An approach I often use in my coaching is to pick the ONE thing, that if you could change, would have an exponential (or just the most) impact on the rest of your day. I propose that we use that mentality to pick the most easy-hanging fruit to help EA orgs be most impactful. I personally think that the ONE thing for EA orgs is mentorship and support - Charity Entrepreneurship does an excellent job of that, and it's a model that the rest of the funding community should incorporate. At the risk of sounding too critical, I will say that I think it's somewhat neglectful of funders to give people financial support to start their organizations, but not provide them with the right org infrastructure support to help them be successful.
The objective of this post is to highlight key, easily actionable areas that would likely make all the EA funding dollars much more impactful.
A few thought exercises
- If you, as a funder, knew that by giving each startup an extra 10% to create a healthier infrastructure, you would increase the survival rate and/or impact on average by at least 30%, would that be worth it?
- Say you have 2 organizations with the same agenda. One started with the right resources and guidance to create a healthy infrastructure, and the other without. What would you expect the difference in the overall impact and survival of each org to be?
My Perspective of the Current Landscape
To start with, I want to add a disclaimer that this article is based on my own experiential data with EA and EA-aligned orgs, as well as the experiences and perspectives of many other service providers in the EA space (see this article about EASE). This is by no means inclusive of all orgs and all problems - it is just my subjective perspective of the current systems.
Here's how I assess the current funding landscape:
|Objective||Spawn effective charities.||Take an effective charity idea and bring it to fruition|
|Methodology (as I see it)||Develop cause areas that should be funded. Attract applicants and initiatives. Vet applications. If the cause and numbers are in line with prior established metrics, approve and transfer funds.||Do initial research, create a financial plan based on knowns, apply for funding, potentially receive funding, and report on progress annually.|
|What’s often missing|
Proposed changes to the system:
- Have standard budget items that every startup should be including. For example, accounting, legal, marketing, ops, coaching, mentorship, community groups, HR, software, rent, travel, salary, benefits, healthcare etc. Not everything will apply to all orgs, but this way funders can make sure the orgs have the resources to be successful from the start. It may be helpful to have a budget consultant as part of the approval process.
- Encourage startups to seek professional help (not necessarily from within EA) – perhaps partner with a few orgs or management consultants that can support them well. Mentors and supervisors and coaches are all good ideas.
- Encourage startups to spend money on developing their community support system and their org support system – this will create a strong ecosystem of effective charities. It’s hard to be an entrepreneur and too many people do it alone.
- Implement accountability metrics for compliance. Get proof of a separate legal entity and bank account in that name before transferring funds. Get proof of insurance 30 days later. Require annual P&Ls before continued funding.
- Track performance data - how much was funded, how long the org lasted, reasons for success / failure, resources utilized
In order to make these changes happen, I believe it needs to be systemic. I do think it's something the funders need to reinforce for it to be widely adopted. If we want to support our young orgs well, it's a conversation we all need to be having.