How should large donors coordinate with small donors?
post by Wei_Dai
score: 53 (25 votes) ·
This is a question post.
I'm surprised at how little discussion there has been on the question of how large donors such as Good Ventures should coordinate with small individual donors, given the seemingly obvious high value of information in such an investigation. For example, Good Ventures currently has a "splitting" policy where they only fund 50% of a charity's room for funding in order to leave opportunities for small donors to do their part. But it seems fairly likely that either "splitting" is wrong, or 50% is not the optimal ratio. In one of the few places where this has apparently been discussed, Holden Karnofsky wrote [EA · GW] (in reply to Ben Hoffman):
if you take into account the difference in scale between Good Ventures and other GiveWell donors, Good Ventures’s ‘fair share’ seems more likely to be in excess of 80%, than a 50-50 split.
We expected individual giving to grow over time, and thought that it would grow less if we had a policy of fully funding top charities. Calculating “fair share” based on current giving alone, as opposed to giving capacity construed more broadly and over a longer-term, would have created the kinds of problematic incentives we wrote that we were worried about. 50% is within range of what I’d guess would be a long-term fair share.
It seems likely that individual giving will grow over time, but shouldn't we expect more large donors to join EA as well in the future? Are we sure 50% is more fair in the long run than 80%?
It does seem likely that individual giving would grow less if big donors fully funded top charities, but it also seems likely that individuals doing direct work in EA would grow more if big donors fully funded top charities. It seems far from obvious which effect is more important.
An advantage of big donors funding their top charities fully or at a higher ratio is that small donors would have more incentives to do more independent thinking and essentially act as "scouts" for the big donors to help look for more or better opportunities for effective giving, or to actively create new opportunities. Those who aren't inclined to do that and would rather follow the big donors could still contribute to the 20% share or donate to a fund controlled by the same program officers as the large donors. (ETA: In other words, the current policy makes it much harder than it perhaps should to start up and get funding for a new effective charity, because the top charities that OpenPhil / Good Ventures have identified but not fully funded are unnecessarily sucking up most of the donations from individual donors who might otherwise fund these riskier new opportunities.)
A downside of this (which has been previously mentioned) is that it might create too much of a dependency for the charity on the big donor. I think this can be mitigated if the big donor commits to giving early warning to any charity that it wants to defund, and/or to an extended drawdown schedule that leaves enough time for the charity to find other sources of funding. If the big donor is funding top charities at 80 or 100%, there could be a lot of small EA donors trying to find giving opportunities, who would jump in if that charity is really still cost-effective.
In summary, I'm not trying to argue conclusively for a particular alternative to Good Venture's current policy, but just pointing out that given what's at stake, there seems to be more than enough uncertainty here to merit a much more thorough investigation. (ETA: To be clear I don’t think that person should be me because my comparative advantage probably lies elsewhere.)
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comment by agdfoster
· score: 7 (3 votes) · EA
[idea]: Invite-only Google Sheet List of considerations relevant to funding a group (one group per tab) and then columns of donor's weights for those considerations. I would find this really interesting.
Deal could be that you only get access if you're willing to share your weights!
comment by JoshYou
· score: 6 (4 votes) · EA
Holden also wrote [EA · GW] (by the way, I think your link is broken):
We fully funded things we thought were much better than the "last dollar" (including certain top charities grants) but not things we thought were relatively close when they also posed coordination issues. For this case, fully funding top charities would have had pros and cons relative to splitting: we think the dollars we spent would've done slightly more good, but the dollars spent by others would've done less good (and we think we have a good sense of the counterfactual for most of those dollars). We guessed that the latter outweighed the former.
So an important crux here is the proportion of small-donor money to e.g. GiveWell charities that would be crowded out into much less effective charities or to new projects with high expected value. For reference, GiveWell has moved about $30-40 million a year in small donations. I am not sure what proportion of that comes from people who are not closely aligned/affiliated with the EA community, but I would guess it's the majority.
I would question whether Holden is correct though. Global health/development is a big space, so if Good Ventures increased funding to GiveWell top charities by a lot, GiveWell would still exist and would move their recommendations over to interventions that aren't fully funded yet. For example, cash transfers seemingly could absorb a lot of money, and the Gates Foundation probably moves more to global poverty causes every year than GoodVentures will spend per year at its peak. The claim seems to depend on small GiveWell donors being excited by GiveWell's specific top charities right now, such that they would not give to GiveWell top charities if the current top charities were fully funded and GiveWell issued new recommendations, and would instead give to charities even less effective than these new top charities. That might be true if donors are really motivated by the headline cost-per-life-saved number rather than being attracted by GiveWell's research and methodology. I don't have a very strong intuition either way, so I'd be curious if someone more knowledgeable could shed some light.
comment by Wei_Dai
· score: 1 (1 votes) · EA
by the way, I think your link is broken
Thanks, looks like that's actually caused by a bug in EA Forum. I'll do a workaround and notify the admins. And thanks for the Holden quote, which I'll reply to below:
but the dollars spent by others would’ve done less good (and we think we have a good sense of the counterfactual for most of those dollars).
A possible solution here is to let people donate to a fund controlled by OpenPhil or GiveWell, and then they can coordinate amongst themselves to maximize good done per dollar.
We guessed that the latter outweighed the former.
Given the huge amounts of money/value involved here, I think detailed analysis, empirical investigations, and creative solutions are called for, not just a guess.
(test link for the admins, please ignore [LW · GW])
comment by Davidmanheim
· score: 1 (1 votes) · EA
Wei - a few points in response:
1) There isn't really a lack of funds for new effective charities - there are a variety of grant programs, both those run by CEA and others, that will help such efforts get started.
2) The coordination overhead between major donors, researchers, and non-EA orgs is already prohibitively costly. (Coordination has some costs that expand super-exponentially, and there's already a lot of groups involved.)
3) I'm unsure that there are major costs that would be avoided by coordinating, or opportunities that would be found. Small donors can give to the major charities via Givewell fairly easily, and can choose any other cause on their own.
4) Having a "give here" suggestion/priority list seems to create potentially damaging correlation between givers' priorities - we'd probably prefer to allow donors to make their own allocation. (Though Givewell does publish recommendations for charities they don't support that they nonetheless suggest are worth funding, so I'm not sure anyone else sees this as an issue.)