Epistemic status: Confident that the effect is real, though likely smaller than suggested by the toy-model.

Summary

Small donors should discount the cost effectiveness of their donations to interventions above a large funder’s bar if

they expect the large funder not to have spent all their capital by the time of AGI’s arrival^[1]^[2]
their donation to interventions above the large funder’s bar funges with the large funder.

In this post I describe a toy model to calculate how much to discount due to this effect.

I apply the model to a guess of Open Philanthropy’s spending on Global Health and Development (GHD) with Metaculus’ AGI timelines (25% by 2029, 50% by 2039). The model implies that small donors should consider interventions above OP's GHD bar, e.g. GiveWell's top charities, are only 55% as cost effective as the small donors first thought. For shorter AGI timelines (25% by 2027, 50% by 2030) this factor is around 35%.

I use OP's GHD spending as an example because of their clarity around funding rate and bar for interventions. This discount factor would be larger if one funges with 'patient' philanthropic funds (such as The Patient Philanthropy Fund).

This effect is a corollary of the result that most donor's AGI timelines (e.g. deferral to Metaculus) imply that the community spend at a greater rate. When a small donor funges with a large donor (and saves them spending themselves), the community's spending rate is effectively lowered (compared to when the small donor does not funge).

This effect occurs when a small donor has shorter timelines than a large funder, or the large funder is not spending at a sufficiently high rate. In the latter case, small donors - by donating to interventions below the large funder's bar - are effectively correcting the community's implicit bar for funding.

Toy model

Suppose you have the choice of donating to one of two interventions, $A$ which gives $a$ utils per $, or $B$ , which gives $b$ utils per $. Suppose further that the available interventions remain the same every year and that both have room for funding this year.

A large funder $F$ will ensure that $A$ is fully funded this year, so if you donate $1 to $A$ , then $F$ , effectively, has $1 more to donate in the future. I suppose that $F$ only ever donates to (opportunities as good as) $A$ .

I ...

Consequences of AI timelines

Further reading