This article is kind of too "feel good" for my tastes. I'd also like to see a more angsty post that tries to come to grips with the fact that most of the impact is most likely not going to come from the individual people, and tries to see if this has any new implications, rather than justifying that all is good.

For instance, 

• Maybe given that there are billions of money floating around the kind of thing would be to try to influence them
• But OpenPhil doesn't seem that approachable, and its not like they can be influenced all that much by that many people
• Maybe there is some cause X that we're missing that would make the broad EA community great again
• etc.

More generally, maybe the patterns in the early EA community were more suitable to a social movement without  billionaires, and there are better patterns that we could be executing now. For instance, maybe trying to get prestige outside of EA dominates earning to give now that EA is better funded. Or maybe EA is better funded but you'd still expect most people to have idiosyncratic preferences not shared by central funders.

[restating and elaborating on what I said on twitter]

Thanks very for this update, Ben. The "EA has loads of money" meme has unfortunately led people to (incorrectly) assume that everything 'within EA' was fully funded. This made it harder to fundraise, particularly for small orgs, like mine, who do need new donors, because prospective donors assumed they weren't necessary.  

Of course, the meme had no impact on organisations that are already fully-funded - which is more or less only those orgs being funded by Open Philanthropy. 

IMO the fact is crazier, it's "despite billions of funding, small donors still have a siginificant better marginal value of dontaing money than big donors"

Completely agree with the thrust of this post. 

I do have one small phraseology  suggestion here:

I’d especially encourage ‘medium’ donors (e.g. people who might donate $200k - $2m per year) to think seriously about making ‘angel’ donating a significant focus e.g. choose an area to specialise in and spend 1-2 days per month on research...

You might reconsider labeling this group as 'substantial' donors (rather than 'medium' donors) given the historic average of <$10K/year for EA donors. That survey data suggests the $2M donor level is likely close to the far right end of the donor distribution. There may be a risk that framing the $200K-$2M range as 'medium' raises eyebrows and undoes some of the goals of the post. Given efforts to reduce legacy ETG-centric perceptions of EA from the 2010s, I worry this tack could rub those new to EA the wrong way. The average donor may be surprised to learn EA orgs perceive a $1.99M/year donor as medium-sized. They may wonder if a ≤$199K donor would be a small donor, and perhaps a ≤$99K donor is extra-small and (core message of this post aside) near-inconsequential? If a donor with a typical income perceives  four- or five-figure annual donations as a source of real financial anxiety — but perhaps 'extra-small' in the lights of EA leaders — that may be demoralizing, and reduce their warm glow for making future donations at that scale in the future. 

One point I really like is:

making donations also helps to build the effective altruism community, since it’s a hard-to-fake symbol that we’re serious about doing good, and that helps to get more people on board.

For new and small-scale charities, I also hope there's a warm glow on the recipient side when individuals chip in $100 here and there to smaller meta and other charities via opportunities like this.

If I imagine being someone who is new-ish to EA, who wants to do good in the world and is considering making donations my plan for impact, I imagine that I really have two questions here:

1. Is donating an effective way to do good in the world given the amount of money committed to EA causes?
2. Will other people in the EA community like and respect me if I focus on donating money?

I think question 2) understandably matters to people, but it's a bit uncouth to say it out loud (which is why I'm trying to state it explicitly).

In the earliest days of EA, the answer to 2) was "yeah, definitely, especially if you're thoughtful about where you donate." Over time, I think the honest answer shifted to "not really, they'll tell you to do direct work." I don't know what the answer is currently, but reading between the lines of the article I'd guess that it's probably close to "not really" than "yeah definitely."

Assuming that earning to give is in fact quite useful, this seems like a big problem to me! It's also a very difficult problem to solve even for high-status community members.

I'd be interested in thoughts on whether this problem exists today and if so, what individual members of the community can do to fix it.

Small donors can sometimes beat large donors in terms of cost-effectiveness, and I provide a list of some common ways to do this.

Another common way to do this that you didn't mention: Small donors can use their donations to counterfactually direct matching funds offered by large non-EA donors to highly-effective nonprofits. Common counterfactual donation matches:

• Employer donation matches
• Facebook's $8M annual Giving Tuesday donation match
• Every.org's donation matches (two so far, more upcoming in expectation)

I'm not sure how much employer matching goes to EA-aligned nonprofits, but about $1m/year is currently counterfactually directed to EA-aligned nonprofits from the Facebook and Every.org matches. Counterfactual matching opportunities have existed consistently each year since at least 2017. Plausibly they may go away soon, but for the time being they are still exploitable at the margin and definitely offer a way that small donors can outperform large donors from a cost-effectiveness standpoint.

Thanks for writing; I too have worried that many folks got the wrong impression here.

One point I don't think has been mentioned in this post is that a small donation to the Patient Philanthropy Fund could end up being a much larger donation in the future, in real terms, due to likely investment returns. Couple that with probable exogenous learning over time on where/when best to give, a small donation to PPF now really could do a phenomenal amount of good later on. 

More on this in Founders Pledge's report.

But if you were to donate $1,000 to CHAI, then either:

1. You expand CHAI’s available funding by $1,000. The cost-effectiveness of this grant should be basically the same as the final $1,000 that Open Philanthropy donated.

2. Or Open Philanthropy donates $1,000 less to CHAI in their next funding round. In this case you’ve been ‘funged’ by Open Philanthropy. But then that means that Open Philanthropy has an additional $1,000 which they can grant somewhere else within their longtermist worldview bucket.

In reality, some combination of the two probably happens. But either way, the effectiveness of your donation is about the same as marginal donations made by Open Philanthropy.

I am much more pessimistic about both cases.

In case 1, room for more funding estimates likely indicate estimates for thresholds for fairly steeply diminishing returns or even barriers to expansion, e.g. they don't expect to find another individual worth hiring or nearly as good as their last hire, or have the capacity to manage them. If Open Phil is aiming to make sure this threshold is always met or overshot slightly (which they should do, but might not be doing; I don't know; they could also follow up with orgs earlier to fill in missing gaps), then additional funding will have much worse returns, or just roll into future expenses which could have been paid for with future grants or donations, but those will just displace more future grants/donations, and so on. In the case where Open Phil overshot, that would speak poorly for the cost-effectiveness of the last $, so we shouldn't be too happy about matching that.

In case 2, Open Phil might not find anywhere good enough to grant that extra $1,000, or it won't otherwise be used soon and will just offset their own or others' future donations/grants. There is likely a reasonably large gap between the organizations they grant to and those they looked into but didn't grant to in terms of marginal cost-effectiveness (likely smallest in global health and development, at around 5x-10x, because of the size of the field and them not filling GiveDirectly's funding gap), since otherwise they would have made more grants. The fact that Open Phil has been granting <2% of its endowment yearly despite aiming to spend it all within the founders' lifetimes is a sign that they would not find additional similarly cost-effective opportunities. It's not for lack of trying, and it's not that they don't have the money to hire more researchers, either. The reason Open Phil isn't granting to more organizations is likely because there's a big gap in expected cost-effectiveness between its last grants and the next best ones it decided to not do.

At some point, if an organization is funded enough without Open Phil, Open Phil might spend less time evaluating it, and have more time to evaluate others, but this seems unlikely, given that Open Phil's grants usually makes up most of EA charities' budgets.

Thank you for writing this. I've seen a lot of people get confused around this, and it's genuinely pretty confusing, and it's good to have a really good summary all in one place by someone who knows what's going on.

The article proposes that the two main ways to be engaged in EA are either a job or donating - but doesn’t mention community building. I think this could be a fundamental flaw in thinking across the EA community and 80,000 Hours (sorry if calling it a flaw hurts anyone’s feelings, but I get the impression people reading this will be okay thinking objectively about whether it’s a flaw). Community building can’t happen because of single individuals, it takes a lot of individuals working together, so I find it striking it’s not mentioned in the article since it’s very much in line with the topic.

It’s possible that EA is still in its infancy and the amount of people working in or donating to EA is minute compared to what we’ll see in 100 years, and that the most important thing for EA could be the growth of the community.

Think of the wild success (in terms of getting people to join and contribute) of something like Catholicism. What if Christ had never come back from Mount Tabor or the desert? What if he had never preached? I just bring up religion to point out how much, as a social movement, it benefited from attracting followers. If you look at Mormons, they have their members do a mandatory program where they go try and convert other people to the religion. What does EA do for community building?

After all, what is EA without the community?

PS I don’t really have evidence for whether community building is more impactful than working or donating. I could only speculate. But I don’t see it mentioned and I think there’s a bias in this EA community to not consider it (although yes it is mentioned here and there it just doesn’t seem to be a focus area from what I’ve read so far).

edit: Some very anecdotal evidence for the importance of community building is I spent a lot of time researching how to find a more impactful career a couple years back. Mostly I was focused on computer science careers but easily could have been swayed by reading 80,000 Hours, if I had known it existed! Maybe it is my fault for not researching the right way, but I know there are tons of students out there who want to have impactful careers and only a sliver of them have heard of 80,000 Hours.

There are also ways to leverage smaller donations to direct larger sums of money. See how to multiply small donations by 1.27x to 6.6x here: https://forum.effectivealtruism.org/posts/BFbNymbn4ukmKWHrX/donation-multiplier-stacking-directing-1-27x-to-6-6x-more 

I tried to estimate how many "average-earning" people donating 10% of their income would match Sam Bankman-Fried's $24 billion pledged.

My estimation amounts to 70,000 people (laid out here, please comment if you disagree with an assumption).

This may sound disencouraging at first. However, that is also the amount of inhabitants in a small city or larger town in Germany. Envisioning all these happy folks matching the donating power of SBF cheers me up.

Personally, I would donate to the Long Term Future Fund over the global health fund, and would expect it to be perhaps 10-100x more cost-effective (and donating to global health is already very good). This is mainly because I think issues like AI safety and global catastrophic biorisks are bigger in scale and more neglected than global health. Coming up with an actual number is difficult – I certainly don’t think they’re overwhelmingly better. 

Not to pick nits but what would you consider “overwhelmingly better?” 1000x? I'd have said 10x  so curious to understand how differently we're calibrated / the scales we think on. 

My contribution feels tiny in comparison

[...] It can easily be demoralising to compare ourselves to others who are achieving a lot more than us.

Personally I don't feel demoralized when I think about others doing a lot more good than me (either though their donations or direct work) and I think that's because I mostly just care that the world/future is better, not who makes it better.

Learning that others are doing a fantastic job making the world better doesn't cause me to think that my expected achievements are smaller than I previously thought. It causes me to think they're smaller in a relative sense, but I don't care about that.

Rather, if anything, learning about very successful do-gooders causes me to update to think that my expected achievements may be larger than I currently think if I have some chance of emulating their extreme success. That's a reason to be happy, not demoralized.

But if you were to donate $1,000 to CHAI, then either:

1. You expand CHAI’s available funding by $1,000. The cost-effectiveness of this grant should be basically the same as the final $1,000 that Open Philanthropy donated.

If Open Phil's judgement is good enough, and Open Phil was not holding back because they believed CHAI marginal cost-effectiveness would drop below that of their marginal grantee, and instead for some other reason(s), e.g. donor coordination, the public support test, reducing dependence on Open Phil, then wouldn't this actually normally beat their final $1,000? So, in expectation, we can plausibly beat Open Phil's final $1,000 by topping up their grantees (assuming case 2 goes through well enough).

If Open Phil makes individual donor recommendations (and in the past, they've written why they haven't fully funded a given opportunity), then we can just follow those. It looks like they haven't been recommending the most well-known large EA organizations at all, though. Does Open Phil think they're fully funding these organizations (anticipating what those orgs will raise through other means)? If so, we should perhaps expect to be in case 2 almost all of the time.

Unfortunately, this post doesn't quite persuade me that small donors can be impactful compared to large donors. The gist of the post seems to be that, as long as there are professional EA fund managers, small donors may achieve a similar level of marginal impact. This seems clear enough. Since EA grant evaluators typically regrant unrestricted funding, they will just treat any dollar - whether from large or small donors - as the same. Everyone's allowed to save lives at$3000 per life. 

However, if the EA movement is asking the question 'if we needed X amount of dollars, who should we approach', would small donors still be the answer? I think this is the sort of 'impact' that people question, i.e. where do we expect impact to predominantly come from. Within EA, small donors make up a 1/10 of Good Venture + FTX. To be of comparable impact, small donors need to be 10x more effective. 

Of course, we also need to consider where the baseline is. Would a 1/10 impact compared to large donors be decent enough for small donors collectively? As a MOVEMENT that does the MOST good, should we see small donors that give to AMF as impactful because they save lives per $3000 - and that's very good for the world; or unimpactful as the number of people saved through such giving is expectedly much lower than what large donors are doing? These are probably the key considerations to determine how the impact of small donors should be viewed. Just discussing the marginal impact of small donors doesn't quite do it for me.

Thanks for highlighting the potential of small donors to support political candidates and campaigns. In the US, if you expect to take the standard deduction on your taxes, you have a fantastic opportunity to leverage your voice in the democratic process.

Maybe we should collect the angel donation ideas somewhere?

I believe that GiveWell/OpenPhil often try to avoid providing over 50% of a charity's funding to avoid fragility / over-reliance.

Is an upshot of that view that personal small donations are effectively matched 1:1?

I.e. Suppose AMF is 50% funded by GiveWell, when I give AMF $100, I'm allowing GiveWell to give another $100 without exceeding the threshold.

Curious if anyone could corroborate this guess.

Plus, section 2 made me wonder if something like this would be feasible: large donors could disclose a list of potential grantees and projects they are considering for funding (and part of their respective analysis), then let small donors provide a part of the necessary amount, and then complement the rest of the necessary funding. I mean, this could arguably leverage their donations and maybe establish some information exchange between small and large donors… A bit like a VC, but maybe more widespread.

You said:

The cost-effectiveness of this [small $100] grant should be basically the same as the final $1,000 that Open Philanthropy donated.

The counter argument that comes to mind (I have no idea if it's true) :

If Open Philanthropy donate to a longtermist cause, won't Open Phil donate all the money that this org needs (before it hits significant diminishing returns)? Is there still room for more funding? 

I don't know

Thanks for the post. This has changed my mind a bit...
I'm a particularly attracted to the argument in section 2 and the "Other Benefits..." above.  What got me thinking, though, is your section 3 is sound… I think I miss (and likely other small donors) a more detailed framework to deal with informational costs.

First, I feel psychologically attracted to the idea large donors play the “angel investor” or VC role, while  small investors are often drawn to "safe portfolios" with lower variance / risk... On the other hand, the analogy shouldn't be applicable: I don’t measure my returns in philanthropy the same way I do with personal investments, and I think there's no case for something like an EMH in philanthropy, so I could deal with a risky portfolio – that’s why I’m pretty ok with donating to longtermist causes. The real problem is uncertainty: I won't regularly donate to a cause / project that I can’t quite understand, or where it's impossible to learn or observe improvements, even though it may score high in preliminary ITN-like CBA. But if there’s someone else I can trust vetting it, I can be OK with that.

Now, the case where I might have something like “private information” on the impact of a project - the "support people you know" advice - is the interesting one. A detour: this reminds me a friend of mine who, instead of using financial markets like everyone else, would provide loans to acquaintances with stable jobs and high income, and make a lot of money with that – since he could sidestep the information asymmetry plaguing banks. But, eventually, a friend would default, and now he had some trouble collecting the money… it was no tragedy, but he realized he’d neglected social costs, biases, and that he wasn’t so great at screening… Thus I imagine that, if I wanted to fund a grant to a skilled independent researcher I know, or to a new EA group, I’d be in an analogous situation. Thus, even if I were pretty confident these projects are great and underfunded, I’d still want some sort of professional external opinion vetting it – maybe even want to totally outsource this decision, so avoiding the social cost of having to discontinue funding if the evidence ends up requiring it. And, of course, this kind of applies to personal projects - even if you know better than anyone else what you could do, you could be particularly bad at deciding when to stop.

I think there could be some way to solve / mitigate this issue - maybe having a group of small donors interested in providing advice, or funding each other's "support people you know" projects, so you could have an external opinion on it, dillute and cap risks, and have an excuse to cut the funding... But that's just what popped in my brain now.

FYI, the link in this sentence is incorrect: This might be starting with the recent increase in funding for GiveWell.