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Executive Summary: The success of Effektiv Spenden has exceeded all of our expectations. At the same time, it is just the beginning. We believe that we can raise hundreds of millions of euros for highly effective charities in the coming years.[1] In parallel, we see ourselves in a position to significantly support the growth of the EA community in German-speaking countries. To achieve our goals, we require investments of up to 3.6 million euros over the next 2 years.[2]
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Effektiv Spenden raised nearly 19 million euro for high-impact organizations in 2021 - only its second full year of existence. We thus exceeded our own forecasts by far (details can be found here).
The potential for effective giving in the German-speaking world alone now appears to us to be significantly greater than we originally estimated. In order to fully realize this potential, investments are necessary.
This post is intended to serve as a basis for conversations with potential funders. And as a call to the EA community to support us with critical feedback.
Effektiv Spenden provides specific recommendations to people who want to donate effectively, and provides an easy-to-navigate interface to simplify the process of making donations to high-impact organizations (e.g. organizations recommended by GiveWell, Founders Pledge or other EA-aligned charity evaluators). The central KPI of our core business is the counterfactual donation volume we raise for those organizations. Our user survey shows that we are also able to inspire people to donate effectively who are not yet part of the EA community. We want to double down on that and establish ourselves as THE donation experts in the German-speaking world. Should we achieve this, also among media representatives, we see the chance to shape the public donation discourse beyond the donations raised by ourselves and contribute significantly to effective giving becoming the new norm.
To achieve our goals, we believe the following investments are necessary (in the following order)
Due to the strong growth in our donation volume, we had to invest in additional capacity (customer support, operations, donor advisory, software engineering). So we grew from 1.5 FTEs in February 2021 to 5 FTE in May 2022:
Strategy, donation advice, press relations, content, website
Strategy, donation advice, human resources, finance, controlling
Strategy, donation advice, major donors
Coordination of all regranting activities, support, office management
Web development (custom build donor management system and website), security
Customer support
Office management, community building
The annual personnel costs, including all taxes, health insurance etc., currently amount to approximately 510,000 euros per year. In addition, there are further costs for tax consulting, auditing, freelancers, rent, software, travel, training, etc. amounting to approximately 150,000 euros. In total, our annual expenses amount to about 660,000 euros per year. With this budget, the current donation volume of approx. 20 million as well as a moderate growth could be reliably managed, including an expansion of our German-speaking offer to Austria and the Czech Republic.
A Head of Research should take on tasks for which we lack the capacity in the current setup:
Our most successful marketing activity so far has been content marketing. With little effort, our articles have already led to contact by (major) donors and journalists. We are convinced that expanding our content will be a crucial key to our continued growth.
Tasks of the Head of Content:
Besides a Head of Research, additional researchers would enable us to generate fundraising recommendations in fields where there are currently no or only few public recommendations from EA-aligned charity evaluators. We are convinced that such content would generate additional interest in issues and solutions currently neglected by the general public beyond donations. Thus indirectly contributing to the growth of the EA community in general. In addition, this would also help to consolidate our expert status and shape public discourse in the German-speaking world. Specifically, we see a need for additional research in the following areas:
4.1. Researcher X-Risks (3 FTE) (Pandemic Preparedness, Great Power Conflicts, Artificial Intelligence): 480.000 euros (240.000 euros / year)
Although existential risks now occupy a central role in EA, there are almost no publicly available and up-to-date evaluations or donation recommendations. Besides raising additional funds we see this as an opportunity to positively shape the public discourse with regards do existential risks and longtermism (see also here).
4.2. Researcher Safeguarding Democracy (2 FTE): 320.000 euros (160.000 euros / year)
Safeguarding liberal democracies has been discussed as a potential EA cause area before (see e.g. here or here). We have also seen significant interest by potential donors and see a lot of value for investigating highly effective organizations in this field.
4.3. Researcher Animal Welfare (1 FTE): 160.000 euros (80.000 euros / year)
While there are publicly available donor recommendations regarding animal welfare, they don't seem as robust as in other cause areas. Combined with significant interest by major donors we see value in additional and independent research capacity.
4.4. Researcher Climate Change (1 FTE): 160.000 euros (80.000 euros / year)
With Founders Pledge and Giving Green, there are already two EA-aligned actors that address this issue. In our view, they are understaffed in relation to the size of the problem and the demand from donors; and in the case of GivingGreen also too regionally focused.
In our view, investments in the research capacity of Effektiv Spenden would also help to attract additional talent to the EA community, e.g. people who, for personal reasons, would prefer to work in Germany (and not only remotely). Mid- to long-term this could also contribute to improving access to and exchange with continental European universities, research institutions and also political actors.
Our website is our main way of communicating with our donors. Through optimization, we can increase donations and make EA content wider available. Furthermore, we will continue to enhance our custom build donor management system and CRM to handle larger scale and support our donation advisors. To support this, we will hire a second developer to increase the capacity of our current tech team of one. This will have the added benefits of making the team more resilient against risks such as illness and increasing overall quality through peer review.
In case we identify an exceptional candidate who would be able to implement our strategy and help Effektiv Spenden to position itself as THE donation expert in other countries like France or Italy, we see a strong case to use our existing infrastructure and experience (as we already operate successfully in two countries) to help jumpstart effective giving in currently underserved markets. We would still only go in the lead in this regard after consulting with our international partners like GWWC to ensure we really do add value and not create redundant structures. The above listed costs include salaries of a country manager as well as of legal, technical and operational support.
From our point of view, Effektiv Spenden is currently one of the most interesting meta-opportunities, also for large donors. If you are convinced by our presentation and are interested in funding one of the projects suggested here, or if you’re thinking of a potential sponsor for us, please contact us: [email protected].
We are also happy to receive critical feedback on which projects you think we should not implement or at least implement differently. If you don't have time to sugarcoat it feel free to give anonymous feedback through this form.
In recent years, we have also supported the EA community with a number of offerings beyond our platform. Again, we are convinced that this is just a start and that there is still a lot we can do to make EA bigger and more influential, especially in German-speaking countries. How this can be achieved and which resources are still missing in order for us to achieve this, we will present in this article.
At first glance, it may seem that an organization like Effektiv Spenden would only increase the recently discussed funding overhang. We have a different opinion. We do not see that EA-aligned charities could have too much money available in the medium term. The number of people suffering from hunger will most likely increase this year, possibly even drastically. Still many billions of sentient beings suffer and die every year in factory farming. The climate crisis is intensifying and the Covid-19 pandemic has highlighted how inadequately prepared humanity is for potentially existential risks. More and more effective investments should be made in solving each of these problems. Especially when we are currently uncertain in some areas how to best allocate donations, we should be investing in meta-organizations like Effektiv Spenden right now. On the one hand, in order to create additional research resources with which further effective donation opportunities can be identified and, on the other hand, in order to be able to immediately cover additional funding needs as soon as they become apparent, e.g. through the investments of GiveWell.
We raised approximately 450,000 euros from private sponsors in 2021. However, a number of one-off large donations may distort future fundraising potential. For 2022 and 2023 and expect to raise between 300,000 euros - 700,000 euros per year through these channels. This includes the recently created tipping functionality which enables donors to place a "co-donation" to the platform in addition to donating to an organization we recommend. Our actual room for more funding for the next 24 months would thus be between 2.1 and 2.9 million euros. Should we be provided with more funding than we can use within our growth plan within 2 years, we would donate the surplus to the organizations we recommend. In doing so, we are following the example of e.g. GiveWell.
The stated costs always include all taxes, pro rata rent, office equipment, travel and training costs, etc.
