Thanks for the question!
Youâre right that we often cap our funding at a share of an organizationâs budget, and that this is a deliberate choice aimed at encouraging funding diversification and long-term sustainability. That said, if weâre funding an organization, even below its full budget, you can assume we believe they are above our bar at their full projected budget. We use their full projected expenses when estimating the giving multiplier, so a partial grant from us is not a signal that we think the marginal dollar is low-value.
We have a policy of not publishing our individual grantee assessments. However, weâve discussed specific grantees with interested donors many times and are always happy to do so. If you know people who are considering donating to effective giving organizations and would find it helpful to hear our perspective, please donât hesitate to connect them with us!
Thanks for this discussion. I appreciate the thoughtful engagement even though I havenât had the capacity to follow the full back-and-forth in detail. I wanted to offer a few points from the grantmaker perspective that might be useful.
On the marginal cost-effectiveness question: most of the effective giving organizations we fund are running very lean, and their costs are primarily staffing. So when we think about marginal funding, weâre often not thinking about abstract diminishing returns on a smooth curve, weâre thinking about specific roles and what theyâd unlock. For example, if an org is going from two to four FTE, the additional hires might be an ultra-high-net-worth advisor who opens up a whole new donor segment, or a marketing hire who can meaningfully expand reach. In cases like these, the marginal dollar can be highly cost-effective (sometimes more so than earlier spending) because itâs funding a function the org simply couldnât perform before.
We try to do this kind of holistic (and sometimes hire-by-hire) assessment where we can, though we canât do it for every grantee at every funding level.
One further point: the theoretical argument that orgs should already be spending on their highest-priority items first, so marginal funding should by definition go to lower-priority uses, doesnât always hold in practice. Lean orgs often underspend on things like marketing or growth capacity, not because those arenât high-value, but because theyâre harder to justify from scarce operating budgets, especially when the payoff is uncertain. Additional funding can unlock spending that should have been happening but wasnât.
On average vs. marginal assessment: as I mentioned above, we tend to rely on average cost-effectiveness in our evaluations. I recognize that might be a limitation. In practice, we represent a large share of many granteesâ funding, idealistically around 50%, but realistically 70â100% for many newer grantees. When weâre that dominant a funder, the distinction between average and marginal matters less. Where weâve been a significantly smaller share of an orgâs funding, we have done more explicit marginal analysis, and we expect to move further in that direction, particularly when we represent a smaller share or when a grantee is requesting a substantial increase in funding. We want to make sure the additional funding makes sense. That said, we believe most organizations in our portfolio are cost-effective enough and able to absorb more funding at this stage, and that filling a 10â50% gap is cost-effective enough that more granular marginal analysis hasnât been a top priority.
On why weâre not funding effective giving orgs even more: in many cases, we are increasing grant sizes for successful grantees, and part of our 2026 strategy is actively pushing high-performers to absorb more funding where we see opportunity. But our portfolio spans more than effective giving, we also want to grow in areas like effective careers, where organizations typically have fewer alternative funding sources than EG orgs, which can tap tipping functions and individual donors more readily. We also think of ourselves as providing sustained, long-term support. As we expand and take on more renewable grants, which naturally grow over time with inflation and organizational costs, an increasing share of our budget might go to renewals. Committing to be the sole or near-sole funder for most of these organizations would be irresponsible, both for our portfolio flexibility and for their long-term resilience.