Summary: Is being a grant-funded solo researcher compatible with any level of job security? How are grants taxed, and how do solo researchers handle healthcare, retirement savings, etc? For a movement obsessed with both grantmaking and career advice, there are surprisingly few answers online.

I was recently talking to a friend who was trying to hype me up on the idea that I should dream big, apply for an EA grant, and try to build a career as a full-time researcher/blogger/public-intellectual. This concept strikes me as somewhat insane, albeit enticing for many reasons. But I realized during the conversation that a lot of my hesitance was coming from the fact that I can’t picture what the life of a solo-researcher grant recipient is like. All you people getting grants from EA Funds, FTX, and so forth — how do you think about your long-term career plans? How do the basics of personal finance work when you’re not a traditional W-2 employee?

These questions might not matter to eager college graduates just out of school, who are happy to take a 1-year grant in order to work on developing their career. But if you are already mid-career, and value maintaining a stable living situation suitable for raising a family, are EA grants a viable option at all? (If not, that is okay, since there are many other ways to contribute — like donating cash to top charities, writing blog posts in your spare time, or getting hired into a traditional employer/employee relationship at an EA org.  But I want to know whether or not my friend's advice is crazy.)

Here are some questions that came to mind as I tried to understand what life would be like in the EA grant-based ecosystem.  I tried to look this stuff up on the Forum, but didn't find many answers -- there is plenty of 80K-style career advice, a lot of lists of funding opportunities, some descriptions of what the life of an independent researcher feels like day-to-day, and a bunch of "Effective Altruism Lifestyle" advice about how the philosophy of EA might influence stuff like parenting decisions.  The closest thing I found to what I wanted was this comment thread wherein people debated the merits of long-term funding for independent researchers.

Questions about long-term career planning:

  • What is the long-term picture here? Do some people intend to just keep getting grants forever, each year, for the rest of their career? Is the idea that the grants would come just from one organization, or that you would hop around continuously? (This seems to me like a scary situation with essentially zero job security, but maybe I’m wrong about this?)
  • Which EA funders are even capable of potentially making a long-term funding commitment? (For instance, in the case of FTX Future Fund regrantors or Survival & Flourishing “S-process” participants, won’t the group of people making the grants be different every year?)
  • If “grants forever” isn’t feasible, is everyone planning to use grants as temporary career-transition stepping-stones, eventually getting hired at a think-tank or something? (In this case, mid-career people who value stability should eschew grants and just apply for jobs at EA orgs. But jobs at organizations often have specific roles, structured research agendas, etc — this is different from the grantmaking world where people are pitching their own projects and composing their own independent research agendas. So jobs and grants don’t perfectly substitute. Should there be some Rethink-Priorities-esque organization that offers people “EA Tenure” to pursue more independent projects?)
  • Some people might be able to develop their careers until they are profitable on their own by selling substack subscriptions or speaking at events or whatever. But this seems like a difficult goal that only a small percentage of people will be suited for; general-interest blogs can monetize in ways that detailed technical research can’t. Maybe there is some creative way that EA can support this kind of freelance work, and thus make it more feasible for a wider class of people? (Maybe a grantmaking organization could say something like, “Don’t bother trying to monetize your animal-welfare blog early on; we’ll pay you $1/month per newsletter subscription you get, up to 5000 subscribers.”)
  • My impression is that entering academia is pretty hard to do from outside academia. (Eg, if you don’t have a PhD and your college major was in a totally unrelated field.) But some people have followed this path — Robin Hanson was a physics major, then a programmer at NASA and Lockheed Martin for nine years, before he became an economics professor. Is this something that mid-career people should consider at all?
  • Or maybe people have yet different plans, or I’m somehow thinking about this whole issue in a totally-wrong way.

Questions about personal finances:

  • If you get a $50K grant, is this better or worse on net than earning $50K of traditional W-2 employment income? How is the grant money taxed — the same as regular income, or as small-business self-employment income, or as something wild like gambling winnings, or what? (The question of how much of the grant money you will actually get, post-taxes, is an important consideration for folks who might already be taking a large pay cut to work in EA instead of in tech.)
  • For tax efficiency, should grant recipients optimally incorporate themselves as an S-corporation, or a charitable foundation, or something else? Should they take their grant in small amounts spaced out year-by-year instead of all in the first year? Maybe there is some kind of incredible tax savings which makes the $50K of grant money much more appealing than $50K of income.
  • How do EA freelance researchers deal with the things that are typically provided through the employer/employee relationship — things like healthcare, disability insurance, retirement savings accounts, and so forth? Maybe there are clever solutions here, but otherwise it seems like $50K of grant money is going to look a lot worse than $50K of income when you add in all the other benefits of employment.

Unknown unknowns:

I feel like there must be a bunch of other details and bits of life-advice that would help me imagine what the EA freelancer life is like, but which I don’t even know enough to ask about. Maybe there are important things to know about the literal process of talking to the grantmakers, transferring the money, writing up progress reports?  Maybe the real problems aren't so much financial as social, and the title of this post should have been, "Grantees: what lies do you tell your relatives to stop them from nagging you about your unorthodox career decisions?"

People probably have helpful advice about how to stay productive, keep up social connections with other EAs, and stay on top of new developments in your field, when you are working independently. For instance, I feel like I would be interested to hear someone tell me, "These are some tips on how to deal with having kids and raising a family when you’re a freelance grant-funded longtermist researcher", but I have no idea what they would say next.

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You would essentially be a freelancer. Using that framing instead, there are plenty of resources out there on how to build a life as a freelancer. For an EA-specific perspective, here’s a good starting point: https://resourceportal.antientropy.org/docs/receiving-grant-funds

Not currently funded by an EA grant, but I am a fellow for an organization the classifies me as an independent contractor (IC), which in essence is what most people who receive a grant are likely to be (in the eyes of the IRS anyways). This is obviously not tax advice, always consult an attorney, etc. but as someone who has done this a few times in their career, I wanted to share some high level thoughts (also, this is going to be very focused on the U.S. and as an American taxpayer).

  • Is a 50K grant as an IC better or worse than 50K as a W-2 (traditional) employee?: In purely financial terms, you're going to likely be worse off as an independent contractor as 1) you will have higher tax liability from self-employment taxes and 2) you will probably not have any benefits that are standard with traditional employment (medical, dental, 401k match, etc.) that you will have to manage yourself.
  • Should you incorporate yourself?: I had talked to an accountant about this a while back and my takeaway is if we're talking about sums like 50k or 100k, there isn't really a serious benefit. If you're dealing with larger amounts per year, I would recommend speaking to an accountant and figuring out how to create an optimal structure, but for a regular salary, I think it's better to just simply take it as a sole proprietor. That said, if you have concerns over legal liability of the services you provide, you might consider working through a legal structure, but this is not really a financial consideration.
  • How do you deal with things like healthcare?: If you're in the U.S. there is a healthcare marketplace for each state now through ACA (Obamacare) that you can use to shop for private plans. For my 401k for simplicity I use Wealthfront, I also keep a life insurance policy that I used a broker to find, for other things I just pay out of pocket at cash prices (e.g. getting a teeth cleaning).

As far as how to think about it- I'm not a great person to respond as I've generally been pretty comfortable with a high level of personal career/financial risk, but I would just remind yourself that you probably have valuable skills and that even if you found you weren't going to get renewed for a grant ~3 months before you run out of funding, you could probably find a new gig by the time it ends (that said, always good to have a few months of buffer just in case). 

If you get a $50K grant, is this better or worse on net than earning $50K of traditional W-2 employment income?


Worse, easily, but it costs them less. If a regular employer pays you a $50k salary, that is costing them more like $75k or $100k or something - they are paying part of the taxes, and the benefits, on top of the salary. So the real comparison is between a $50k salary and a $75k or $100k grant, in which case I would say the grant is better because you have more flexibility about benefits. Don't have any dependents? As a grantee you can just not buy life insurance, and spend the money on something else. As an employee, you may not have a choice.
 

For tax efficiency, should grant recipients optimally incorporate themselves as an S-corporation, or a charitable foundation, or something else?

This is not legal advice, but my guess would be no. When a nonprofit pays its employees (which is what you would be if you set up a nonprofit and pay yourself), the employee still has to pay income tax on that just like anyone else, and the nonprofit still has to pay its share of social security taxes and such. For a typical EA job, if you aren't employing anyone, or taking out loans for your work or something, you also don't get any advantage in terms of liability. Incorporation does not protect you when you do something stupid. Incorporating protects you when someone else in your organization does something stupid. This is not useful if there is noone else in your organization.
 

How do EA freelance researchers deal with the things that are typically provided through the employer/employee relationship — things like healthcare, disability insurance, retirement savings accounts, and so forth?

I was self employed for years. Health insurance is easiest through obamacare but you could buy it form any insurance company. For savings, I used IRAs, and if you max those out there are other accounts available to the self-employed. I didn't have disability insurance, but I imagine that can also be bought from an insurance company. But yes, you have to decide what benefits you want and go buy them yourself.

(This whole answer is USA-specific)

This seems to me like a scary situation with essentially zero job security, but maybe I’m wrong about this?

The only real job security is to have marketable skills. Eternal perfect job security is extremely rare in the USA—I can’t think of anyone but tenured professors who have that. If you work at a startup, the startup could go under. If you work at a big firm, there could be layoffs. Etc.

The way I see it, if you successfully get a grant in Year N, then that should be strong evidence that you can successfully get a grant in Year N+1. After all, you’ll now have an extra year of highly-relevant experience, plus better connections etc. Right? (Well, unless you waste the grant money and get a bad reputation.) (Or unless the cause area funding situation gets worse in general, but that would equally be a concern as an employee at big nonprofit too, and anyway seems unlikely for major EA cause areas in the near future.)

And if not, whatever type of job you were doing before, you can apply for that type of job again! (If you leave on good terms, you could apply for literally the same job you left.)

Should they take their grant in small amounts spaced out year-by-year instead of all in the first year?

Do your taxes with accrual accounting! One time I wound up getting 26 months of pay in one calendar year. It would have been a catastrophe with cash-basis accounting, but it was perfectly lovely thanks to accrual accounting.  :)

For tax efficiency, should grant recipients optimally incorporate themselves as an S-corporation, or a charitable foundation, or something else?

You can be self-employed automatically without filing any special paperwork. That’s the category I’m in.

IIUC, the advantages of being a charitable foundation are all on the grant-giver side, not the grant-receiver side. Namely: (1) If you’re a charitable foundation, and another nonprofit wants to give you money, it is extremely easy for them to do so. (2) If you’re a charitable foundation, and an individual wants to give you money, then they can tax-deduct it.

However, some institutions including EA Funds have jumped through whatever hoops there are such that they can give money to individuals.

If your grantor is willing to give you the money as an individual, I think there’s no reason on your end to do anything different than that.

(If you want the advantages of being a nonprofit, e.g. getting money from SFF, without filing all the paperwork to be a nonprofit, I vaguely recall that there is an institution in the EA space that will “take you in” under its umbrella. But I can’t remember which one. There are also “virtual research institutes” (Theiss, Ronin, IGDORE, maybe others), that offer the same advantage (i.e. that your grantor would be officially granting to a nonprofit), but they’ll take a cut of every grant you get. A different advantage of the “virtual research institutes”, I suspect, is their ability to handle government grants, which I imagine come with a ton of bureaucracy & paperwork.)

Certain kinds of incorporation give you liability protection, which would be relevant if your “business” is going to borrow money or where there’s a risk of getting sued. That hasn’t been applicable for me.

If you get a $50K grant, is this better or worse on net than earning $50K of traditional W-2 employment income? … How do EA freelance researchers deal with the things that are typically provided through the employer/employee relationship — things like healthcare, disability insurance, retirement savings accounts, and so forth?

If you want to know how big a grant is necessary to support your living expenses, you have to do the annoying spreadsheet where you calculate the major taxes and deductions and expenses etc.

To answer your specific questions:

  • For me, $X of grant income was considerably worse than $X of W-2 income, even leaving aside the fact that the latter often comes with employer-provided benefits. The QBI deduction helps, but not nearly enough to compensate for the employer contribution to payroll taxes etc. It’s possible that this is income-dependent, I’m just saying what it was for me.
  • Yes I pay out-of-pocket for disability insurance, and (Roth & regular) IRAs, and an obamacare plan.

what lies do you tell your relatives to stop them from nagging you about your unorthodox career decisions

It was fine, partly because I didn’t quit my old job until my first 1-year grant was finalized, and so far I have gotten renewal grants well before the previous grants ran out. (Sample size = 1, but still.)

(speaking for myself, not my employers)

The way I see it, if you successfully get a grant in Year N, then that should be strong evidence that you can successfully get a grant in Year N+1. After all, you’ll now have an extra year of highly-relevant experience, plus better connections etc. Right? (Well, unless you waste the grant money and get a bad reputation.) (Or unless the cause area funding situation gets worse in general, but that would equally be a concern as an employee at big nonprofit too, and anyway seems unlikely for major EA cause areas in the near future.)

I think this is true overall but it's overstated for initial grants (e.g. Year 0 or Year 1). Often funders might be excited to fund someone to help them "test their fit" for work in a new domain, and it's positive EV to do such a test even if someone only has a 20% of being amazing. I don't know what the empirical situation looks like for how often grantees get renewed, but I'd strongly encourage one-year or three-month grantees to not think of their grants as roughly as high job security as  that of working normal jobs in the corporate sector or academia, unless they've explicitly been assured of this by their grantmakers.

That said, I think it's broadly true that most independent EA work, particularly in longtermism, selects from and/or trains skillsets that are quite lucratively outside of EA, so I expect most EA (e.g.)  independent researchers to have reasonable "exit options" outside of their granted work.

The only real job security is to have marketable skills. Eternal perfect job security is extremely rare in the USA—I can’t think of anyone but tenured professors who have that. If you work at a startup, the startup could go under. If you work at a big firm, there could be layoffs. Etc.

 

One difference between being an employee vs being a grant recipient/independent contractor is that employees get unemployment insurance in the US, while contractors don't (with the exception being the expanded pandemic unemployment benefits in 2020).  While it's true that there's no such thing as perfect job security, you do get more of a built-in cushion as an employee. 
 

Note: Quick thoughts written whilst on the train.

I've received three grants from the EA Infrastructure Fund to start and develop Effective Self-Help so I can hopefully offer some useful thoughts here.

I think personal finance questions are difficult as there's likely significant variation between countries and personal circumstances. For me specifically, I'm listed as an independent contractor on my grant agreements and have full responsibility for filing my taxes in the UK as a self-employed individual. 
I've found the EA Infrastructure Fund to be generous in their salary offers and I think a good part of this is to account for pensions, health insurance, taxes, etc. that you'll have to cover within that salary. I can't speak for any of the fund managers but would guess from my interactions that they would be quite happy to pay an extra 10-20% in salary if that was likely to make a difference to the productivity of the grantee and the sustainability of the project. 


For long-term career planning, I fit snugly into the bucket of people who took a grant to fast-track skills and knowledge growth while being in an early part of my career. I think working on an independent project provides a host of valuable skills and likely additional exposure that can compensate for the additional psychological stress of lacking long-term employment stability. Certainly that's easier to say as someone with minimal direct responsibilities outside of my own wellbeing.

If it's helpful to anyone, happy to chat in more depth about these topics with anyone thinking seriously about working on an EA grant - just shoot me a message!

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I also actually have no idea how people do this, curious to see answers!

Also, the questions seem to assume that grantees don't have another (permanent, if not full-time) job. I'm not sure how common that is.