Thanks very much Peter! I'm really glad you've found it useful. Rob had just the same reaction, so he did a calculation on the margin - you can find it on p28 of the Fundraising Prospectus. Interestingly, the impact on the margin actually seemed higher than overall - it seems like there are some economies of scale now that we have enough people on the team to specialise, and we've been at it a bit longer so have more of an idea what we're doing.

• The point at which you hit diminishing returns to funding an org may actually be pretty low. I'd be skeptical about the marginal value of budget increases of much more than a factor of 2 per year unless the org had demonstrated really impressive traction.

• There are also signaling issues with only donating to metacharities, so if you're public about your giving it might not be a great idea ("guys, look at how much I donate to these organizations that promote donating to themselves!").

• The error bars around these estimates are extremely high. The confidence interval for GWWC's leverage ratio plausibly already includes numbers below 1 (in addition to numbers above 300). For instance, this is one reason GiveWell doesn't recommend any metacharities--which, IIRC, someone said at one point that they would if they could find one with a robust enough case for impact. Donors with preferences similar to GiveWell's may reject metacharities entirely for that reason.

(Disclosure: I donate mostly to metacharities...)

Thanks for the question Jon.

With regard to the pledged amount, this comes from members' predictions of their future annual salary, which we think are likely to be underestimates. We also use median wage as a stand-in if we're missing future salary data, which (given our members are in general likely to earn more than median wage) we also think is conservative. Accordingly, it's likely that the amount donated will be higher in reality.

We address this in more detail in our fundraising prospectus – see Appendix 2 for the full working.

From page 23 of the prospectus:

This methodology obviously relies on the accuracy of members’ predictions about their future income. In general we have found that these predictions seem conservative, as most people underestimate their future earning potential (1). If members do not estimate their future salary, we use the median salary for their country. We think that is a fairly pessimistic assumption, as our median member has an expected earning potential higher than the median wage (2).

And the footnotes to the above:

(1) For example, many members estimate their future income will be the same as their current income, even though they are at the beginning of their careers - in reality, income typically increases throughout a person’s career (2) For example, many members attend prestigious universities and/or are pursuing careers that have an average salary much higher than the median wage

The final $146m figure is arrived at by multiplying members' estimates of future salary by the number of years they have left in their careers. It therefore doesn't take into account any of this growth that you'd expect in reality. As such, it wouldn't make sense to go back and try to model growth based on the $146 million figure (say, $1.7 million in year one, growing to around $5.6 million/year by year 40, rather than a flat $3.7m per year)*.

Instead, you'd need to apply your model (say, fast wage growth in the first 10-20 years of a career, then slower growth until retirement) to the member estimates first to derive the final figure, and use the yearly amounts in your calculation. Given our assumption that member estimates of future salary err on the low side, this means that both the final pledged amount, and the per-year amounts are likely to be higher, and therefore our effectiveness would in fact be higher, notwithstanding that the discounting/attrition rate would affect the final number more aggressively.

* I've tried this calculation, assuming a 4% growth rate for years 1-20 and a 2% growth rate in years 21-40. With a year one pledge of $1.7 million, this grows to $5.6 million by year 40, for a total of ~$147 million donated. This drops the effectiveness estimate down to 44-1 - a significant drop, but still excellent return for a donation to Giving What We Can. To reiterate, I think this would be a significant underestimate of peoples' future incomes.

Thanks everyone for your interesting in GWWC research.

The purpose of GWWC doing research is fourfold:

1. Find very effective charities/interventions and add to Givewell’s research. In the past we might have influenced Givewell’s recommendations - see: https://drive.google.com/file/d/0B-ky1zIxhwx_aUZiY3ZfOWplTXd2ODF5aEt2aUJOU2dKWTFV/view?usp=sharing Our niche is to specialize on global poverty charities / interventions and we hope to continue to add to the knowledge base in this area. For instance, this means that we likely will not do much in-depth research on Marijuana legalization in Vermont. We also focus more on intervention effectiveness than operations and the financials of charities (even though we do shallow investigations on this). Givewell now has 18 Full-time staff (and is expanding), but many work on the Open Philanthropy project and not that many on their top charities. There are still relatively few independent evaluators in world working on the intersection of effectiveness under ideal trial conditions (efficacy) and the effectiveness under large-scale programme conditions (effectiveness), and so I think it’s good to have more people working on this.
2. It’s also good to have some independent evaluation and peer-review of Givewell's research, even in the case of highly transparent organisations such as Givewell
3. Provide supervision for global poverty / effectiveness research projects to highly motivated students, in order to deeply involve them with EA.
4. Finally, if we want to scale and grow roughly exponentially to eventually consistently move many millions to effective charities every year, it’s important to have in-house expertise to inform and fact-check our outreach and marketing, and make us credible when recommending charities to our members.

"Why does GWWC continue to do charity evaluation research?"

I think it could be useful to have more than one organisation evaluating interventions, rather than having all our eggs in one basket. That doesn't mean it should be GWWC but I'm happy for there to be overlap, it will add verification to GiveWell's recommendations as well as potentially uncovering new ones.

Hi Ben, thanks for these questions. I'll just field those that I'm well placed to answer.

"Which of the people on the "our team" page is paid by GWWC and how much time do the team members spend on it? Presumably Toby Ord and Andreas Morgensen do not work full time on GWWC if they're both professors, and Luke Ilott hasn't started yet; does that mean that GWWC is five full-time people right now?"

Toby and Andreas don't receive any income from GWWC and indeed are more part-time advisors than staff, though very valuable ones. You are right that Luke hasn't started yet, so there are five staff: Michelle, Jon, Alison, and the recent recruits Hauke and Sam.

"Out of curiosity, is there a timeline of how many full-time equivalent people were working at GWWC at any one time? It would be interesting to compare that to the growth data (which, by the way, it's super awesome that you make available!)"

Hmmm, I don't think we have a close record easily accessible, but going from my memory and averaging over people coming and going month-to-month:

Mid 2012- mid 2013 - 2 staff

Mid 2013- mid 2014 - 3 staff

Late 2014 - still 3 staff

2015 - Have gone from 3 to 5 staff

Late 2015 - 6 staff

GWWC, being an outreach organisation, has historically had a lot of interns and volunteers staying for 1-10 months. However, it would take me some time to get averages for those (because the lengths of stay and amounts of work are so irregular)! If anything that has been stable or somewhat decreasing over the last 3 years.

"I notice that you budgeted for volunteer interns as if you were paying them a standard hourly rate, which is great. However, I also notice that a lot of your growth strategy for next year involves leveraging local volunteers who aren't employed by GWWC per se. What would your estimated budget be like if these people's time was also included? And what is the reasoning behind omitting it?"

We reimburse interns (some) of their living expenses when they are here if they need it. As a result it actually costs money. Volunteers or interns working in chapters around the world don't get paid anything by us (or if they are, only very rarely). So there is no direct financial cost. In most cases we don't think those volunteers would be doing something similar to Giving What We Can (like say, earning a lot of money to donate) if they weren't on campuses encouraging people to give to effective charities, so we haven't counted it as having a significant opportunity cost that would interest donors.

"Why does GWWC continue to do charity evaluation research? This seems to have very high overlap with GiveWell's operations, while GiveWell has a much larger staff, more organizational focus on it, and moves more money to their recommendations. Obviously GWWC and GiveWell's recommendations differ somewhat, but is it really worth maintaining a separate research team and splitting the focus of GWWC between outreach and research?"

I've given one possible answer to this in the thread below.

"Just to check that I understand the numbers properly, your actual cash spent in 2014 was £120,000 and your actual cash spent in 2015 is expected to be £220,000, correct? How was the budget divided up last year? "

That's roughly right, yes.

"How was the budget divided up last year?"

I haven't done that breakdown for 2014 yet, but it will be very similar to 2013, which was 80-85% salaries and intern expenses support, 10% office rent, and 5-10% materials.

"What's the source of the increase?"

It's overwhelmingly new staff. Salaries/office rent has also increased about 10% in the last year (reflecting inflation and older/more experienced hires).

"If it's more staff, what will they be doing?"

I'll leave this one for Michelle as she can give the clearest answer.

"If you didn't raise as much funds as you wanted, which projects would get cut first?"

We would have to have one less staff member, very likely cutting back our media, talk and support for chapters. Again I'll leave Michelle to give a more precise answer.

Hi Lark - until this year this hasn't been an issue. In the past unrestricted funds have been committed to projects ahead of time either as a fixed share of the total, or in proportion to restricted funding (which actually provides a sort of 'matching' of restricted donations).

This year unrestricted funds are going into a 'Trustees' Discretionary Fund'. This fund:

1. Can be used to ‘bail out’ projects in emergencies, though ideally it won’t be;
2. To kickstart new experiments with e.g. a six month runway;
3. To make grants to external and internal projects we think are awesome.

So it is possible that giving to GWWC will make it less likely that GWWC will draw money out of this TDF. However, I think it's fairly unlikely that GWWC will be so starved for cash that we will take that option; it's more likely that we would have 1 or 2 fewer staff than pull money out of the TDF. I also think that making sure CEA has money for new projects and grants is quite valuable. However if you thought i) GWWC was the only useful thing we were doing and ii) you thought GWWC's fundraising was likely to go very badly, then the issue you describe would be a consideration against giving.