If you were advising someone five years behind you, but on a somewhat similar track (a MBA type leaving a senior role at a mission-driven organization to become an independent consultant), what would your top pieces of advice be re:
transitioning into consulting from a more-stable organization
structuring outreach to and refining proposals with prospective clients
(and) managing the peaks and valleys of client work?
Thank you!
Thank you for sharing! I hadn’t looked deeply into RISC’s work before — and very helpful to know about Levitt’s ties to Schmidt Futures.
I should have known that at the price of a small premium I could have insured myself against a lot of negative and annoying things in life. Most people have insurance for their health care, liability insurance, and insurance for their car. But you can basically ensure yourself against everything such as the inability to work or your belongings. So to prevent the hassle of bad events and time wasted dealing with them, I plan to insure myself for more negative outcomes in the future.
I also tend to invest more rather than less in insurance. This includes legal insurance, etc. Exceptions include travel insurance, supplemental life insurance, and cell phone insurance — where the hassle of submitting an Asurion claim, combined with the deductible, left me more willing to bear future full replacement costs. Until recently I also had an unwise habit of choosing PPO rather than more-minimalist HDHP health insurance plans. I switched when I better understood how U.S. tax laws make the HDHP/HSA combination attractive for relatively healthy people in their 20s and 30s.
That said, I do think this EA-leaning personal finance writer is onto something with his minimalist approach to insurance. Even if I’m far from his school of thought in personal practice, as he wrote in 2011′s Insurance: A Tax on People Who Are Bad At Math?, self-insuring in many categories beyond travel, life, etc., likely makes sense for more people than currently practice self-insuring:
Get almost [no insurance]. Especially if you already have a healthy stash of savings built up and could thus afford any unexpected expenses...
Then for the insurance lines that you are keeping, do a nice afternoon of shopping around – I did this last January and sliced about $300 per year off of my remaining home and car insurance...
Then put all the savings from these premiums into growing your nest egg, realizing that you are now getting paid to be your own insurance company.
It sounds risky if you let the fear creep in. But it should actually feel deeply satisfying and safe. By not buying into a product where the odds are stacked against you, you are STATISTICALLY likely to win. We can’t predict the future, but we do have one tool that lets us turn the unknown to our advantage, and that is statistics....
Over the past 10 years, I’ve saved about $40,000 in insurance premiums compared to the average level of spending, and now that $40K is sitting alongside my other employees, producing $2,800 of passive income each year, and already more than big enough to cover replacing a crashed car or paying any possible deductibles on medical bills.
And after 10 years of relatively exciting living, I haven’t even had to dip into it once. Now I see why insurance companies make so much money!
Personal preference is important here as I’d rather forego other “luxuries” to overpay a few hundred dollars a year for certain categories of peace of mind, but I’ve appreciated learning the minimalist perspective and adopting small parts of it in recent years.
Thanks for a thoughtful post!
Agreed. The University of Chicago — with its Becker Friedman Institute, Center for Decision Research, broad EA community, and generous economics funders — could be a promising option.
You might not have to identify them in advance, rather than 10+ years into their post-doctoral career. Googling “mid-career grant history” leads to a few links like these — where charitable or governmental foundations provide support to experienced scholars.
The American Historical Association promoted the same grant here. One could imagine a similar grant (perhaps hosted at FHI, Princeton, or another EA-experienced university [or at Rethink Priorities]) where “architectural history,” “preservation-related,” and other italicized words below are replaced with EA-aligned project parameters that FHI and its donors would hope to support.
FITCH MID-CAREER FELLOWSHIP: Research grants of up to $15,000 will be awarded to one or more mid-career professionals with academic backgrounds, professional experience, and an established identity in one or more of the following fields… [truncated] architectural history and the decorative arts. The James Marston Fitch Charitable Foundation will consider proposals for the research and/or the execution of the preservation-related projects in any of these fields.
One could also structure fewer grants at a higher price point than $15K (say, $50K) to fund more ambitious projects that may absorb 6-9 months of a scholar’s time — rather than 2-3 months. As star scholars are identified, their funding could be renewed for multiple years. (Open Phil has certainly followed that model for rising stars and their high-potential projects. See their extension of Jade’s grant funding here.)
Regarding this valuable excerpt:
Working part-time might be more profitable than one might intuitively think. This is due to two factors: the first is that, at least in Israel, the income tax is progressive, making the marginal earning smaller; the second is that in some circumstances a freelancer or a consultant can earn even more per hour than a full-time employee.
Others thinking about this very sensible path of “part-time EtG” might scan a book like this one. The author (a long-term independent consultant who also helps part- and full-time expert contractors set up their practices) validates your approach from a slightly different angle. In a section that reads Make Certain You Charge Enough, Katcher writes that many new consultants think it is better to have a low-paying client than no client at all, which he describes as a “mistaken belief.” He advocates for protecting a consultant’s personal time and perceived value in the marketplace.
Potential part-time EtG practitioners might think about the demand for their time as a labor supply-demand curve in miniature. Given consulting clients 1, 2, and 3 below, someone looking at EtG might decline to serve client 3 in order to free up those 15 hours of workday support a week for self-study, formal study, or other rewarding independent projects (exercise, cooking, writing, etc.):
Client that requires ~15 hours a week of support and is willing to pay $150 (or €150/£150/etc.) an hour, with limited career capital benefits for the consultant
Client that requires ~10 hours a week of support and is willing to pay $75 (or €75/£75/etc. ) an hour, with significant career capital benefits for the consultant
Client that requires ~15 hours a week of support and is willing to pay $75 (or €75/£75/etc. ) an hour, with limited career capital benefits for the consultant
Declining client 3 can also provide the part-time EtG contractor more workday time to identify and pitch to prospective clients who are even more profitable or desirable from a career capital perspective than clients 1 and 2. (Of course, individuals might want to mentally reorder those in terms of price points, hours, etc., if helpful to think ex ante about the shadow price of one’s time and what categories of career capital one might value.) Thanks for this thoughtful write-up, and best wishes for your new PhD studies and set of projects!
Agreed. I appreciate this post and responses alike, but think there are many examples of:
Brilliant mathematics/CS graduates who might earn $1M+ in finance, but of which there is an undersupply in direct work
Brilliant PhDs in history or other fields whose private-sector alternatives are rarely >$90K/year, and of which there is also an undersupply in direct work
I expect there are several cases a year where the world would be better off if an individual in category 1 would EtG and fund direct work of 5-10 individuals in category 2, than if the individual in bullet 1 were to choose direct work instead. Not that those in category 1 should mostly EtG rather than do direct work, but I’d be more bullish on the EtG path in some cases than Mark is given the huge labor supply in category 2.
A sad example of the glut of brilliant history PhDs is the challenging labor market and career that Thea Hunter confronted, despite her extraordinary reputation/abilities according to Foner and others. Her painful trajectory is a sign that there is real slack in the “brilliant historian” market. I expect some rising star historians could be induced to work on EA-relevant problems via grants from those whose academic backgrounds offer greater potential to EtG than history or political science PhDs do.
“She had this ability to be extemporaneous and brilliant,” he said. Eric Foner, a renowned American historian and Thea’s adviser, noticed this too...Her work provided a new way of thinking about America’s past. And she had an ambition: to use an Atlantic understanding of history, of liberty, of freedom, to better grasp the present. It’s one thing to call for a new perspective on history, Foner says; it’s a completely different thing to be one of the “pioneering young scholars” to develop it.
Thank you for cross-posting. Very valuable to have at hand, especially to share with people new to EA who may gravitate toward the strawman argument.
Per Michael’s suggestion here, here are links to several free and reputable:
Management talks and training resources
Operations training resources
Online courses in accounting, finance, asset valuation, and investment philosophy (perhaps valuable to operations staff or aspiring impact investors) from NYU Stern’s Aswath Damodaran at his personal faculty page here
For those interested in more-generic professional skills along with EA content/skills courses.
Like that proposal, and will include some links to good management talks/courses in response to Edo’s question!
Thanks, Ekaterina! I shared a bit more about my “leadership on climate issues” description (which is, of course, relative to my North American context) above in response to Sebastian — and would reiterate my appreciation of your thoughtful initial post and for this additional context.
(I should clarify my informal statement about “leadership on climate issues.” Without getting into CDU/CSU vs. SPD vs. Bündnis 90/ Die Grünen, et al [or Macron vs. Merkel] debates, many climate advocates from the U.S. and the U.K. give:
— Germany credit for its efforts in making renewables widespread and affordable, both in Europe and beyond
— Merkel credit for her pressure on climate skeptics within the EU and elsewhere, which led many to consider her the de facto “leader of the free world” in 2017-2021
Again this is one North American’s perspective on dynamics in Berlin and Brussels that may be a skewed perception of reality, but wanted to share the reasoning behind the comment!)
Thanks for also giving me the impetus to check out effektiv-spenden.org, and the Die besten Organisationen im Bereich Klimaschutz! section, for the first time.
Thank you for a valuable and learning-dense post! The What led us to forgo the original start-up approach? section, and your rationale for supporting local groups, were especially interesting.
Given Germany’s leadership on climate issues, have you found the growth in Effective Environmentalism resources (including climate research by Giving Green and the Founder’s Pledge team) to be assets in growing the German EA community? It seems John Halstead’s and Johannes Ackva’s thoughtful work might be a recruitment asset in the future. Good luck in 2021 and beyond!
+1, that “doing the leg work to work out which courses in some important arena is best” sounds like a great path! Perhaps you could supplement reputable educational content online with a systematized mentorship program or discussion group? This also rings true:
it’s hard to know in advance what you’ll need to know, and it’s hard to motivate yourself to do things in a self-directed way without a deadline.
To improve the odds people find strong-match topics that they’re motivated to learn, one might offer a “tasting menu” of intro materials for people interested in gaining skills, but uncertain which skills they will be motivated to learn via a paid course. For example, including 2-3 accessible academic interviews on YouTube or readings for those interested in:
Management: these ’11 and ’13 book talks by Harvard’s Kaplan, and this recent interview with Harvard’s Frei, are approachable starting points. The Management Center serves dynamic non-profits and other mission-driven organizations, and offers resources (including sample staff communications, etc.) others might want to review to see if these are skills they want to double down on via a more-extensive case
[Other topics (e.g., budgeting for non-profits or modeling uncertainty via Monte Carlo simulations), to increase the chance a certain topic is especially resonant to a rising leader at a given point in time]
One organization that diligently pressures U.S. presidential candidates to commit to greater foreign aid investments — with a focus on Iowa, N.H., and other key early presidential primary and caucus states — is Bono’s ONE Campaign. Here are two backup links showing their work in:
2015 organizing for the 2016 U.S. presidential cycle
2019 organizing for the 2020 U.S. presidential cycle
If interesting as a case study / food for thought. The 2019 article begins:
Foreign aid is often used more in political campaigns as a punching bag than as an applause line, but more Iowans may be pressing their candidates and elected officials on the subject if the ONE campaign is successful here.
ONE, a non-partisan advocacy organization co-founded by Bono, works to end extreme poverty and preventable diseases, particularly in Africa. They’re currently running a grassroots campaign in Iowa to get voters to contact their senators and urge them to support the Global Fund and to maintain America’s leadership in the global AIDS fight.
They have volunteers in Des Moines, Iowa City and Waverly, and are in the process of launching chapters at Drake University and Iowa State University. ONE will be present at the 80⁄35 music festival, as well as the Drake Global Health Consortium to connect and build a larger network of volunteers to reach out to senators.
“Over 700 million people are still living on less than $1.90 a day, over half of them in sub-Saharan Africa. This is an injustice with far-reaching consequences,” Sean Simons, press secretary for the ONE campaign, told Starting Line.
Thanks so much for the kind feedback, Aaron! Here’s one involving a cataloguer at a library in the “unexpectedly significant financial impact from a person with average income, in a U.S. context, category” — in case anyone finds it interesting: Librarian Quietly Saved $4 Million, Left It to School Where He Worked. Some might see it as a cautionary tale, since Morin’s alma mater was then criticized for spending $1M on a video scoreboard for its college football team. Of course I think many of us would’ve wished he’d encountered EA and saved >1,000 lives in expectation from the gift (by offering it to AMF or an EA charity of your choice) instead.
A brief synopsis of his humble life and outsized impact comes from this CNBC report:
New Hampshire resident and librarian Robert Morin led a simple life.
He lived alone, drove a 1992 Plymouth and never went out.
“He would have some Fritos and a Coke for breakfast, a quick cheese sandwich at the library, and at home would have a frozen dinner because the only thing he had to work with was a microwave,” Morin’s longtime financial advisor Edward Mullen told the Boston Globe.
You wouldn’t know it from his lifestyle, but Morin — who graduated from the University of New Hampshire before working in the school’s library for nearly 50 years — was a multimillionaire. In fact, very few people did know, until he died in March 2015 at age 77 and bequeathed his entire $4 million fortune to his alma mater.
It was a complete “surprise to the university community,” Erika Mantz, director of media relations at UNH, told CNBC. ”People were honored and excited to learn of his generous bequest.”
This is a very good point:
Many EAs are fairly intellectual, and as such may feel like they’re missing out on something by working in operations roles. Although these positions are often challenging, they tend not to be academically or intellectually stimulating in the same way as school or university.
As an undergrad liberal arts major, it was only in the last 2.5 years that I grew to love the intellectual depth (and fun) of operations research/ops-oriented economic analysis, and project management practices and courses. To pick two examples addressing food insecurity, there’s this work by an economist and this work by operations research faculty. It could be worth pulling together an informal Google Doc syllabus — akin to AI safety syllabi like this — including resources from:
INFORMS case studies
INSEAD, MIT Sloan Ops Mgmt, and Princeton ORFE papers and primers (among others)
PMI’s PMBOK® and other, free materials
A more-digestible entry point is The Everything Store on Amazon, which highlights how Bezos recruited a number of ORFE and Sloan alumni to make logistics and operations AMZN’s core competency. See notable alumni here, this Jeff Wilke video, and this excerpt from the book for an example of the heated operational debates within Amazon during its first decade, which could be good food for thought for distributed EA organizations.
At a management offsite in the late 1990s, a team of well-intentioned junior executives stood up before the company’s top brass and gave a presentation on a problem indigenous to all large organizations: the difficulty of coordinating far-flung divisions.
The junior executives recommended a variety of different techniques to foster cross-group dialogue and afterward seemed proud of their own ingenuity. Then Jeff Bezos, his face red and the blood vessel in his forehead pulsing, spoke up. “I understand what you’re saying, but you are completely wrong, ” he said.
“Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. We should be trying to figure out a way for teams to communicate less with each other, not more.”
...At that meeting and in public speeches afterward, Bezos vowed to run Amazon with an emphasis on decentralization and independent decision-making.
“A hierarchy isn’t responsive enough to change, ” he said. “I’m still trying to get people to do occasionally what I ask. And if I was successful, maybe we wouldn’t have the right kind of company.”
Bezos’s counterintuitive point was that coordination among employees wasted time, and that the people closest to problems were usually in the best position to solve them. That would come to represent something akin to the conventional wisdom in the high-tech industry over the next decade.
The companies that embraced this philosophy, like Google, Amazon, and, later, Facebook, were in part drawing lessons from theories about lean and agile software development. In the seminal high-tech book The Mythical Man-Month, IBM veteran and computer science professor Frederick Brooks argued that adding manpower to complex software projects actually delayed progress.
One reason was that the time and money spent on communication increased in proportion to the number of people on a project.
He passed away four years ago this month — within a day of Derek Parfit — but I think John Berger’s writing and BBC documentaries could resonate with many in EA who might not have had a chance to come across Berger. Below are a few links in case others might find his work on migrant workers, gender inequality, and animal welfare thought-provoking.
1. Segment of his Ways of Seeing BBC program focused on inequality (starting at 22:00).
2. Excerpt from his New Yorker obituary:
...Hence one of the most striking aphorisms in “Brief as Photos”: “What we mourn for the dead is the loss of their hopes.”Hope, Berger proposed, is what we counterpoise to the essential revelation of history—that we’ll decline, that we’ll die. “To decide to engage oneself in History requires, even when the decision is a desperate one, hope,” he writes in “Bento’s Sketchbook,” one of his last volumes. Hope names a commitment to change the world, against the fact of finitude. It was hope, I think, that allowed Berger to write so beautifully about death without eliding the tragedy of it...
Berger always returned to the possibility of proximity, seeking to cross the distances that divide us. Throughout his work, every way of seeing starts with a look, and every look promises to become a touch—fumbling hands reaching across the void. The thought of death brings us back to the body, calling on us to act, with and for one another.
3. Excerpt from his New York Times obituary.
The year 1972 was Mr. Berger’s most prolific, with “Ways of Seeing” and the publication of his most critically acclaimed novel, “G.,” …which was awarded the Booker Prize. (Characteristically, Mr. Berger criticized the company that sponsored the prize, saying that it exploited Caribbean workers, and announced that he would split his winnings with the Black Panthers.)
In 1974, when his critical influence was probably at its height in Britain, he left London for Paris and then Geneva. He later decided to leave cities altogether, moving to a remote peasant community, Quincy, in the French Alps, where he lived with his wife, Beverly Bancroft, who died in 2013, and their son, Yves. (Besides his son, he is survived by another son, Jacob, and a daughter, Katya, from a previous marriage.)
In the Alps, where he learned to raise cattle, he wrote a trilogy of unconventional books called “Into Their Labors” — comminglings of short story, poetry and essay — examining the migration of peasants away from their traditions and into cities.
He also successfully dabbled in screenwriting, collaborating with the director Alain Tanner on three films, including the critically praised “Jonah Who Will Be 25 in the Year 2000” (1976) about a group of radical idealists trying to stay true to their principles.
Individuals in common (or “average”) roles can also make having an impact seem to be more accessible — and a more-compelling moral necessity — to others who have typical, or even outstanding, resources to make a difference.
For example, the Washington Post noted that this waiter’s and part-time teacher’s financial support of low-income students in Ghana inspired both his friends and wealthy members at the country club where he works to also donate. While bed nets or other investments may be higher value from an EA perspective, this is still an interesting case study of an average-income person (from a U.S. perspective) having impact well beyond his own professional work or ETG capacity:
To help supplement his teaching salary, Quarcoo was working part time as a waiter at Woodmont Country Club, an exclusive golf and tennis club where initial membership costs $80,000.
When some of the members learned about his efforts to help students in Ghana, they asked if they could chip in, said Quarcoo, who has worked at the country club since 1975. He also is a part-time substitute teacher in Montgomery County.
“I have never asked for donations, but people are generous and wanted to help,” he said. “A member would say, ‘Hey, Sam, next time you go to Ghana, let me know. I will try to help you.’ By word of mouth, it took off from there.”
Quarcoo’s humble nature and desire to help is contagious at the country club, said Adrienne Maman, a donor who met him about 35 years ago when he waited on her family’s table.
“His heart is right in front of you — you can see his soul when you meet him,” said Maman, 67, who lives in Chevy Chase, Md.
“Sam is a genuine person who just took it upon himself to help these schools,” she added. “Single-handedly, he worked on his own for many years until people slowly began to find out. He has never wanted anything for himself — everything he does is for the children of Ghana.”
Even though Quarcoo has been furloughed from waiting tables since March because of the coronavirus pandemic, club members still donated $19,000 to his efforts this year, he said. The funds were used to buy supplies for nearly 2,000 students.
Those interested in this path might enjoy interviews with Lauren Taylor Wolfe — and reading about the work of Québec’s pension plan, John Kerry and Mark Gallogly, and Mark Carney to drive more effective ESG investing and governance norms.