Making large donation decisions as a person focused on direct work

by Ben_Kuhn3 min read27th Dec 202116 comments

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Donation choiceGrantmakingEarning to give
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I've been thinking about what to do with my personal donations again this year and am curious for other people's thoughts. (On the meta-question of how to decide, not on the object-level question of where to donate.)

Since I joined Wave, I've mostly been donating to a DAF, on the reasoning that properly deciding where to give takes a long time and is distracting, and most of my positive impact on the world comes from working on Wave so it's better to spend my time optimizing that.

I still think that's true, but also the DAF balance is now ~2x my gross salary even before this year's donation, and I expect the above reasoning to stay true for the next 5 years, so it seems like I should probably bite the bullet and make an actual decision.

One idea would be to find someone else who I think is very aligned with how I'd think about where to give and delegate the decisionmaking to them as, effectively, a grantmaker. But the wonderful thing about the EA community is that the people I would trust the most with this are already doing that for people with >1000x more money than me :)

That leaves me with a few other options:

  1. I could give to whatever my current best-guess donation opportunity is, with the understanding that my current best guess isn't very good because I haven't put much time into it.

    I'm not a huge fan of this option because YOLOing a donation that's >2x my gross salary feels silly. But if it's small relative to my overall impact on the world, maybe it's the right call anyway!
  2. I could put a lot more time into donation research (as a "side project" type thing) so that my best-guess donation is actually a good guess.

    I'm not a huge fan of this option because it doesn't feel like my comparative advantage and I don't like (and am not good at) splitting my focus like this.

    If EA is vetting-constrained, then plausibly even though it doesn't feel like my comparative advantage, it's useful to the community if I spend time vetting things. But my impression from my brief stint in EA funds was that the funds felt more good-opportunity-constrained than vetting-constrained, and I don't feel as well-positioned to address that bottleneck.
  3. Instead of making one big donation decision, I could do some sort of microgrant type thing (example). It feels less bad to YOLO a large number of small grants than a single large one. The hard part here would be figuring out how to source the grant opportunities. If EA funds are good-opportunity-constrained, it's not clear how I would do better.
  4. I could take a bet on less trusted/proven people as grantmakers—allocating some fraction of the DAF for them to decide the donation target and spending some amount of time with them to make sure we're aligned etc.

    This seems plausibly interesting, but I'm not sure where to start, nor if there's a model for this that would actually make it a reasonable use of time for a person/people who were good enough that I would also be happy to have them be grantmakers.

Some other random thoughts:

  • I think part of my instinct that "I should try really hard to optimize what I do with this money" comes from the fact that it's way more money than I've ever spent on myself, and for personal spending, I try pretty hard to optimize spending decisions that are a lot less than this. Possibly this means that I should try less hard to optimize my personal spending (and spend relatively more on myself).
  • Another contributing factor might be that, because it seems clear that working at Wave is an unusually good personal fit for what I'm good at and how I operate (I'd spitball ~10x better on that dimension than the next best thing I could do), I've been able to get away without thinking very hard about cause prioritization for a long time, and that part of my problem is that it's pretty hard to delegate thinking about cause prioritization specifically.

I'm curious if anyone else has experienced the same dilemma (maybe unlikely since I think Wave pays unusually high salaries for a role focused on direct work), or has suggestions or opinions!

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One idea that isn't on your list is to start a "donor circle". I found this really powerful in the past, and I'd greatly like to do again in the future!

My previous "donor circle" experience was for making a ~$10k  grant near the start of COVID: I got a few dozen other friends on board who also wanted to give $1k-$100k each, and we all started a messenger chat and a spreadsheet to look through various opportunities.

Everyone contributed as much research manpower as they wanted; one person stepped up with "co-lead" level of involvement, but many others contributed as well. Together we identified a whole bunch of opportunities, came up with criteria, and made "recommendations" that the less-research-involved members of the circle then followed as they saw fit. Overall we ended up collectively giving about $400k, which was a size at which it felt really worthwhile for ~2-4 people to do a "side project" for.

(see writeup here: https://forum.effectivealtruism.org/posts/opdMXibKjkoL69s96/prioritizing-covid-19-interventions-and-individual-donations). 

Some things that were really cool were:

(1) once you're (collectively) a >$100k donor, you can get on the phone with people who might not otherwise give you time, and donate to groups that aren't taking "normal-person-sized" donation. E.g. a representative from CEPI was willing to spend time with us, and CEPI is mostly courting >$1m donations.

(2) our writeup and criteria ended up influencing a medium-sized foundation; their decisions >$10m in grants used our list of criteria as a rubric. 

(3) the presence of others who were excited to use my recommendations made it feel more directly socially rewarding and valuable to spend time on the project.


I think this works best when everyone in the donor circle agrees up-front on approximate "type" of opportunity the group is looking for, or criteria, or something like that.

I'm not sure when exactly a donor circle is the right strategy, but in general I do think that banding together with others, and building strong "working relationships" with other practitioners,  is really important for any meaningful endeavor.

Separately but somewhat relatedly: Having worked at Open Phil, it's definitely the case that smaller opportunities just don't clear the bar of being worth spending time vetting. I think a powerful way that "individual" donors can contribute is in helping get small things "off the ground", so that they can grow to a size where they're later in the right range for large institutional donors. In that sense it's  bit like angel investing.

As the person who became Catherine's co-lead on this project, I just want to second everything she says above. I found being a part of this donor circle to be a really amazing experience, and I agree that because of our nimble structure and specific focus we were able to find opportunities that other people hadn't picked up on. For example, we were among the earliest supporters of Fast Grants, and we also provided critical early support for a global initiative to synthesize evidence about COVID that eventually attracted a $1M grant from the Canadian government in no small part because of our investment.

For what it's worth, I'm personally quite excited about the value of doing more of this kind of networked philanthropic advising  and am pretty sure it's going to be a major focus of the second half of my career, so I'd be happy to explore collaborating  with you and anyone else in a similar-ish position.

Does your direct work give you access to knowledge that others don't have? Even if you are not a professional grantmaker in your cause area, you might still have lots of expertise. If your current best-guess donation opportunity is based on that knowledge, it might be quite a good guess, and maybe better than many individual donors. That's why I like it that some staff members of open philanthropy project tell where they donate.

As someone who does not do direct work and wants to donate thoughtfully, domain knowledge is something I miss a lot. I cannot be an expert in my priority cause area, no matter how much I would love to.

I'm not a huge fan of this option because it doesn't feel like my comparative advantage and I don't like (and am not good at) splitting my focus like this.

I agree attention is a thing.

I came here to say this: you have a relatively unique work position relative to most EAs, and are likely to be unusually good at identifying opportunities in countries Wave is located in.

This must be somewhat true but FWIW, I think it's probably less true than most outsiders would expect—I don't spend very much personal time on in-country stuff (because I have coworkers who are local to those countries who will do a much better job than I could) and so end up having pretty limited (and random/biased) context on what's going on!

I think that still ends up net good if your biases are decorrelated from existing grantmaker biases? 

Have you considered a donor lottery? It seems specifically designed to address this problem.

Maybe you are planning to donate enough money that the lottery at its current size  would be pointless. If that's the case, I wouldn't be surprised to learn that someone is willing to backstop a larger one time lottery.

Re: taking a chance on a less experienced grantmaker, it seems like you have two particular assets relative to many other people in EA:

(1) You have experience hiring people, and

(2) You're relatively well-connected

You might be particularly well-placed to hire someone on a short contract to recommend you some good donation opportunities. I can imagine you being able to hire the right person and ask/pay people to help mentor them as well. If they did well, you could recommend them to your friends for a similar service, or perhaps they'd go on to work at another EA organisation. If they did poorly, you simply wouldn't take their recommendations.

But there's a nice potential upside of finding both a talented new grantmaker and some good new donation opportunities, and if anyone can pull it off, you can.

(Somewhat unrelated to my other comment)

How clear are you on your cause prioritization? If you know your cause area, you might just defer to a charity evaluator. (It sounds boring and too easy for so much money, but it might be the best way to go for many individuals). Obviously this does not work if you don't know your cause area or your cause area does not have charity evaluators (yet!).

“ I could take a bet on less trusted/proven people as grantmakers.”

I was thinking just yesterday that if I won the EA lottery this might be a cool thing to do - I think the value of giving a “future grantmaker” the opportunity would be high and then I would guess that their end decision wouldn’t be much worse than your punt/GiveWell charities.

To find this person and minimise time spent on it, I might ask local group organisers who the most promising “future grantmakers” are and then filter by underrepresented groups in EA or just pick one of the shortlist at random. Others could say if this is at all realistic!

A separate comment is that I get the impression you would have a different perspective to other grantmakers so I would be excited to see what you would fund if you did decide to put some time in.

 Training for Good is currently developing a training programme for aspiring EA grantmakers. Although it's still in development, we're hoping that the programme will end with a "capstone project" in which trainees make real grant allocations (funded by external donors). This would give donors the opportunity to support future grantmakers.

I've sent you a PM about this but keen to chat with anyone else that might be interested.

Some quick thoughts:

1. Kudos for donating that much, even with a direct work position.

2. I've been helping out Patrick a bit, and wound up deciding between Longview and EA Funds. Both seem pretty strong and like they could absorb more money. If you don't want to spend too much time on deciding, these seem pretty safe. (Note that longview is longtermist)

3. EA is vetting constrained, and I'd guess you would be better than many at vetting (particularly those who aren't currently funders). I'd be curious what you'd come up with if you were to spend time on this. I could easily see your work doing research being valuable at $400-1k/hr or so. That said, you could also do this without money attached, and just post your thoughts to the EA Forum (sort of like Larks does)

4. After spending some time around the funding space... I don't see any really amazing wins that the existing funders aren't doing. I'd love to see more strong full-time funders (which would lessen the vetting constraints), but it's tough to donate to this as a cause itself.

5. Microgrants in areas that EA Funds covers seem unnecessary; I think they'll be hard to beat for longtermism+infrastructure at least. Maybe they could be useful in other areas.

6. I think long-standing programs are much more exciting than 1-time efforts, at this point, even if the rates of donations are lower. (Donating to a fund, lump-sum is fine though)

I could take a bet on less trusted/proven people as grantmakers

I'd really like to see more work here. The real bet is betting them as future grantmakers. We could probably use more solid people doing grantmaking work, especially because that will build up skills and evidence for them to do future, larger grantmaking work. That said, it's not clear who exactly is both good enough, and interested in spending a lot of time on this. Finding the person/group might be pretty challenging. (Note that if you do find them, and they seem good, others might also be likely to fund them as well).

I'd guess you would be better than many at vetting

 

I agree with this!

I'm not a huge fan of this option because it doesn't feel like my comparative advantage and I don't like (and am not good at) splitting my focus like this.

If EA is vetting-constrained, then plausibly even though it doesn't feel like my comparative advantage, it's useful to the community if I spend time vetting things. But my impression from my brief stint in EA funds was that the funds felt more good-opportunity-constrained than vetting-constrained, and I don't feel as well-positioned to address that bottleneck.

I'm in a similar position and I largely agree with this. One loophole is that I have a large set of friends who I might trust instinctively but that EA Funds'd need substantial convincing. With a little advertising I might be able to find projects that are below even EAF's very-low barrier-to-entry.  

I haven't tried this out yet, though I've a colleague who seems to have had a good experience with it. 

I'm curious if anyone else has experienced the same dilemma (maybe unlikely since I think Wave pays unusually high salaries for a role focused on direct work)

FWIW I'm in a similar position, largely because I did well in tech and have had some significant asset growth after I started doing direct work.

In addition to things you've mentioned, I've considered just funding a large fraction of Rethink's/my team's funding gap, though I'm confused about the epistemics/community virtues of donating to an employer [1] I've also considered just funding individuals who I feel really positive about giving money to and the existing sources aren't (yet) funding[2], but a) if I don't lower the bar, I only come across a few of these opportunities a year and b) if I do lower the bar, I worry about unpleasantness in friendships [3]

  1. ^

    If you have decently strong inside views about Wave's future valuation/moral impact, can you do the same thing by re-investing in Wave?

  2. ^

    I think I almost certainly should have moved faster in every case where I seriously considered it.

  3. ^

    "once you become known as a philanthropist, you can never tell a bad joke."