Cross-posted to my blog.

UPDATE: Since I wrote this post before the winter fundraising season, I no longer have sufficiently good information about REG's funding situation to make claims about its room for more funding. I personally would not donate more money to REG without first learning more about how it could use additional funds.

I have received some interest from a few people in donating to REG, and the main concern I’ve heard has been about whether REG could effectively use additional funding. I spent some more time learning about this. My broad conclusion is roughly the same as I wrote previously: REG can probably make good use of an additional $100,000 or so, and perhaps more but with less confidence.

Poker Market Saturation

Tobias from REG claims that about 70% of high-earning poker players have heard of REG, although many of those have had only limited engagement. He claims that they have had the most success convincing players to join through personal contact, and REG has not had contact with many of the players who have heard of it. This gives some reason to be optimistic that REG can expand substantially among high-earning poker players, although I would not be surprised if it started hitting rapidly diminishing returns once it grows to about 2x its current size.

To date, REG has not spent much effort on marketing to non-high-earning poker players. This field is much larger, but targeting lower-earning players should be less efficient because each individual player donates less money. To get a better sense of how important this is, I would have to know what the income distribution looks like for poker players, and getting this information is nontrivial.

REG would like to hire a new marketing person with experience in the poker world. They would probably be considerably better at marketing than any of the current REG employees. For this reason, additional funds to REG may actually be more effective than past funds, although this is difficult to predict in advance.

New Plans and Expansion

REG has partnered with King’s Casino to get donations from poker tournaments. This fundraising model is less explored but has some potential. REG is also moving into marketing toward Daily Fantasy Sports (DFS) players. It’s unclear how valuable these new programs will be, but it’s plausible that they will produce about as many donations per dollar or hour invested as the original REG model. These programs have high learning value, so I am interested in funding REG to help it carry out these programs and see what kind of results they can get.

Then there are REG’s other expansion areas. It has plans to expand the model to a few other fields. The REG founders are putting some thought into choosing where to expand and they appear to be doing a good job making these choices, but even so, it’s difficult to predict in advance how receptive people in a new field will be to the REG message. There’s probably nothing special about poker players in particular, so I would expect similar fields to show comparable conversion rates. When considering that REG could expand into a lot of other fields, room for more funding starts to look like less of a concern. At the same time, the more different a field is from professional poker, the less confident we can be that the REG model will work well. DFS is sufficiently similar that I would expect the conversion rate to look about the same. For other fields REG may move into, like gaming and tennis, it’s harder to predict what the results would look like. Still, I would be surprised if conversion rates among tennis players were a lot worse than among poker players.

Daily Fantasy Sports

To get a stronger sense of REG’s room to expand, the obvious thing worth learning is the size of the DFS market. A report from Eilers Research claims that the size of the DFS market was $2.5 billion in 2015, and that DraftKings (who REG works with) has raised $76M in funding (suggesting a valuation of perhaps $300-600M). The market here is much larger than REG’s current capacity to direct donations, although we care more about the size of the market among high-earning players. This article claims “at least 5 daily fantasy professionals who have won tournaments for over $1,000,000 this year” which is not a lot, although it also claims that a lot more players than that have had large winnings. It doesn’t give any specific numbers or sources.

According to this interview, the online poker market was $2.2B as of about two years ago. This suggests that the DFS market is not much smaller than the poker market (although the $2.2B figure doesn’t include in-person poker–I couldn’t find good data on this). DFS will probably continue to grow, so it looks like REG’s expansion into DFS has reasonably good potential. My guess is that the poker market will result in more overall donations than DFS, but the difference is not large, so REG can probably get a lot of value from expanding into daily fantasy sports.

New York just declared that fantasy sports constitute illegal gambling. This makes the future of the DFS market look somewhat more uncertain. We can make up some numbers to get a rough idea of how important this is. Perhaps this reduces the size of the DFS market by 20% in expectation, and REG relies on DFS for 20% of its money moved in the medium term. That means this decision by New York makes REG look 4% worse. That’s nontrivial but not hugely concerning by itself.

Other Considerations

I have been impressed by REG’s openness and ability to answer my questions. When I asked Tobias about the size of the poker market, he had good information about the space and about how REG was positioned. He was optimistic about the room to expand within the poker space. I am somewhat skeptical about this claim because anyone at a charity is incentivized to believe that it can absorb a lot more money; but even if the professional poker space is close to saturation, REG has clear room to expand into other areas (such as partnering with casinos or applying the model to other fields such as daily fantasy sports). At this time I still feel confident recommending that small donors support REG.


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17 comments, sorted by Click to highlight new comments since: Today at 12:08 PM

Hi everyone, I'm the Executive Director at REG.

We have a very busy weekend coming up, a presentation in Cambridge and one in London, followed by meetings with several poker players and finance professionals who are interested in REG.

I hope to reply to many of these comments on Monday. Thanks everyone for your interest, and Michael for writing this great post!

If you're based in Cambridge or London and would like to chat in person this weekend, email me at

The analysis of the DFS market seems off to me

  1. I don't think the conversion rate is likely to be the same. High earning poker players are to some extent mini-celebrities and seem to have strong image consciousness and network frequently with others. By contrast, high earning DFS players seem to be private people with no public image, working alone or in small teams and with limited contact with wider world. I think marketing to those people would be significantly harder than to poker "stars".
  2. The New York declaration is a significant risk factor for the whole DFS sector. There is some degree of likelyhood that this declaration will lead to other states following suit, while the poker market is global the DFS market is obviously highly US based and there seems to be a significant risk of it being outlawed - or atleast outlawed within a significant number of US states. You seem to understate the size of this risk.

Extremely useful comment Alasdair. It'd be helpful to see a back of the envelope estimate of projected money moved from targeting a new niche (e.g. one of DFS/pro video gamers/finance professionals). This would highlight the relevant factors and potential failure points. If REG have developed such estimates internally it could be cool to share them.

Perhaps would be well suited for this, though I'm not sure.

  1. That's a good point. It's hard to predict how important of a factor that would be, but it's plausible that it could make raising money among DFS players substantially harder.
  2. Do you believe the recent New York declaration reduces the expected size of the DFS market by more than 20%? 20% seems reasonable to me.

I don't know about whether the NY declaration reduces the market by that amount itself. I more see it as an indication of the serious challenges and uncertainties that the DFS market faces in the US.

For example, one DFS operator has ceased US operations in all but 4 states where DFS has explicit state laws allowing it: ( which i found on google has a lot more in depth look at the battles going on all across US on this)

It is clearly a live issue and one clouded with a great deal of legal uncertainty, which I think would benefit from a closer cost/benefit analysis if REG wanted to target this market seriously.

which I think would benefit from a closer cost/benefit analysis if REG wanted to target this market seriously.

I agree. There are still a lot of unanswered questions. I can certainly see why Holden and Elie quit their jobs to work on this full time.

Does REG not have any full time employees? I am very impressed in their progress if that is the case as I presumed they did!

Sorry that's not what I meant to imply, I was saying that figuring out how much good REG is likely to do takes a lot of work and I still have a lot of unanswered questions, and I'm tempted to quit school/work and investigate charities full time.

I think that the recent issues surrounding DFS are significant. Luckily, not a huge amount of time has gone into networking and other work in DFS yet. I'm hopeful that we can explore our personal connections further in this area, and get a better idea of the next things to do without investing a lot of time.

I'm more excited about our work that just started in trading and finance. This is an area with an enormous number of people with a lot of resources.

This looks promising potentially. Does REG have an itemised expansion budget it can share, either with potential donors or publicly? Is it possible to see accounts detailing expenditure over the last year or two?

At this time I still feel confident recommending that small donors support REG.

How small is "small donor" here?

Someone donating $100K to REG would push it to the point where I don't feel confident that additional funding would be valuable. My purpose in referring to "small donors" here was that REG is a small organization and might not have much RFMF, so one very wealthy person could quickly exhaust its RFMF. I think that would be a great thing to do, of course, but I wouldn't be as bullish on REG anymore afterward.

I largely agree with Evan's analysis.

Michael said he has strong confidence REG can easily absorb $100k USD to fund scaling their programs, and perhaps greater than that, but with not as much confidence beyond $100k USD. Plausibly, we could do some reference class forecasting to figure out what a typical effective donor donates, and how many donors to REG at a given level. Then, we could estimate the number of donors who will shift their donations to REG based on this and the last of Michael's posts about cause selection.

From that, you could figure out if you qualify as a small donor or not, and estimate how many other small donors there will be in the near future, say, by the end of 2015, or over the next six months. If based on the estimates, you don't expect the $100k USD to be donated to REG without your intervention, then you could likely donate all of your donation budget without needing to worry. Otherwise, you could donate a certain portion of your donation budget now, wait to see if the room for more funding for REG is filled by other donors over some interval of time, and if not, donate the rest of your budget later.

I'm going to try doing some rough calculations here. This is my first attempt at reference class forecasting, so bear with me. Feel free to downvote this comment or respond with criticism if the below analysis sucks. I'll try to make my assumptions clear throughout, so you can decide for yourself if they're reasonable or not.

How much does one of us typically give?

From the results of the 2014 EA Survey, I discovered the median donation for survey-takers was $450.00 USD, in 2013 dollars. To fill a RfMF budget of $100k USD, if each donor gave $450 to REG, that would take 222 donors to fill. That seems like more than will actually donate, so, that seems a lower number than the upper bound for "small donor". Note the last EA survey was completed less than optimally, and was conducted gauging 2013 donations, a time when even more of us were students or starting out our careers, so had less money than donate.

To qualify for the top 30% of survey-takers for money donated, one had to donate $1.5k. It would take 66 donors giving that amount to fill a $100k RfMF budget. The top 20% of survey-takers donated at least $3.2k. It would take 31 donors giving at that level to fill a $100k RfMF budget.

The average of $1.5k and $3.2k is $2.35k. I'm not bothering to go into the raw data right now, so I'm assuming $2.35k is the amount needed to be donated to be considered in the top 25% of effective altruists in terms of money donated.

At the level of $2.35k, it would take 42 donors to fill a $100k RfMF budget. It seems plausible that many donors could give to REG, although some will give much more than that, and some will give much less than that. This is just an intution, but a few thousands dollars feels like it constitutes what a "small donor" is, so I'll go with the number $2.35k from here out.

How many donors at this level are there for REG?

I looked up effective charities from the EA survey, particularly community metacharities, to see if I could find one similar to size to REG. The closest one I've found is ACE. ACE currently has five paid staff, and REG has four. However, the best recent data for how much money ACE received is for 2014, when they only had 4 paid staff at most, since they hired Jacy Anthis as a researcher only this year. So, the ACE of 2014 seems comparable to the REG of the present. I'm using ACE as a point of reference for REG because I can't currently there isn't any data from REG about how many major donors they've had, and what their expenses have been over the course of a whole year, either 2014 or 2015.

In 2014, ACE had expenses of ~$90k USD. That's nice, because it's also close to the $100k we're thinking about, in terms of funding REG can absorb without plausibly hitting RfMF issues.

A top donor to ACE is someone who made a major gift to ACE of =>$1k USD to ACE. In 2014, 22 individual donors constituted those who made major gifts. In 2014, ACE received $170k in donations, virtually all of it from individual donors rather than foundations. If we make the assumption all that money came from major donors, that's a mean donation of ~$7.7k per major donor. However, ACE had expenses of only ~$90k for 2014. So, only $4.1k of the mean donation from major donors was used by ACE last year. That leaves $3.6k per the average major donor to ACE whose donations were unused in 2014. I'm guessing they just rolled over to the 2015 budget and expenses.

That is still more than the $2.35k one would need to donate to be in the top 25% of donors in the EA community.

At $7.7k per mean major donor, it would take 12 donors to fill a $100k RfMF budget. If $4.1k was used, and the rest shelved, it would take 24 donors to fill that same budget. 24 is close to 22, the number of major donors ACE had in 2014.

If a small donor is one who donates less than $5,000 per year, and typically donates between $2000 and $4000, then it would take between 20 and 40 donors to fill up a $100k USD RfMF budget.

It seems to me the average donor to REG who donates more than $1,000 will donate some amount in the window of $2k-$4k. In 2014, ACE was an organization of very similar size, which actually had expenses close to $100k. They had 22 major donors. In the absence of Michael Dickens urging more donors to donate at this level to REG, I expect REG wouldn't have more than roughly this number of donors at this "small donor" level.

At this point, if you're planning on donating less than $5k over the next 12 months, I'd estimate it's safe to donate all that to REG, without coordinating with all the other donors, and that money wouldn't be wasted by REG.

How much does or will Buck donate?

The closest reference class for Buck_2015 is Buck_2014. In 2014, Buck donated $6060, primarily to metacharities. If we assume Buck donates the same amount in 2015 he donated in 2014, and we account for the $2500 Buck already donated to MIRI in 2015, it seems Buck would an additional $3500 for the remainder of 2015.

Based on prior assumptions and calculations, it seems Buck would be able to donate that much to REG without worry REG couldn't use that money in the next year.

How many more people will donate to REG, who otherwise wouldn't, on the basis of Michael's recommendation?

Ask Michael.


*Someone who gives less than $5k is considered a "small donor". As of the 2014 EA survey, this appears to be at a level above what 80% of EAs donated.

*In the absence of Michael's recommendations, based on a similar track record from ACE in 2014, I'd expect between 20 and 30 donors to donate at a level of $2k-$5k to REG.

*We know it would take between 30 and 40 donors at this level to to fill REG's expected $100k USD RfMF budget.

*If Michael Dickens can confirm he expects less than 10 additional people (besides yourself) will donate between $2k-$5k to REG in the next year on the basis of his recommendations, than it seems safe for you to donate an amount in that interval to REG without worry.

*In particular, if you're Buck, and you're inclined to, it seems you can donate an amount of money in the interval of $2k-$5k, i.e., your expected remaining donation budget for 2015, to REG, without worry.

I feel like this is a basic confusion on my part, but wouldn't it be better to delay until the end of REG's fundraising period, i.e. when they are making spending decisions for the next year, and then top them off in explicit coordination with other EAs thinking about this? Like, RfMF should be an easily solved problem in cases with a friendly/communicative nonprofit and a donorbase explicitly discussing RfMF with each other.

How much does or will Buck donate?

Buck has stated that he plans to donate ~40,000 dollars this year, although that might not be true anymore.

I didn't know they were running a fundraiser, but yeah, waiting until it's over makes the most sense. Coordination itself is difficult, so the above was an experiment in trying to figure out what do when coordination doesn't seem feasible over a given time period, which seems possible. Denis Drescher and I have been discussing attempts to coordinate donors, and we actually intend to post on the EA Forum soon a discussion where donors can register their upcoming donations for the remainder of 2015, across all EA meta-charities.

I plan to donate about $38k more this year, but I appreciate your guessing :)

My reference Buck forecasting isn't very good :/

My analysis applies to small donors who aren't you, then. Alex commented to wait until after any upcoming fundraisers to then donate to REG and see if they have a funding gap. I think my analysis might still apply to you, we just need to scale how much RfMF you would take up. I think donating all $38k to REG at this point alone would be a mistake. I'm guessing Michael won't actually convince ten people to donate a couple thousand dollars apiece to REG, but maybe five people. I'd guess you could donate $20k to REG right now, and it would still be safe. That is, you wouldn't displace anyone who would've otherwise donated to REG, and then has to do a bunch more work to figure out where to donate to next.

Of course, I don't recommend just donating $20k to REG anyway. You would at least want to talk to them first, or perhaps be one of the matchers in a donation matching fundraiser. $38k is enough money you could do a lot with that, and there are enough projects who could use more money but not tons it might even make sense to donate that money in two or three chunks to two or three different effective charities. I'm sure you've already been thinking about this, though.

Also, if you expect you'll be able to donate at least five figures each year for many years in a row, consider contacting Tyler Alterman by joining as a funder at EA Ventures. That's a sizable amount of money you can donate, and becoming part of the EA Ventures network outsources spotting great funding opportunities you might otherwise miss to a team working on that goal full-time.