## Effective Altruism ForumEA Forum

jh

Jonathan Harris, PhD | jonathan@total-portfolio.org

Total Portfolio Project's goal is to help altruistic investors prioritize the most impactful funding opportunities, whether that means grants, investing to give or impact investments. Projects we've completed range from theoretical research (like in this post), to advising on high impact investment deals, to strategic research on balancing give now versus later for new major donors.

# Topic Contributions

New Organization Idea: HedgEverything

Thanks for putting this idea out there, Michael!

I have several questions, all in the spirit of helping you sharpen up the idea:

• Why a loan product? Is that to mimic cat bonds? Standard insurance (just pay the premiums) would be even easier for the client wouldn't it?
• It seems to me that existing players (banks, FTX) have a strong competitive advantage in formally creating new products. Perhaps this organization could have more value add as an advisory/intermediary. Helping clients implement and manage such strategies (part of which may include helping with design/specification of the products). Have you considered that?
• On profit-seeking, if there was big enough demand out there, wouldn't prediction markets be bigger already?

Happy to talk offline too. But I do like seeing open discussion of these ideas on the forum. Whatever input you get on this post will hopefully be useful for others considering similar ideas. For now mission-correlated investing and related ideas seem mostly academic (and perhaps private/secret). If you find otherwise it would be exciting to see that shared.

Mission-correlated investing

Thanks for checking and sharing that update, Pablo!

By the way, I expect to see 'mission hedging' continue to be the most 'commonly' used term in this area because this is arguably the right way to describe the AI portfolio Open Philanthropy has publicly mentioned considering. That is, if we label short AI timelines as a bad thing, then this is 'hedging'. Still, I do like to put it in the overall 'mission-correlated' bucket so we remember that the key bet with this portfolio is that short timelines lead to higher cost-effectiveness (i.e. we're betting timelines and cost-effectiveness are correlated).

Mission-correlated investing

So, obviously you and Pablo surely have a better sense of what is desired on the Forum/Wiki in general. I am just going based on intuition.

If this is important it would be helpful to know in more detail what place original research is supposed to have on Forum/Wiki. The same with  summaries of existing research. Is a series of 'original research' EA Forum posts on mission-correlated investing acceptable? Then as the 'mission-correlated investing' Wiki tag summarizes these posts it is a summary of existing research.

Mission-correlated investing

That's an interesting point you make. I think you might have mistaken 'mission-correlated investing' as a replacement/equivalent for 'mission hedging'? Rather, the latter is a subset of the former.

For the record, some other relevant points:

i. The orders of magnitude of hits for 'mission hedging' needs to be taken with a pinch of salt. It doesn't look to me like it's thousands of people talking about mission hedging. Rather it's thousands of crossposts and similar listings, as well as false hits.

ii. When I created this tag (as 'mission hedging') there was no tag. 3 years or so after Hauke's original article. This isn't a strong indication of EA attachment to the term.

iii. It was then correctly pointed out to me by an astute forum member that 'mission hedging' is only a good term for a subset of strategies which match the underlying idea ('invest to have more money when it will be more valuable'). 'Mission-correlated investing' is a natural term to capture the whole idea (though suggestions for catchier terms would be welcome). Hence I updated the tag to 'mission-correlated investing'.

iv. My categorization of the 9 posts currently linked to the term would be 5 'mission-correlated investing', 3 strictly 'mission hedging', 1 ambiguous. So, if we were to add a 'mission hedging' tag as well, it would have 3-4 posts.

v. My intuitions when creating this tag, and refining it to be 'mission-correlated investing', were that it's helpful to have a tag that collects all posts related to this 'niche' and that it's helpful to bring all people who are thinking about these ideas together. Whether they're not experts and have only heard about 'mission hedging' so far, or if they're really into it and considering all angles of 'mission-correlated investing'.

vi. I would say I'm in regular contact with the other main existing authors on 'mission hedging'/'mission-correlated investing'. I'd be really excited to know if there were secretly a ton of people who are actively mission hedging. It would be great for them to share what they are doing and with enough posts this would justify using the term.

Mission-correlated investing

Thanks Stefan! The definition before was hard to parse. I've updated it and hope it's better now.

I'm not sure I agree about mission hedging being more intuitive. Perhaps, especially if 'investing in evil to do more good' is intuitive or memorable. But how many people who have read early articles about mission hedging would be able to point out it both increases the expected value of good done and decreases the variance?

If what is intuitive is 'investing to have more money in worlds where money is more valuable' then that is mission-correlated investing.

I agree examples are important. There are now more posts with examples so hopefully that helps.

Mission correlation, more than just hedging

Thank you Wayne and Michael for the helpful nudges and encouragement.

I agree that the table at the bottom of the post was at best ambiguous. I have now deleted it from this post, revised it and turned it into this new post with several examples.

This current post then, without the table, remains to make the point that 'mission hedging' is just a subset of 'mission correlated investing'. And that mission correlation research needs to focus on forecasting cost-effectiveness, not whether the world is 'good' or 'bad'.

Mission correlation, more than just hedging

Thanks for the kind words, Ramiro. Yes, it's on my to do list both to write more short posts on the key ideas in that paper (in posts) and to revise it to make it easier to follow (it's too ambitious).

The Future Fund’s Project Ideas Competition

(I drafted this then realized that it is largely the same as Zac's comment above - so I've strong upvoted that comment and I'm posting here in case my take on it is useful.)

Crowding in other funding

We're excited to see ideas for structuring projects in our areas of interest that leverage our funds by aligning with the tastes of other funders and investors. While we are excited about spending billions of dollars on the best projects we can find, we're also excited to include other funders and investors in the journey of helping these projects scale in the best way possible. We would like to maximize the chance that other sources of funding come in. Some projects are inherently widely attractive and some others are only ever likely to attract (or want) longtermist funding. But, we expect that there are many projects where one or more general mechanisms can be applied to crowd in other funding. This may include:

• Offering financial incentives (e.g. advanced market commitments)
• Highlighting financial potential in major projects we would like to see (e.g. especially projects of the scale of the Grok / Brookfield bid for AGL)
• Portfolio structures / financial engineering (e.g. Bridge Bio)
• Appealing to social preferences (e.g. highlight points of 'common sense' overlap between longtermist views and ESG)
The Future Fund’s Project Ideas Competition

Investment strategies for longtermist funders

Research That Can Help Us Improve, Epistemic Institutions, Economic growth

Because of their non-standard goals, longtermist funders should arguably follow investment strategies that differ from standard best practices in investing. Longtermists place unusual value on certain scenarios and may have different views of how the future is likely to play out.

We'd be excited to see projects that make a contribution towards producing a pipeline of actionable recommendations in this regard. We think this is mostly a matter of combining a knowledge of finance with detailed views of the future for our areas of interest (i.e. forecasts for different scenarios with a focus on how giving opportunities may change and the associated financial winners/losers). There is a huge amount of room for research on these topics. Useful contributions could be made by research that develops these views of the future in a financially-relevant way, practical analysis of existing or potential financial instruments, and work to improve coordination on these topics.

Some of the ways the strategies of altruistic funders may differ include:

• Mission-correlated investing. That is, making investments such that they end up with more money in worlds where money is relatively more valuable. This increases the expected amount of good done. In some cases, but not all, it will also reduce the variance in the amount of good done ('mission hedging').
• Non-standard views on expected financial returns. Longtermist investors should arguably have non-standard attitudes toward and definitions of risk (including correlation with other longtermists). This could make certain investments more attractive. In addition, if altruistic research suggests more accurate views of the future this may also be a useful source of excess returns. Furthermore, longtermists may want to operate with a discount rate that differs from normal (either more or less patient).
• As is already part of our approach, some investments may also generate impact of their own or have strategic value via developing relationships in new areas.

Note: This builds on an idea from a recent post by Holden Karnofsky. However, I don't see it in your current project ideas list nor in the other comments here.

Cost Effectiveness of Climate Change Interventions

Also, if you combine $1/ton with the estimated lives per ton from Bressler's paper, then you get$4,400 per life saved.