What you describe is roughly how we decide each Recommended Charity Fund distribution, but unfortunately recommendation decisions have more complexity. Some examples of this complexity include ACE influencing significantly more funding than we distribute directly, this influence varying by charity, and it being especially difficult to estimate for charities we haven't recommended before.

So far, we've estimated cost-effectiveness for specific programs, not a charity's overall cost-effectiveness, so comparisons are relative to those programs. For THL's plans to expand the Open Wing Alliance, for instance, we assessed the cost-effectiveness (and theory of change) of the OWA itself, not THL's overall cost-effectiveness.

Overall, I largely agree, and we already do what you're suggesting in some cases, though not this one. For these reasons and others, I'm not sure investigating the marginal cost-effectiveness of OWA Europe and Africa specifically would have been the best use of limited evaluation time, but we do that kind of analysis when we think it's decision-relevant.

ACE has been putting more emphasis on selecting programs for cost-effectiveness (and theory of change) analysis based on marginal plans and how likely we are fund them to, so we are estimating marginal cost-effectiveness.

That being said, I don't think our methods in 2025 were far off from where they are now. We continue to think that current cost-effectiveness can be the best proxy for marginal future cost-effectiveness in many cases, and that focusing narrowly on where we predict our funding will be going would a mistake.

For example, The Humane League's future plans are a prioritized list of 24 ways that they would expand with additional funding. Not only is it not feasible for us to construct so many forward-looking CEAs, but the resulting estimates would also carry higher uncertainty. Additionally, many plans are expansions of existing programs or are general operational investments, which depend on current cost-effectiveness.

Funding is also fungible; dollars we direct to THL won't cleanly fund items 1-3 versus 4-6 on the list. Actual deployment depends on what other funders do, internal decisions, and new opportunities that emerge. Trying to predict which specific items our marginal dollar pays for is false precision, and we've seen charities greatly change their marginal plans within the two-year span of their recommendation.

Instead, we use a mix of current cost-effectiveness, our understanding of potential diminishing returns, qualitative judgments about effectiveness and strategic prioritization, and speculative, forward-looking CEAs to make our decisions. Current cost-effectiveness captures an organization's demonstrated ability to convert dollars into outcomes and that is often what is most likely to carry over to the next dollar. Large shifts in marginal productivity is likely low, especially for established orgs running stable programs with strong prioritization, so current cost-effectiveness is usually within a reasonable range of marginal future cost-effectiveness.

Huge thanks to Lizka for the portrait reward!