Donor Lotteries Aren't Worth the Effort
By AnonymousEAForumAccount @ 2025-02-27T22:38 (+24)
The case for donor lotteries is based on assumptions that don’t hold up to scrutiny. Based on how donor lotteries have performed in practice there is little reason to think that (as GWWC put it a few months ago when launching the 2024 lottery) “we believe donor lotteries are one of the most effective ways for smaller donors to give, provided you're comfortable with the approach.” In the past, even stronger claims have been made about the benefits of donor lotteries.
Questionable assumptions include:
- Donor Lotteries assume anyone can be a good grant evaluator. Even among a donor base of EAs, there’s no reason to think that everyone participating in a lottery is equally capable of being a good evaluator. If one assumes non-EA participants, this assumption becomes even less realistic. Different people have different strengths, but the lottery model assigns evaluation responsibility based on randomness rather than relevant skill.
- Donor Lotteries assume winners’ work will be leveraged. In practice, lottery winners rarely publish their work (the last published writeup is from the 2018-2019 lottery). It’s also rare for lottery winners to become professional grantmakers, so it’s questionable whether any additional evaluation knowledge they acquire is leveraged beyond the lottery.
- Donor lotteries assume there’s demand for the model. Donor lotteries have typically been in the ballpark of a few hundred thousand dollar, and often significantly smaller. One likely explanation is that the model is highly counterintuitive, and difficult to explain to casual donors (or anyone who isn’t already familiar with it).
- Donor lotteries assume the model improves impact/dollar significantly, and does so for a significant number of dollars. Lotteries are unlikely to improve impact/dollar significantly, as the model is mostly used by (or even understandable by) people who are already EAs. Casual donors whose impact could be considerably increased are unlikely to understand or participate in a lottery. And historically lotteries have only been modest size, so they are not impacting a large number of dollars.
Donor Lotteries were an interesting experiment because they address an important observation: there are economies of scale when giving. However, I’d argue EA Funds is a much better implementation model. EA Funds is easily understandable (to EAs and non-EAs alike), uses evaluators that are chosen for their ability in that area (rather than by random selection), has a better track record of publishing grant writeups than donor lotteries, and adds evaluation capacity more efficiently over time (since fund managers are relatively static as opposed to donor lotteries where a new evaluator is selected and needs to start training from scratch with each new lottery). EA Funds already does a much higher donation volume than donor lotteries, and it would be preferable to continue building these economies of scale than to divide resources across multiple projects with similar goals.
Neel Nanda @ 2025-02-28T08:23 (+31)
This is quite different from the case I would make for donor lotteries. The argument I would make is just that figuring out what to do with my money takes a bunch of time and effort. If I had 10 times the amount of money I could just scale up all of my donations by 10 times and the marginal utility would probably be about the same. So I would happily take a 10% chance to 10x my money and a 90% chance to be zero and otherwise follow the same strategy because in expectation the total good done is the same but the effort invested has 10% the cost, as I won't bother doing it if I lose.
Further, it now makes more sense to invest way more effort, but that's just a fun bonus. I can still just give the money to EA funds or whatever if that beats my personal judgement, but I can take a bit more time to look into this, maybe make some other grants if I prefer etc. And so likewise, being 100 or 1000x leveraged is helpful and justifies even more efforts in the world where I win.
Notably this argument works regardless of who else is participating in the lottery. if I just went to Vegas and bet a bunch of my money on roulette that gets a similar effect. Donor lotteries are just a useful way of doing this where everyone gets this benefit of a small chance of massively increasing their money and a high chance of losing it all, and it's zero expected value unlike roulette
AnonymousEAForumAccount @ 2025-02-28T17:55 (+4)
Our crux is likely around how much research a lottery winner would need to conduct to outperform an EA Funds manager.
I’m very skeptical that a randomly selected EA can find higher impact grant opportunities than an EA Funds manager in an efficient way. I’d find it quite surprising (and a significant indictment of the EA Funds model) if a random EA can outperform a Fund manager (specifically selected for their competence in this area) after putting in a dedicated week of research (say 40 hours). I’d find that a lot more plausible if a lottery winner put in much more time, say a few dedicated months. But then you’re looking at something like 500 hours of dedicated EA time, and you need a huge increase in expected impact over EA Funds to justify that investment for a grant that’s probably in the $100-200k range.
I do agree that a lottery winner can always choose to give through EA Funds which creates some option value, but I worry about a) winners overestimating the own grantmaking capabilities; b) the time investment of comparing EA Funds to other options; and c) the lack of evidence that any lottery winners are actually deferring to EA Funds (maybe just an artefact of not knowing where lottery winners have given since 2019).
calebp @ 2025-02-27T22:56 (+6)
Fwiw I think that donor lotteries are great and I'm glad they have a place in the effective giving ecosystem. I'm not sure I follow most of your points analysis but I'd push back on
Donor lotteries assume there’s demand for the model....
My understanding is that donor lotteries don't take up much time or attention from people who aren't participating in them. They are pretty low-cost to run relative to managed funds and people entering them have a good sense of their chance of winning and the pool they'll be able to direct if they do win.
Larks @ 2025-02-28T03:36 (+5)
Donor Lotteries assume winners’ work will be leveraged
This seems false to me, though perhaps people have claimed it. If the winner does more due diligence than the average lottery participant would have otherwise the overall level of dollar-weighted-research is increased, even if it is never published (though I agree it would be good if it was).