CEA is launching a winter fundraising round

"How confident are you that you are producing more value than AMF?"

If this amount going to CEA doesn't increase donations to AMF and equivalently effective charities by more than that amount, I'll eat my hat. :)

It's a good question, and one that we ask ourselves a lot. If we thought we were worse than AMF and that wasn't likely to change, we would close up shop. I am fairly confident that we produce more value than AMF, partly because our activities raise more for AMF than they take away. However, I think it's right to be uncertain about this and Owen makes some good points.

In addition, I think most of the value of CEA's activities comes from long term potential of our projects and EA as a whole - as Ben discusses here.

Our positive effect on AMF is clearest at Giving What We Can which has a return of roughly 100:1 in high-value donations (counterfactually adjusted and time-discounted, but not all to AMF). Even if you assume that not a single member of GWWC gives another penny ever, the ratio is still 5:1. It is unclear if the marginal return on a donation to GWWC is higher or lower than the average return. It would be higher if we thought that GWWC could still realise increasing economies of scale. It would be lower if we thought most of the value comes from the idea itself and not execution on it. I tend to think marginal funds are more effective than average funds, but I'm very uncertain. A fuller discussion is here (http://effective-altruism.com/ea/ql/giving_what_we_can_needs_your_help_this_christmas/)

At 80k, the metrics are less directly comparable. At the last review we estimated it cost £1,670 to achieve a significant plan change (and these costs have been coming down every review cycle, indicating we are getting more cost-effective). It's unclear how much each plan change is worth - but it seems very likely that getting someone to earn-to-give or move to do valuable direct work will be worth far more than £1,670 to AMF even within one year.

GPP impact is extremely hard to estimate because idea change and policy-work are chaotic and complex. In order to get a lower bound, we can focus on just one policy that we advocated which was successfully implemented - increasing the research budget for treatment and vaccines for malaria, TB, and NTDs and pandemic prevention by £2.5bn over 5 years. If our calculations are correct this move was worth $1.5bn-$30bn in donations to AMF. Even if we are only responsible for a very small part of this, it isn't hard to imagine our 2015 budget outperformed a donation to AMF. (See discussion here http://globalprioritiesproject.org/2015/12/new-uk-aid-strategy-prioritising-research-and-crisis-response/)

EA Outreach is probably hardest to compare directly against AMF-type charities because much of our estimate of its value depends on the fact that we think effective altruism and its ideas have huge upside potential. Any attempt to calculate the direct impact within the first year of its running in terms of money to AMF would short-change the value of the work.

Because most of the money that goes to CEA has a huge counterfactual positive impact on funding for AMF, I'm quite confident in recommending giving to CEA.

With respect to your question about growth in costs - I think Owen has some good thoughts here. It seems, however, that the unit costs of CEA outputs are stable or decreasing so the growth in costs represents expanding outputs rather than decreasing marginal returns.

Hi Denise,

Not why you got a downvote, seems like a very reasonable discussion (but I note your prefacing as "taking one for the team", so perhaps you were expecting the downvote more than I was!).

I'll give my thoughts on these questions. I'm employed by CEA, but not speaking for CEA here. I'm sure you'd get a mix of thoughts from people who work there, but I also guess that my views aren't too atypical.

1) It's unclear whether the amount of money being raised should be regarded as large or small, and seems to depend quite a lot on the reference frame. First, not-so-relevant classes: it's very large by the standards of an individual (relevant for the "many hundreds of lives" comment), and very small by the standards of society as a whole.

More relevantly, it's large by the standards of the budgets from last year, or the year before, as you point out. With expansion like that, we should at least be considering whether the value of marginal activities is changing significantly. However, also relevant is that it's reasonably small by the standards of the effective altruism community (and this is true if you draw the border not just at CEA but including all the EA meta-charities*). Our metrics are a bit crude, but to a first approximation I think CEA has been growing in proportion to the community as a whole.

This last reference class seems one of the most relevant to me. The value produced by the continued growth of the movement is large. It's fairly clear that the growth happens as a result of things that people do. This includes a lot of things that individuals do without working on it full-time or being part of any organisation. Nonetheless, the average value of these activities is very high (even compared to the very good opportunities given by AMF), and the total amount of them isn't so high that the marginal value is obviously much lower (though it could be lower, and there is a question mark here). This gives an argument for scaling up meta-charity quite quickly. There are then questions about how much of that ought to be professionalised, and how much of the professional meta-charity ought to be at CEA rather than elsewhere. I won't try to answer that (but I will note that I think all of your queries have already kicked in by the time we get to the conclusion that metacharity activities should be scaling up roughly in proportion with the community).

2) How confident am I that CEA produces more value than equivalent donations to AMF? This turns out to be a surprisingly tricky question to pin down, because there are a lot of subtly different versions to which I'd give different answers. I'll try to specify and answer a couple of these, but these probabilities are from the top of my head and might change if you asked me another day. In all cases I'll include a guess about the opportunity cost of staff time in "equivalent donations".

2.1) How likely do I think it is that CEA as a whole produces more value than equivalent AMF donations?

80%, but this is a bit misleading. I'm closer to 95% that the bundle of activities is more valuable, but if CEA weren't pursuing them I think it's quite likely other individuals or groups would pick up and do more, and that it's possible that they'd do a better job.

2.2) How likely do I think that marginal CEA activities produce more value than equivalent AMF donations?

Quite dependent on the marginal activity. Averaged over a large enough margin, perhaps 80% again (though the chance that the bundle of marginal activities beats AMF is lower now, maybe 90% -- I think the displacement effects are weaker). But I think that individual CEA activities are significantly higher variance than AMF, so many of them may have low chances (~5-50%?) of outdoing AMF, balanced by the possibility of doing a lot better.

--

*Of the CEA orgs, I think it's right to consider GWWC, 80k, and EAO as essentially meta-charities. GPP has had a mix of activities, some of which have meta-charity goals, and some of which are aiming at other indirect levers to creating value. Taken as a bundle, I'm reasonably confident that the non-meta-charity activities significantly exceed the bar of AMF, but it seems quite possible that some individual activities don't.

A quick note that if you want to permanently grow your budget from £200k p.a. to £300k p.a. while maintaining 12 months reserves for your fundraising round at the start of the next year, you need to raise £200k rather than £100k.

12 months' reserves might be regarded as a bit generous (though it has a lot of advantages that aren't immediately obvious). But even if you went as low as 6 months reserves, which is cutting it fine, you'd still have to raise £150k. So absolute fundraising figures can be a misleading indicator of the associated spending growth.

Thanks for the long discussion everyone - I think I can cope with the single downvote. :-)

In case that wasn't clear, my phrasing was more for rhetorical reasons than it reflected personal beliefs. It seemed somewhat likely someone would use the same framing if noone else had done it so far, and then I'd rather have it written by someone where I'm not worried that it will put a strain on the relationship between CEA and them. But maybe I'm just rationalizing feeling like I wanted to be controversial that day. ;-)

As far as I'm personally concerned, I very much agree with Ben that you should view CEA as four different organisations. I'm completely fine with 80k's budget, very happy to see GPP expanding, have already talked about EAO with Kerry and haven't looked at GWWC's prospectus and the discussion yet.

I'm curious how long the fundraiser is supposed to last? I think it would also be helpful to have information handy on one webpage how much has been raised for each organisation so far.

I recommend thinking of CEA as 4 organisations rather than one. For instance, 80k is only increasing its budget from 2015 to 2016 by about 40%. That seems pretty reasonable to me given that we've been tripling our key metrics (annualised).

Edit: Also 2014-2015 we only grew the budget about 25%, and the year before that it shrank 5%, so our 3yr budget growth rate is well behind the growth in our metrics and the EA movement as a whole.

Sorry, document is now linked to in post.

GPP's total budget for 2016 will be roughly £220,000 which is roughly what our minimum target is. The reason there's a discrepancy between this figure and the £95k figure is that the £95k figure presented in the overall CEA budget includes only sums that flow through CEA and doesn't include any shared services. However, GPP is a joint project with FHI, so in 2016 a significant portion of the total costs will be funded via FHI rather than CEA. In addition, we are expecting to hire a seconded civil servant whose salary will be partly funded by the state. This is not counted as part of the CEA budget but is counted as part of the GPP budget.

You can find lots more detail on GPP here

CEA shared services are the parts of CEA that are not linked to just one specific organisation. This includes parts that are funded straight from org contributions and parts that we are trying to fundraise for separately. Not quite exhaustively the part funded straight from org contributions includes office costs, legal, finance, HR, and my salary. The part funded from unrestricted donations will be more discretionary projects that we think are likely to benefit CEA as a whole in the longer term. This will include hiring a marketing expert, EA strategy researcher and potentially a fundraising expert (though we did not end up hiring for that position this winter).

The shared services budget is going up quite a lot partly because it has been held artificially low (we haven't had enough capacity and had large amounts of volunteer or intern work), partly because we're expanding to the US and partly because we'll offer the orgs new services like full-stack marketing help. It's staying roughly constant as a proportion of total expenditure. There are some downward pressures. For example, Tara has secured a pro bono deal where we can outsource our accounting for free once we upgrade to a more sophisticated platform.

I'm sorry, it was confusing to split out shared services here when we normally show all the costs distributed to the orgs. In the future, when not all of the shared services budget will come through the orgs, the new layout of the information is likely to make more sense.

Ping. I also have ongoing confusion here because in some places this is referred to as 'shared services' and in some places as 'CEA unrestricted'. These sound like very different things! Is this something that existed in previous years (and wasn't fundraising for what reason exactly?), and if not what's changed?

Not quite, our total budget for 2016 is about £1.2m, about $1.8m (detailed breakdown on page 12 of the prospectus).

The sum of the funding targets is greater than our budget because at the moment many of our organisations have quite small reserves and need to raise more than they plan to spend this year in order to have healthy reserves at the end of the year. That would allow us to only fundraise once per year, which is a much more efficient use of staff time. General advice is for charities to have roughly 6-18 months of reserves at all times.