[ Question ]

What's the best structure for optimal allocation of EA capital?

byMilan_Griffes1mo4th Jun 201927 comments

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In 2017 (the last year for which we have complete data), Open Phil accounted for 78.7% of all EA grantmaking. 2018 & 2019 will probably follow a similar pattern, though the data isn't in yet.

(Derived from Rethink Priorities' recent analysis; here's a spreadsheet showing my work.)

So EA is currently in a regime wherein the large majority of capital flows from a single source, and capital allocation is set by a small number of decision-makers.

Rough estimate: if ~60% of Open Phil grantmaking decisioning is attributable to Holden, then 47.2% of all EA capital allocation, or $157.4M, was decided by one individual in 2017. 2018 & 2019 will probably have similar proportions.

It seems like EA entered into this regime largely due to historically contingent reasons (Cari & Dustin developing a close relationship with Holden, then outsourcing a lot of their philanthropic decision-making to him & the Open Phil staff).

It's not clear that this structure will lead to optimal capital allocation. It's straightforward to imagine alternative structures:

  • e.g. Cari & Dustin route 50% of their philanthropy through Open Phil & 50% through a separate foundation.
  • e.g. Cari & Dustin route 90% their philanthropy through Open Phil, and allocate the remaining 10% to grantmakers seeking "moonshots" (Peter Thiel has done something like this by funding the Thiel Fellowship & Tyler Cowen's Emergent Ventures).
  • e.g. Cari & Dustin make large grants directly to the EA Funds, in addition to doing grantmaking through Open Phil.

I'm not claiming that any of the above will necessarily lead to better capital allocation than the current structure, but it seems plausible that they might.

I'm not aware of much discussion of alternative capital structures in the EA community, so exploring this seems valuable.




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I think that there's a pretty compelling case for Cari & Dustin to give everything to Open Phil. The main reason is that Open Phil is already evaluating and funding the other options, and will continue to do so. They are funding many moonshots (AI risk), and are basically funding many smaller grants (through things like regranting programs with BERI and CEA).

If they were to give directly to moonshots or other projects, that would just mean moving the decision from Open Phil staff to Cari & Dustin individually, which seems weird to me. They could hire other people to do this, but at that point they are basically making a competitor to Open Phil.

Should they sponsor an Open Phil equivalent/competitor? My guess is that this would most make sense if this other organization were sufficiently different and/or specialized; though in these cases, I'd expect Open Phil would be happy with them and consider funding them directly; they would be less of an equivalent and more of a collaborating group. If they were too similar they would compete for talent; I think much of the best talent is at Open Phil, so this would be a struggle for them.

From what I understand, Holden really doesn't have complete power. If his influence were too high, that could be modified while keeping the main Open Phil relationship the same.

The general structure of "I'm rich, so I'll make one, and only one, group to decide, on a high level, what to do with my money" seems pretty reasonable and common to me.

Separately, I'd of course like to see other mega-billionaires also come in, but that's somewhat of a separate issue.