­sonal/​Pro­ject Funding

• Brendon_Wong 9 Jun 2020 23:06 UTC

  31 points

  0 ∶ 0

  on: EAGxVir­tual Un­con­fer­ence (Satur­day, June 20th 2020)

  How financial improvements can counterfactually increase funding for EA charities by tens of thousands to millions of dollars per charity

  I run Antigravity Investments, an EA social enterprise with the mission of indirectly donating millions to charity by helping charities invest more effectively. Last year, we published this EA Forum article explaining why charities should shift cash from low-interest to high-interest accounts: https://​​forum.effectivealtruism.org/​​posts/​​YjN6cGoXxPZeqCh4Z/​​eas-and-ea-orgs-should-move-cash-from-low-interest-to-high.

  This talk will cover new research done by Antigravity Investments on approximating opportunity costs that charities incur by not following best practices in cash management. We will cover applying our opportunity cost estimation methodology across selected EA charities as well as across a data set of over 300,000 U.S. charities.

  We will also cover how our outreach strategy has fared over the past year, and perhaps most importantly, recommend concrete steps EA community members and operations/​finance staff at EA organizations can take to increase funding for high-impact causes.

  I am based on the West Coast and would prefer the late sessions.

Re­quest­ing com­mu­nity in­put on the up­com­ing EA Pro­jects Platform

Ideas for Im­prov­ing Fund­ing for In­di­vi­d­ual EAs, EA Pro­jects, and New EA Organizations

• Brendon_Wong 24 Feb 2019 1:31 UTC

  23 points

  0 ∶ 0

  in reply to: Taymon’s comment on: EAs and EA Orgs Should Move Cash from Low-In­ter­est to High-In­ter­est Options

  Since you mentioned CEA, I’ll use them as an example. CEA internally values staff time at $75 an hour. Assuming CEA moves the $4,005,000 in cash (as of January 31, 2019) in EA Funds to StoneCastle’s zero-risk 2.4% banking option, the expected yearly gain is $96,120. Making the conservative assumption of 10 hours of setup time to fill out a short application and get internal approval and 10 minutes a month using an online interface to transfer money between StoneCastle and a checking account, this adds up to $900 a year in operational expenses, which is under 1% of the expected gain. My understanding is that CEA is already actively moving to implement a better cash management solution.

  I believe that EA organizations that are currently keeping money in a checking account or low-yield savings account are not aware of how much additional annual funding they could be generating with a low investment of staff time. The goal of this article is to make more organizations aware of the potential gains and low cost of implementation of a much higher-yielding cash management program and provide specific guidance on how to get started.

• Brendon_Wong 28 Mar 2019 7:47 UTC

  21 points

  0 ∶ 0

  on: $100 Prize to Best Ar­gu­ment Against Donat­ing to the EA Hotel

  The following arguments are ideas and have not been thoroughly researched. They may not reflect my actual views. Counterarguments are not mentioned because the OP is “mainly interested in seeing critiques.” I may post counterarguments after the reward deadline has passed.

  Claim to argue against: “$172,000 to the EA Hotel has at least as much EV as $172,000 distributed randomly to grantees from EA Meta Fund grantees or EA grants grantees.”

  Argument 1: The EA Hotel has a low counterfactually-adjusted impact

  In this post, the EA Hotel states:

  Out of 19 residents, 15 would be doing the same work counterfactually, but the hotel allows them to do, on average, 2.2 times more EA work—as opposed to working a part time job to self-fund, or burning more runway.

  This datapoint supports the view that most EA Hotel residents would be doing the same work whether or not they stay at the hotel. The claim that “the hotel allows them to do, on average, 2.2 times more EA work” could be incorrect. To gain more certainty about this, the EA Hotel should track what residents that are not accepted actually end up doing instead.

  EA Hotel residents have many options to consider to do the same work while not staying at the hotel. For example, depending on the time and location requirements of the work, they could do some combination of: (1) part-time work to finance their living expenses, (2) living with parents, friends, or another location with near-zero living expenses, or (3) living in very low-cost housing that resembles the cost of the EA Hotel.

  If someone pursues option (2), the EA Hotel is negative EV because someone can choose a free option instead of the EA Hotel, which consumes community funds.

  If someone pursues options (1) and (3), they might only have to work a very limited amount of time. For example, I believe I recently heard of someone that was able to find a one bedroom living arrangement in Berkeley, CA in a large house for $500 a month, although they have to share a bathroom with many people. So someone might only need to do paid work 25% of the time and can do EA work 75% of the time. This suggests that the “2.2 times more EA work” figure greatly overstates the benefit of the EA Hotel in terms of reducing living expenses. Pursing options (1) and (3) seems to be feasible for the vast majority of people.

  If direct funding allows people to pursue option (3) and secure low-cost housing, and if the cost is around the same as the EA Hotel, there may be no need for the EA Hotel itself to exist. The question becomes what is the counterfactually-adjusted impact of funding living expenses at the EA Hotel compared to option (3)? Adjustments should be made for things like missing out on the benefits of living elsewhere than Blackpool as well as relocation time and expenses which would further reduce counterfactual impact. The EA Hotel community certainly provides benefits, although coworking out of REACH may provide similar benefits.

  Argument 2: The EA Hotel should charge users directly instead of raising funding

  Rather than fundraising from EAs, the hotel should try to directly charge people who are benefiting from their services and community, which is an argument against donating to the hotel.

  There doesn’t seem to be a need to fund people who can afford the hotel. It’s not clear what proportion of people fall under this category, but considering that it only takes 13 weeks of work at $15/​hour to pay $7,900 for a one year stay at the hotel, it is possible that majority of residents can already afford to stay at the hotel.

  For people who cannot afford the EA Hotel, applicants to funding organizations like EA Grants can include that they are requesting funding for living expenses and indicate EA Hotel expenses as part of their requested grant funding. EA Grants evaluators and other funders may be better equipped to evaluate the EV of projects people are working on as opposed to EA Hotel staff. If EA Grants can already cover this, there is no need to donate to the EA Hotel.

  Argument 3: Funding projects has a higher impact than funding living expenses

  I assume that EA Grants funds applicants’ project expenses as well as their personal salary and living expenses. This could be higher impact than solely funding living expenses. Working at the EA Hotel with an unfunded project may be quite unproductive, particularly if the project requires funding to get anywhere. Seeking early-stage EA project funding seems to require waiting for long periods of time (perhaps months) for funders to get back to you rather than working full-time trying to acquire funding.

  Argument 4: People should not donate to the EA Hotel until they improve their impact metrics and reporting

  The EV estimation for the EA Hotel is highly mathematical and commenters have expressed that it is difficult to follow. Actual impact reporting appears to consist of testimonials which are hard to evaluate. It’s even trickier to evaluate the counterfactually-adjusted impact.

  What links here?

  • My Q1 2019 EA Ho­tel donation by vipulnaik (1 Apr 2019 2:23 UTC; 120 points)

• Brendon_Wong 7 Apr 2022 18:49 UTC

  15 points

  0 ∶ 0

  on: Ideal gov­er­nance (for com­pa­nies, coun­tries and more)

  I’ve been interested in the area of improving governance for a long time! On a societal level, there are some organizations and efforts in the space like One Project and RadicalXChange. Unfortunately I’m not aware of research that evaluates the efficacy of various governance models. I’ve been thinking about doing that for quite a few years. Doing that research is a high priority on Roote’s backlog. We haven’t tried getting funding for it yet, but it is somewhat related to our funded Civic Abundance and Web3 & Society initiatives. For example, for Web3 & Society, given the proliferation of alternative governance methods in Web3 as well as the transparent nature of decisions and performance results with DAOs, we can directly assess the efficacy of various DAO governance models.

  What links here?

  • Brendon_Wong's comment on Bren­don_Wong’s Quick takes by Brendon_Wong (29 Aug 2022 10:21 UTC; 1 point)

• Brendon_Wong 27 Jan 2019 7:29 UTC

  15 points

  0 ∶ 0

  in reply to: MichaelPlant’s comment on: If slow-take­off AGI is some­what likely, don’t give now

  My interpretation of Premise 4 (“Being an investor in such companies will generate outsized returns on the road to slow-takeoff AGI”) is that Milan is asserting a company that develops advanced AI capabilities in the future will likely generate higher returns than the stock market after it has developed these capabilities. This does not seem like a controversial claim since it is analogous to the stocks of biotech companies skyrocketing after good news is announced like regulatory approval to launch a drug. The market may have priced the probability of a company leading a slow AI takeoff in the next X years, but having that actually happen is an entirely different story.

  The concept of investing in something that generates a lot of capital if something “bad” happens like investing in AI stocks with the goal of having a lot more capital to deploy if a suboptimal/​dangerous AI takeoff occurs is known as “mission hedging.” EAs have covered this topic, for example Hauke’s 2018 article A generalized strategy of ‘mission hedging’: investing in ‘evil’ to do more good. Mission hedging is currently a recommended research topic on Effective Thesis.

  I think the more important question, which Richard brought up, is whether having X times more cash after a suboptimal/​dangerous AI takeoff begins is better than simply donating the money now in an attempt to avert bad outcomes. EAs will have different answers to this question depending on their model of how they can deploy funds now and in the future to impact the world.

  The title of the article (“If slow-takeoff AGI is somewhat likely, don’t give now” at the time of writing) implies giving now is bad because mission hedging all of that money for the purpose of donating later will lead to better outcomes. I believe the article should be modified to indicate that EAs should evaluate employing mission hedging for part or all of their intended donations rather than suggest that putting all intended donations towards mission hedging and ceasing to donate now is an obviously better option. After all, a hedge is commonly known as a protective measure against certain outcomes, not the sole strategy at work.

• Brendon_Wong 21 Mar 2019 20:08 UTC

  14 points

  0 ∶ 0

  in reply to: Jan_Kulveit’s comment on: EA Pro­jects eval­u­a­tion platform

  We had some discussion with Brendon, and I think his opinion can be rounded to “there are almost no bad projects, so to worry about them is premature”. I disagree with that.

  I do not think your interpretation of my opinion on bad projects in EA is aligned with what I actually believe. In fact, I actually stated my opinion in writing in a response to you two days ago which seems to deviate highly from your interpretation of my opinion.

  I never said that there are “almost no bad projects.” I specifically said I don’t think that “many immediately obvious negative EV projects exist.” My main point was that my observations of EA projects in the entire EA space over the last five years do not line up with a lot of clearly harmful projects floating around. This does not preclude the possibility of large numbers of non-obviously bad projects existing, or small numbers of obviously bad projects existing.

  I also never stated anything remotely similar to “to worry about [bad projects] is premature.” In fact, my comment said that the EA Angel Group helps prevent the “risk of one funder making a mistake and not seeking additional evaluations from others before funding something” because there is “an initial staff review of projects followed by funders sharing their evaluations of projects with each other to eliminate the possibility of one funder funding something while not being aware of the opinion of other funders.”

  I believe that being attentive to the risks of projects is important, and I also stated in my comment that risk awareness could be of even higher importance when it comes to projects that seek to impact x-risks/​the long-term future, which I believe is your perspective as well.

  Also, given the Brendon’s angel group is working, evaluating and funding projects since October, I would be curious what projects were funded, what was the total amount of funding allocated, how many applications they got.

  Milan asked this question and I answered it.

  Based on what I know I’m unconvinced that Brendon or BERI should have some outsized influence how evaluations should be done; part of the point of the platform would be to serve broader community.

  I’m not entirely sure what your reasons are for having this opinion, or what you even mean. I am also not exactly sure what you define as an “evaluation.” I am interpreting evaluations to mean all of the assessments of projects happening in the EA community from funders or somewhat structured groups designed to do evaluations.

  I can’t speak for BERI, but I currently have no influence on how evaluations should be done, and I also currently have no interest in influencing how evaluations should be done. My view on evaluations seems to align with Oliver Habryka’s view that “in practice I think people will have models that will output a net-positive impact or a net-negative impact, depending on certain facts that they have uncertainty about, and understanding those cruxes and uncertainties is the key thing in understanding whether a project will be worth working on.” I too believe this is how things work in practice, and evaluation processes seem to involve one or more people, ideally with diverse views and backgrounds, evaluate a project, sometimes with a more formalized evaluation framework taking certain factors into account. Then, a decision is made, and the process repeats at various funding entities. Perhaps this could be optimized by having argument maps or a process that involves more clearly laying out assumptions and assigning mathematical weights to them, but I currently have no plans to try to go to EA funders and suggest they all follow the same evaluation protocol. Highly successful for-profit VCs employ a variety of evaluation models and have not converged on a single evaluation method. This suggests that perhaps evaluators in EA should use different evaluation protocols since different protocols might be more or less effective with certain cause areas, circumstances, types of projects, etc.

• Brendon_Wong 19 Mar 2019 7:33 UTC

  14 points

  0 ∶ 0

  in reply to: Jan_Kulveit’s comment on: Con­cept: EA Donor List. To en­able EAs that are start­ing new pro­jects to find seed donors, es­pe­cially for peo­ple that aren’t well connected

  I’d like to point out for the benefit of other forum readers that EAs have different views on the average expected value of projects, variance in expected value of projects, and prevalence and severity of negative expected value projects. Based on the applications that the EA Angel Group has received, as well as lengthy lists of projects that have existed or currently exist in the EA community, at present I do not think that many immediately obvious negative EV projects exist (it is possible that people come up with negative EV projects but then receive feedback on potential harms prior to the project’s existence becoming known to many people). I have seen a lot of projects that could potentially have a near-zero EV by failing to achieve their intended objectives or underperforming a top-rated EA charity, but people will often have highly varied opinions on a project’s EV.

  Jan has a focus on x-risk and the long-term future. A project seeking to directly impact x-risks by doing something like AI safety research has not yet applied to the EA Angel Group, and I have rarely or ever seen projects like that in EA project lists. It is possible that people behind projects like those are already aware of the risks of sharing information or do not see the need to either share the project’s existence with many people or apply for early-stage funding from funders that do not focus exclusively x-risk. It is possible that complex projects that are doing direct work to impact the long-term future can have a greater potential to create harm and should be reviewed more rigorously.

  In the case that most EA projects are EV positive and are in need of funding, then this article’s suggestion is likely net positive. Also, essentially all individual funders I’ve spoken with already consult other funders and experts if they see the need before making funding decisions. If this is the norm, which I think it is, this makes it much less likely that the unilateralist’s curse will happen in practice with regard to EA project funding.

  Most importantly, this article’s proposal will probably only have a marginal impact on project and funder discoverability. Historically, many resources have existed online to enable EAs and funders to discover projects, like the .impact Hackpad (which shut down when Hackpad was acquired), various lists of projects that have popped up on the EA forum and elsewhere on the internet, and the EA Work Club. Announcing that a project exists or is seeking funding is simply sharing information, and there doesn’t appear to be any easy way to prevent people from sharing information if they want to.

  Therefore, I do not think it is fair to label this proposal a “bad idea.” Implementing the article’s proposal only makes it marginally easier for funders to learn about things than existing methods like someone posting a project idea directly on the EA Forum and even seeking funding, as has been done many times in the past. Someone who is motivated enough about seeking funding can simply speak with a lot of EAs they encounter and ask for funding, sidestepping this article’s list of funders.

  Nevertheless, there still may be a risk of one funder making a mistake and not seeking additional evaluations from others before funding something. That is why I created the EA Angel Group, which has an initial staff review of projects followed by funders sharing their evaluations of projects with each other to eliminate the possibility of one funder funding something while not being aware of the opinion of other funders. For optimal safety, a setup like the EA Angel Group is safer than publicly posting everyone’s contact information online and seems to achieve the same overall objectives as this article’s proposal.

  What links here?

  • Brendon_Wong's comment on Re­quest for com­ments: EA Pro­jects eval­u­a­tion platform by Jan_Kulveit (21 Mar 2019 20:08 UTC; 14 points)
  • Brendon_Wong's comment on EA An­gel Group: Ap­pli­ca­tions Open for Per­sonal/​Pro­ject Funding by Brendon_Wong (21 Mar 2019 3:07 UTC; 9 points)

• Brendon_Wong 17 Mar 2019 11:43 UTC

  13 points

  0 ∶ 0

  in reply to: Ward’s comment on: EA is vet­ting-constrained

  To provide more information on the status of the EA Angel Group, Benjamin Pence and I are working together on the EA Angel Group (and its parent project Altruism.vc). The EA Angel Group is operating, although it received a lower than expected number of referrals from angels within the group which has significantly reduced the benefit that the group currently provides to its members.

  I anticipated this concern months ago and tried to resolve the issue, but was delayed by ~5 months in our attempt to discuss sharing grant proposals with EA Grants. I felt like sharing grant proposals would be more efficient than launching our own “competing” grant application. I think a common app with rolling submissions is a much more sensible idea than having many separate applications that all do not share the applications they receive with other funders. To my understanding EA Grants currently doesn’t have an opinion on whether sharing grant applications with other funders is a good idea or not, and it is unclear when they will develop an opinion on this topic.

  One objection to sharing grant applications among funders is that a funder would fund all of the grant proposals they felt were good and classify all other grant proposals as not suitable to be funded. From the funder’s perspective, sharing the unfunded grant proposals would be bad since other organizations could subsequently fund them, and the funder classified those grant proposals as not worth funding. I personally disagree with this objection because the argument assumes that a funder has developed a grant evaluation process that can actually identify successful projects with a high degree of accuracy. Since the norm in the for-profit world involves large and successful venture capital firms with lots of experienced domain experts regularly passing on opportunities that later become multibillion-dollar companies, I find it unlikely that any EA funding organization will develop a grant evaluation process that is so good it justifies hiding some or all unfunded applications.

  Around the time I became more concerned that application sharing with EA Grants would be indefinitely delayed, I began to think an EA Project Platform would be a really great way to share not only grant opportunities but also other project-related opportunities like volunteering opportunities with the community. After building a prototype and seeking feedback, much of it positive, one EA decided to try to unilaterally block our platform from launching for reasons like wanting a central organization like CEA to back such a platform rather than a newer team like Ben and I. I personally disagreed with their reasoning, since it does not appear like a major organization has indicated any substantial interest in launching such a platform in the near future, and the launch of such a platform does not preclude the possibility of CEA or some other organization having a key role in the platform in the future. Not wanting to upset this person I decided to pause work on the EA Project Platform.

  Ben and I are currently evaluating whether or not we want to work on a common app for funders or defer that plan and launch our own separate grant application.

  Since our project to improve the EA project space is itself an EA project, our project also has the same capacity and funding constraints as other EA projects. If anyone would like to collaborate with us or provide some funding, please let me know!

  What links here?

  • Brendon_Wong's comment on EA An­gel Group: Ap­pli­ca­tions Open for Per­sonal/​Pro­ject Funding by Brendon_Wong (21 Mar 2019 3:07 UTC; 9 points)
  • Brendon_Wong's comment on EA An­gel Group: Ap­pli­ca­tions Open for Per­sonal/​Pro­ject Funding by Brendon_Wong (21 Mar 2019 19:19 UTC; 6 points)
  • Brendon_Wong's comment on EA An­gel Group: Ap­pli­ca­tions Open for Per­sonal/​Pro­ject Funding by Brendon_Wong (22 Mar 2019 7:04 UTC; 2 points)
  • Brendon_Wong's comment on EA An­gel Group: Ap­pli­ca­tions Open for Per­sonal/​Pro­ject Funding by Brendon_Wong (22 Mar 2019 7:23 UTC; 1 point)

• Brendon_Wong 21 Mar 2019 19:51 UTC

  11 points

  0 ∶ 0

  in reply to: Milan_Griffes’s comment on: EA An­gel Group: Ap­pli­ca­tions Open for Per­sonal/​Pro­ject Funding

  That is correct! The EA Angel Group is designed to help individual funders who are already making grants with discovering more opportunities and hearing from other funders about possible benefits and risks of individual funding opportunities. Many people in the angel group have been heavily involved with the EA community for many years and have a history of making successful grants. Analogous to a for-profit angel group, we do not force angels to do everything through our group, we just seek to add value in terms of helping people fund better opportunities through improving opportunity discovery, evaluation, and funding processes.

  We have several layers of checks to help reduce risks and improve grant decision making including initial staff review of incoming applications, angels sharing their evaluations with one another and talking with external contacts/​experts if appropriate, and hearing opinions of external grantmakers on grant applications we have received (we still need to talk with grantmakers to set this up).

• Brendon_Wong 22 Dec 2022 15:39 UTC

  10 points

  1 ∶ 0

  in reply to: Arepo’s comment on: Bad Omens in cur­rent EA Governance

  Speaking for the US:

  My understanding is that books and payroll/​finance can in fact be outsourced, and this is common practice. In the US, there are charitable accounting services (like Jitasa) that do all books and file most/​all required financial filings for charities (this still requires some work on the charity’s end). There are PEOs (like JustWorks and Insperity) that in some cases run all of HR (and are legally responsible for it). To my understanding PEOs can be used with charitable organizations.

  I think there may be some efficiency gains from centralization, like covering fixed costs (such as ~$10,000/​year to pay a legal firm to register to fundraise in all US states) but they’re small or insignificant when you reach a multimillion-dollar scale. I’d imagine the all-in gains in avoiding fixed costs to be in the low tens of thousands of dollars.

  At a larger scale, becoming independent could even be a cost savings! Administering lots of tiny projects can be operationally burdensome for a fiscal sponsor. There are also benefits of being independent, like being able to use your own operational processes, having a separate legal existence, etc.

  That’s why fiscal sponsorship services , e.g. what’s provided by EV and RP, are usually offered to small/​burgeoning or temporary projects in the broader charitable world, rather than being used by massive organizations. Accumulated funds at a fiscal sponsor can be easily donated to the new entity, although the later the spin out, the larger the operational complexity I’d imagine.

  These days, setting up a company or charity is as easy as filling out a website, no formal legal firm required if it’s pretty standard. Stripe Atlas and Clerky are popular for for-profit startups, and Resilia is one such service for nonprofits.

• Brendon_Wong 29 Dec 2020 19:38 UTC

  10 points

  0 ∶ 0

  in reply to: Robert_Wiblin’s comment on: How You Can Coun­ter­fac­tu­ally Send Millions of Dol­lars to EA Charities

  Thanks for your thoughtful reply Rob!

  “The 2.16% U.S. federal funds rate in 2019 is one of the most conservative interest rates possible.”

  The U.S. Federal Funds rate has been effectively 0% since April 2020 and was roughly 0% for six years from 2009 to 2015. The same is roughly true of the UK. Central banks in both countries are saying they’ll keep rates low for years to come.

  I can’t immediately find a reputable business savings accounts in the UK/​US that currently offers more than 1%.

  To quote my reply to GMcGowan, “We used the latest Form 990 data from 2018 and 2019 and the associated interest rates from those years to calculate the prior-year opportunity costs as accurately as possible, which is a separate calculation than estimating the forward-looking counterfactual impact.” In other words, the 2.16% is meant to be a conservative rate of interest a charity could earn by holding cash in a respectable savings account in 2019 rather than a forward-looking projection.

  The federal funds rate is a good rate to use for historical analysis because we have very granular data for what it is in the past, whereas to get savings accounts yields themselves, we might need to use a third-party service or design a benchmark ourselves. Given the current situation with the federal funds rate, it would make sense for us to find a better proxy for good savings accounts yields in 2020 so that we can better estimate the opportunity cost for 2020 once the 2020 Form 990s come out as well as use the rate as a point of reference for current and future expected earnings.

  I think the recommendation in this article is timeless, so the specific numbers don’t matter that much. In fact, if the interest rates are lower, organizations are even less likely to do this, so the counterfactual impact decreases along the lines of expected interest increase but increases with the timeframe of impact before the organization would have otherwise implemented these changes.

  In the “estimating counterfactual impact” section of this article, I use a 1% average improvement over the next five years to estimate GiveWell’s opportunity cost over the next five years rather than, say, 2.16%. Right now, the rates are below 1% as you say. I see savings account options around the 0.5% and 0.6% range in both the US and the UK, although they’ve been higher earlier this year even after COVID-19.

  You mention challenges with opening and managing bank accounts like:

  “I can’t immediately find a reputable business savings accounts in the UK/​US that currently offers more than 1%”

  “These accounts usually offer a high rate to attract customers for a while, then dramatically reduce the interest rate”

  “Opening bank accounts for non-profits, at least in the UK, is a pain.”

  “It looks like you usually won’t be able to put in more than a million dollars/​pounds in any given account, often less.”

  “keep track of them, secure the chequebooks, have them audited annually, integrate them into your bookkeeping system, change the signatures when staff turn over, figure out the idiosyncratic requirements to pull out money when you need to”

  I have three responses. First, given the magnitude of the opportunity costs involved, most organizations with significant cash holdings should do this since the benefit is greater than the operational complexity (maybe a higher cash threshold for organizations wanting to hold money in UK banks). All organizations mentioned in the table have cash holdings of over $1,000,000.

  Second, I think you’ve articulated some great reasons why Antigravity Investments should exist! On the surface, it might appear challenging to solve this problem, so having one person or organization figure this out and make the recommendation to multiple organizations and help with implementation as needed seems like a much more efficient model compared to having operations/​finance team members at each organization relying on their preconceived notions to evaluate the benefits of this, plus needing to figure out the implementation component all by themselves.

  Third, because Antigravity Investments exists, the EA community is now aware that there are institutional cash management solutions that overcome the challenges you mentioned. While it’s better to directly contact Antigravity Investments for our latest recommendations, I wrote a DIY guide to institutional cash management in my 2019 EA Forum article (which is the solution to the opportunity cost problem mentioned in this forum post, although slightly outdated).

  I’ve mostly been focusing on the United States and business savings accounts seem easier to open here. However, it so happens that I have done some preliminary exploration for the UK where you seem to have more experience with dealing with bank accounts. I’ll mention several solutions, which address all of the concerns you mentioned.

  In my original article, I mention a service called StoneCastle: “Our recommended solution is StoneCastle’s AAA-rated Federally Insured Cash Account (FICA). FICA works by continually analyzing yields at hundreds of U.S. banks and automatically storing cash at each high-yield bank up to the $250,000 FDIC insurance limit.” Basically, you open one account, and that one account automatically optimizes the yield across hundreds of banks. The application is a very short PDF that can be filled out and submitted quickly and completely digitally. StoneCastle is open to international clients that want to store funds in USD.

  As I mention in a comment on my 2019 article, “We’re in the process of investigating options in the UK. Right now, Flagstone looks very promising, particularly for charities and large account sizes.”

  Flagstone is a somewhat similar service to StoneCastle but for UK cash deposits. It allows charities to open a single account and gain access to the best rates across (as of the time of writing) 45 partner banks. Unlike StoneCastle, money isn’t moved automatically, but it can be moved at the click of a button. Flagstone appears to overcome the discovering reputable banks problem, the interest rate teaser problem, the switching bank accounts to get the highest yield problem, the account maximum balance problem, and the complexities of managing multiple accounts problem that you mentioned.

  As mentioned in my original article and briefly in this article, storing money in ultra-short-term bonds or other investments is another good approach. Then, there’s only a single brokerage account, and no bank-related complexity. Options like ultra-short-term bonds are safe relative to other investment options and also have a higher expected yield than savings accounts. Organizations can manage a brokerage account with a DIY approach, which could be as simple as making a couple-minute trade in a brokerage account every few months, or have an external service (like us) handle that.

• Brendon_Wong 5 Apr 2022 20:37 UTC

  9 points

  0 ∶ 0

  on: Is­sues with cen­tral­ised grantmaking

  I agree with the issues related to centralized grantmaking flagged by this article! I wrote a bit about this back in 2018. To my understanding, EA has not been trying forms of decentralized/​collective thinking, including decentralized grantmaking. I think that this is definitely a very promising area of inquiry worthy of further research and experimentation.

  One example of the blind spots and differences in theories of change you mention is reflected in the results of the Future Fund’s Project Ideas Competition. Highly upvoted ideas like “Investment strategies for longtermist funders” and “Highly effective enhancement of productivity, health, and wellbeing for people in high-impact roles,” which came in at #3 and #4 respectively, did not win any awards or mention. This suggests that there is decent community interest and consensus around projects and project areas that aren’t being funded or funded sufficiently by centralized entities. For those project areas, there are a decent number of people within EA , project leads, and smaller-scale funders (BERI, EA Funds, various HNWIs) that I am aware of that either believe such efforts are valuable and underfunded or have funded projects in those areas in the past. The specific grantmaking team at The Future Fund may have interests and theories of change that aren’t the same as other grantmaking teams and EAs. It’s definitely fine to have specialized interests and theories of change, and indeed everyone does, but the issue is only one set of those is coming through to decide how to allocate all of the Future Fund’s funding. As you point out, that’s basically guaranteed to be suboptimal.

• Brendon_Wong 26 Jun 2020 22:10 UTC

  9 points

  0 ∶ 0

  in reply to: jkmh’s comment on: EA is risk-constrained

  I think this could be set up by launching a 501(c)(3) as a donor-advised fund and fiscal sponsor and then setting up funds inside the entity that support specific purposes. For example, having a fund that pays UBI for people working on high-impact entrepreneurship.

  I welcome anyone to get in touch with me if they’re interested in collaborating on and/​or funding such a proposal (estimated setup cost of the entity and necessary legal work: $15,000–$25,000).

  Edit: Was inspired to write an EA Forum post on this!