Announcing the 2017 donor lottery

I can understand that a winner selecting a non-EA cause might end up having to convince CEA of their decision,

See Sam's comment below:

"to emphasise this, as CEA is running this lottery for the benefit of the community, it's important for the community to have confidence that CEA will follow their recommendations (otherwise people might be reticent to participate). So, to be clear, while CEA makes the final call on the grant, unless there's a good reason not to (see the 'Caveats and Limitations' section on the EA.org Lotteries page) we'll do our best to follow a donor's recommendation, even if it's to a recipient that wouldn't normally be thought of as a strictly EA."

Are there advocacy-related reasons for donating directly to charities instead of joining such a lottery?

One data point: last year Jacob Steinhardt put a majority of his donations into the lottery for expected direct impact, and then allocated the remainder himself for practice donating and signaling value.

2) Are there advocacy-related reasons for donating directly to charities instead of joining such a lottery? For example, if I'm trying to increase my impact by convincing others to join EA, and someone asks where I donate, there seems to be a cost associated with describing a complicated lottery scheme that may end up with my money going to a cause that I think is ineffective or possibly even bad

Yes, but on the other hand, the audacity of the scheme will surely get some attention, and those who are attracted by it will probably be intelligent, analytical types.

It's not clear to me how a donor lottery would capture all the considerations. Can you elaborate?

In this case, you haven't found an advisor who you trust to take into account all the things you consider to be relevant. So, instead of relying on a third-party advisor, you do the research yourself. As research is costly for any given individual to undertake, it may not make sense for you to do this with a smaller donations, but with the larger pot, if you win, you've got more incentive to undertake whatever research you feel is necessary (i.e. that 'captures the relevant considerations').

Does this presume that (some) donors already know where they prefer to donate, rather than offsetting time spent on additional research with a larger donation pool?

It's just meant to illustrate that the value of the amount that you would be able to grant to a preferred organization is the same in expectation whether you participate in the lottery or donate directly. The lottery then may generate additional upside, potentially increasing the effectiveness of your donation if you do more research, and also giving you access to different funding opportunities (providing seed funding for an organization, donating to organizations that have a minimum donation threshold etc)

Is there an expectation (or requirement) that the winning donor provides a write-up of their research and reasoning for their selected charity?

[updated — see more in the discussion below]

We think that it's in the spirit of the lottery that someone who does useful research that would be of interest to other donors should publish it (or give permission for CEA to publish their grant recommendation). Also, if they convince others to donate then they'll be causing additional grants to go to their preferred organization(s). We'll strongly encourage winners to do so, however, in the interests of keeping the barriers to entry low, we haven't made it a hard requirement.

Yes, we can take donations in cryptocurrency (it's worth noting that donating appreciated assets can have tax advantages over converting and donating in fiat). We're in the process of figuring out a solution that allows you to do this directly via the website, but for now if you want to donate in crypto please email lottery[at]effectivealtruism[dot]org and we can discuss

An update on this: Cryptocurrency donations are now live on the site, so you can now enter the lottery (or make a regular donation to EA Funds) using BTC, ETH and LTC

there seems to be a strong cultural norm in my country against allowing lottery winners to remain anonymous... This is not the case in Europe, where it is far more common for lottery winners to remain anonymous. When the rules for anonymity were being drafted, was any thought given to this issue?

If a lottery organization is conducting a draw itself, and could rig the draw, publishing the winner's identity allows people to detect fraud, e.g. if the lottery commissioner's family members keep winning that would indicate skulduggery. I think this is the usual reason for requiring publicity. Did you have another in mind?

In the case of CEA's lottery (and last year's lottery), the actual draw is the U.S. National Institute of Science and Technology public randomness beacon, outside of CEA's control, which allows every participant to know whether their #s were drawn.

When the rules for anonymity were being drafted, was any thought given to this issue?

Someone raised the possibility of people who didn't want publicity/celebrity being discouraged from making use of the option, as part of the general aim of making it usable to as many donors as possible.

A $200k lottery has about 4x as much cost-via-risk as a $100k lottery. Realistically I think that smaller sizes (with the option to lottery up further) are significantly better than bigger pots. As the pot gets bigger you need to do more and more thinking to verify that the risk isn't an issue.

If you were OK with variable pot sizes, I think the thing to do would be:

• The lottery will be divided up into blocks.
• Each block will have have the same size, which will be something between $75k and $150k.
• We provide a backstop only if the total donation is < $75k. Otherwise, we just divide the total up into chunks between $75k and $150k, aiming to be about $100k.

The point of a donor lottery is to help donors move to an efficient scale to research their donations or cut transaction costs. But there are important diminishing returns to donations if those donations are large relative to total funding for a cause or organization. So it is possible to have a pot that is inefficiently large, so that small donors risk not plucking low-hanging fruit. If the odds and payouts were determined by the unknown level of participation, then a surge of interest could result in an inefficiently large pot (worse, one that is set after people have entered).

$100,000 is small enough relative to total EA giving, and most particular causes in EA, not to worry much about that, but large enough to support increased research while reducing the expected costs thereof. If a lottery winner, after some further consideration, wants to try to lottery up to a still larger scale they can request that. However, overly large pots cannot be retroactively shrunk after winning them.

We just want to be really careful about unintended incentives?

One of the most common mistakes people have on hearing about donor lotteries is worrying about donors with different priorities. So making it crystal clear that you don't affect the likelihood of payouts for donors to other causes (and thus the benefits of additional research and reduced transaction costs for others) is important.

Ideally, non-EAs can enter and win. As Carl said, on a first cut analysis, what you're doing doesn't depend on what other people do. You're simply buying a 1/m chance of donating m times your contribution, and if other EAs or non-EAs want to do the same, then all power to them.

In practice, CEA technically gets to make the final donation decision. But I can't see them violating a donor's choice.

See the post for that lottery: Tim Telleen-Lawton (former GiveWell employee) won. He is planning to post about his donations soon.

Do note, though, that the odds of payouts for other participants are unaffected by anyone's particular participation in this lottery design. For you, it doesn't matter what other participants plan to do except insofar as you would change your donation plans upon hearing they had made or not made a similar donation outside the lottery context. [I mention this because there is a common misconception to the contrary.]

One way in which your donation decision might depend on those of others would be if you were part of a small school of thought on the best giving (with total donations that are on the rough scale of the block size or smaller), and a large portion of that school was in the donor lottery. E.g. say only donors with $20,000 in total donations are interested in cause X, and there are significantly diminishing returns going from $20,000 to $100,000. Then if all the donors entered a donor lottery (in the same block) with a block size of $100,000 there would be an 80% chance of $0 to cause X and a 20% chance of $100,000 to cause X. The benefits of better investigation in the latter case might not be enough to offset the diminishing returns. This is analogous to how your decision to donate to cause X could be affected by the news that it was currently receiving donations of $20,000 or $100,000 outside the lottery context.

However, the total pool of EA giving, and EA giving for most causes (including donors who can switch based on changes in funding levels) is large enough that small donors in one $100,000 block won't significantly move along the diminishing returns curve.