While I think this piece is right in some sense, seeing it written out clearly it feels like there is something uncooperative and possibly destructive about it. To take the portfolio management case:

1. Why do the other fund managers prefer 100% stocks? Is this a thoughtful decision you are unthinkingly countering?

2. Each fund manager gets better outcomes if they keep their allocation secret from others.

I think I'm most worried about (2): it would be bad if OP made their grants secret or individuals lied about their funding allocation in EA surveys.

Tweaking the fund manager scenario to be a bit more stark:

• There are 100 fund managers

• 50 of them prefer fully stocks, 50 prefer an even split between stocks and bonds

• If they each decide individually you'd get an overall allocation of 75% stocks and 25% bonds.

• If instead they all are fully following the lessons of this post, the ones that prefer bonds go 100% bonds, and the overall allocation is 50% stocks and 50% bonds.

It feels to me that the 75-25 outcome is essentially the right one, if the two groups are equally likely to be correct. On the other hand, the adversarial 50-50 outcome is one group getting everything they want.

Note that I don't think this is an issue with other groups covering the gaps left by the recent OP shift away from some areas. It's not that OP thought that those areas should receive less funding, but that GV wanted to pick their battles. In that case, external groups that do accept the case for funding responding by supporting work in these areas seems fine and good. Which Moskovitz confirms: "I'm explicitly pro-funding by others" And: "I'd much prefer to just see someone who actually feels strongly about that take the wheel."

(This also reminds me about the perpetual debate about whether you should vote things on the Forum up/down directionally vs based on how close the vote total currently is to where you think it should be.)

I think the presentation of this argument here misses some important considerations:

• The way that you want us to act with respect to OP is already the way that OP is trying to act with respect to the rest of the world.
• The same considerations that lead OP to choose not to allocate all their funds to the highest expected value cause should also be relevant for individual donors, and could legitimately mean that they should diversify as well. There seems to be an inconsistency in saying these considerations are valid for OP but not for individuals.
• Even if you are a pure marginal EV maximizer (you think these considerations are invalid for OP and for invidiauls),  OP's donations won't always be relevant to your donation decisions, and if they are, it is the absolute amounts donated, rather than the percentages, that are relevant.

The way that you want us to act with respect to OP is already the way that OP is trying to act with respect to the rest of the world

EAs don't fund the most important causes, based purely on scale (otherwise tonnes of things EAs ignore would score highly, e.g. vaccination programs in rich countries). A core part of EA is looking for causes which are neglected. We look for the areas that are receiving the least funding relative to what they would receive in our ideal world, because these are likely to be the areas where our donations will have the highest marginal impact.

This is the reply to people who argue "oh you want local charities to disappear and to send all the money to malaria nets". The reply is: "No! In my ideal world, malaria nets would quickly attract all the funding they need. Then there would still be plenty of money left over for other things. But I think I should look at the world I actually live in, recognize that malaria nets are outrageously underfunded, and give all my resources there."

So in a sense, the argument you are making here isn't anything new. You are just saying we should try to act towards other EAs in a similar way to how EAs as a group act towards the rest of the world. And I don't disagree with this. But I think we should go all the way. I think we should treat other EAs in the same way that we treat the rest of the world. If I understand your argument correctly, you are trying to draw a distinction between the EA community and everyone else.

The same considerations that lead OP to choose not to allocate all their funds to the highest expected value cause should also be relevant for individual donors

OP do not allocate all of their funding to the 'best' cause. Even if OP were a pure EV maximizer, they might have valid reasons not to do this, because they have such a big budget. It may be that diminishing marginal returns mean that the 'best' cause stops being the best once OP have given a certain level of funds to it, at which point they should switch to funding another cause instead.

But my impression is that this is not OP's reason for donating to multiple causes (or at least not their only reason). They are not purely trying to maximize expected value, or at least not in a naive first order way. One reason to diversify might be donor risk aversion, like you mention (e.g. you want to maximize EV while bounding the risk that you have no positive impact at all), and there are plenty of other considerations that might come into it too, e.g. sense of duty to a certain cause, reputation, belief in unquantifiable uncertainty and impossibility of making certain cause comparisons etc

But if these considerations are valid for OP then they should also be relevant for individual donors. For example, if an individual donor wants to bound the risk that they have no impact, then that might well mean not donating everything to the cause they think is most underfunded by OP. It would only make sense to do this if they had a weird type of risk aversion where they want to bound the risk that the EA community as a whole has no positive impact, but are unconcerned about their own donations' risk. This seems very arbitrary! Either they should care about the risk for their own donations, and should diversify, or they should be concerned with all of humanity's donations, in which case OP should not be diversifying either!

Pure EV maximizers don't care about percentages anyway

You could bite the bullet and say that neither OP nor individual donors should be diversifying their donations (except when faced with diminishing marginal utility). For these individual donors, they should be donating everything to one cause (and probably one charity unless they have a lot to give!) But even for these donors, it's not which causes OP underfund that really matters. It's what causes all of humanity underfund. So it is not the percentages of OP's funding allocation that matter, it's the absolute value.

If OP are a relatively small player in a cause area (global health..?) then their donation decisions are unlikely to be especially relevant to the individual donor. If they thought global health was the top cause before OP donations were taken into account, it probably still will be afterwards. But if OP are a relatively big player (animal welfare..?) then their donations are more relevant, due to diminishing marginal utility. But it is the absolute amount of funding they are moving, not the percentages, which will determine this.

I initially found myself nodding in agreement but then I realised a confusion I have:

Why should a donor/grantmaker limit their consideration of what is most underfunded to the EA community?

After all, the EA community is a nebulous community with porous boundaries. E.g. we count Open Phil, but what about The Navigation Fund? Bill and Melinda Gates Foundation? And even if we can define the boundaries, what do we actually gain by focusing on this specific subset of donors?

If you instead focus on 'what is most underfunded at the global level' then the question returns to the same broad question of cause prioritisation ("your value system's most preferred causes").

Note, from this post:

[The Navigation Fund] has made a non-binding commitment to sustain funding through 2026 for all of the recurring grantees that the OP Farm Animal Welfare Program will no longer be allowed to fund

I suppose this wouldn't include new orgs in wild animal welfare and invertebrate welfare, though.

I'm curious how many people actually split their individual giving across cause areas. It seems like a strange decision, for all the reasons you outline.

For the typical EA, this would likely imply donating more to animal welfare, which is currently heavily underfunded under the typical EA's value system.

Opportunities Open Phil is exiting from, including invertebrates, digital minds, and wild animals, may be especially impactful.

I strongly agree: the comparative underfunding of these areas always felt off to me, given their very large numbers of individuals and low-hanging fruits. 
However, it feels like more and more people are recognizing the need for more funding for animal welfare, given the results of the recent debate.

I think this is a really compelling addition to EA portfolio theory. Two half-formed thoughts:

• Does portfolio theory apply better at the individual level than the community level? I think something like treating your own contributions (giving + career) as a portfolio makes a lot of sense, if you're explicitly trying to hedge personal epistemic risk. I think this is a slightly different angle on one of Jeff's points: is this "k-level 2" aggregate portfolio a 'better' aggregation of everyone's information than the "k-level 1" of whatever portfolio emerges from everyone individually optimising their own portfolios? You could probably look at this analytically... might put that on the to-do list.

• At some point what matters is specific projects...? Like when I think about 'underfunded', I'm normally thinking there's good projects with high expected ROI that aren't being done, relative to some other cause area where the marginal project has a lower ROI. Maybe my point is something like - underfunding and accounting for it should be done at a different stage of the donation process, rather than in looking at overall what the % breakdown of the portfolio is. Maybe we're more private equity than index fund.

This is an understandable point to leave out, but one issue with the portfolio analogy is that, as far as I can tell, it assumes all "EA" money is basically the same. However, big donors might have advantages in certain areas, for instance if a project is hard to evaluate without extensive consultation with experts, or if a project can only be successful if it has a large and guaranteed funding stream. As such, I'm not sure it holds that, if somebody thinks Open Phil is underinvesting in longtermism compared to the ideal allocation, then they should give to longtermist charities- the opportunities available to Open Phil might be significantly stronger than the ones available to donors, especially ones who don't have a technical background in the area.

I agree with the overall conclusion of this post but not completely with the reasoning. In particular, there is an important difference between allocating investments and allocating charitable donations in that for investments it makes sense to be (at least somewhat) risk averse, while for donations a simple strategy maximizing expected benefits makes perfect sense.

Even a risk-neutral approach to charitable donations will have to spread its investments however, because there is only so much money that the most effective charity can absorb before reaching its funding gap, which makes the next best charity the new most effective one.

For a big organization such as OP, this can become a real problem for a cause area where there are many charities with high effectiveness but (relatively) low funding gaps. This might be part of the explanation why OP pays more to global health, where there are very large organizations that can effectively absorb a lot of funding, over animal welfare.

For small individual donors, this means that there are likely opportunities to make very effective donations to organizations that might be too new or too small to be picked up by the big donors. You might even help them grow to the size where they can effectively absorb much larger donations.

So to reiterate, I think it makes sense to prefer donating to smaller charities and cause areas as an individual donor, but the reason is that they might be overlooked by the big donors, not to "balance out" some imaginary overall EA portfolio.