Why you should give to a donor lottery this Giving Season

By SamDeere, Jonas V @ 2020-11-17T12:40 (+74)

Summary

Enter the donor lottery 

You can also enter the lottery through the EA Giving Tuesday Facebook Match (base donation only; any matched funds can be allocated to a Fund or non-profit of your choice). See this document for more information about entering the lottery through EA Giving Tuesday.

Donor lotteries can increase the impact of your donation

With Giving Season around the corner, many people in the effective altruism community will be getting ready to make their year-end donations. However, choosing where to donate is not a simple task, and can require a non-trivial amount of time and research effort to think through questions. For smaller donors, time-intensive research doesn’t make much sense.

Let’s say you have $1,000 to donate. You want to find the most effective place to give, so you do some research, reading blog posts and charity websites, maybe even emailing some organizations to ask about their expected funding gaps. Maybe you’d spend an hour or so of your time trying to make a good decision.

However, if you were choosing where to allocate, say, $100,000, you’d probably feel like it was worth spending considerably more than an hour thinking about where to donate it.

The nice thing about spending more time on a problem is that you can come to understand the problem better. You can build upon your existing knowledge, you’ll ask better questions of experts, you’ll consider more speculative ideas, you can think about donating to things that aren’t registered charities, and so on. You might also think more thoroughly about your values and your worldview, which could cause a big shift in your cause prioritization. So if you increase the amount of time you spend thinking about your donation, you can (hopefully) greatly increase the impact of your donation.

A donor lottery is a way to make it worthwhile for you to think carefully about where to give your money.

Here’s how it works.

Let’s come back to the example of having $1,000 to donate. After doing your initial research, you decide where to give. Let’s say this donation purchases one unit of impact. (Hopefully in real life your donation will lead to something a bit more tangible than ‘units of impact’, but we’ll sidestep the issue of what you can actually buy with $1,000 for now.)

Alternatively, let’s say that you instead put $1,000 into a $100,000 donor lottery. Your chance of winning is proportional to the size of your donation, so, in this case, you have a 1% chance of winning the whole pot. In 99% of possible cases, you lose the lottery, and so you don’t end up spending any time thinking about where to donate (see below for more on this). However, in 1% of cases, you get to allocate $100,000.

The expected value of your donations is the same in both worlds – in both cases, you expect to choose where $1,000 is donated (i.e. either you’re directly donating $1,000, or your 1% chance of $100,000 works out to $1,000 in expectation).

However, in the second world, you have an incentive to think more carefully about your donation. This careful consideration and deliberation means that you’re multiplying your $100,000 (or $1,000 in expectation) by the increase in donation quality. Assuming you found things that were twice as effective as your previous top pick, the final expected value of your donation is now two units of impact [1].

Visual explanation of how a donor lottery works

Obviously, this depends on you being able to reliably improve your impact through spending more time on research. Based on our experience talking to previous lottery winners, we think this is likely. 

One way of improving your donations is to consult with experts. If you win the donor lottery, we can put you in touch with experienced grantmakers if you’d find it useful. A group of grantmakers across different cause areas (including fund managers from all four EA Funds) have already agreed to assist, and we can also put you in touch with other people who have experience in specific areas. 

Other benefits

More places to donate

Being a bigger donor also means that you get access to many more options, which can also improve the effectiveness of your donation. With $1,000, you can probably only expect to make a contribution to an existing registered charity. With a hundred times that amount, you could provide seed funding for a brand new high-impact charity startup, fund novel research, or help an existing charity expand their operations significantly. While you still only have $1,000 to give in expectation, the scope of projects you could contribute to increases, which means that you can now access options that (quite possibly) include higher-impact opportunities.

Improving community discourse and knowledge

In addition to the direct benefit of your donation, taking the extra time to figure out where to donate a larger amount of money may have positive externalities, both for you and for the EA community. You could learn a lot more about a particular problem, and you could build skills required for good grantmaking, which might be useful if you ever want to do more of that in the future. As one example, Adam Gleave (who won the first EA Funds donor lottery back in 2017) now serves on the Long-Term Future Fund committee.

If you decide to publish the reasoning behind your grantmaking, you’ll also be contributing to the store of knowledge in EA, about both the cause area you researched, and the specific organizations or projects you recommend grants to. While a lot of research is done by people for whom ‘being a researcher’ is a full-time job, a huge amount of EA research has also come from thoughtful, interested individuals who took the time to do a deep dive into an issue.

To be clear, there’s no onus on you to publish anything if you do win (or even to have the fact of your win made public) – this is just a potential side benefit if you do. So if the idea of publishing a report seems stressful, don’t let that put you off entering. Having more participants in the donor lottery seems good for the community even if they don’t share their thinking.

Some drawbacks

A donor lottery doesn’t have the same ‘warm fuzzies’ you might get if you were to know with 100% certainty that you had, for example, bought a certain number of bednets, or contributed directly to a cage-free campaign. In the case where you don’t win (which happens most of the time), you won’t have the knowledge of having directly contributed to a cause you care about. Hopefully this is offset by the knowledge that, in expectation, your donations are more effective than they would have been otherwise, but it’s understandable if this doesn’t feel as satisfying as donating directly.

There’s also a risk of feeling less invested in your donations, and not being as engaged with the current state of EA research. Having lots of people taking an interest in donating effectively, and examining a wide range of donation opportunities, is a good thing for EA.

To address these issues, we recommend that most people still make direct donations with some fraction of their donation budget. You can put most of your donations towards the donor lottery, and use the rest to donate wherever you would have if there wasn’t a donor lottery.

Common questions, objections, and misconceptions

We’ve been running the donor lottery for a few years now, and there are a few questions and misconceptions that often come up. Here’s our attempt to run down a few of these:

Your decision whether to participate should not depend on what others plan to do if they win.

Some people think that they should only participate in the donor lottery if other lottery participants would make their donations wisely. The intuition is that you want your money to go somewhere good, and that this might not happen if there are other donors who would allocate their winnings poorly. However, whether you participate or not, others will have the same odds of winning, and will be able to make the same decision if they win. Your decision can’t change that – neither for better, nor for worse [2]. 

This means that you can simply evaluate the lottery from your personal perspective: Would it be helpful to trade your donation for a smaller chance of winning a larger amount, so you can think more carefully about it? If so, you can safely assume that participating is helpful for you, and won’t change the expected outcomes for anyone else.

Doesn’t EA Funds already solve the problem of donors needing to do individual research?

EA Funds does solve this problem to some extent. However, donating to the donor lottery doesn’t preclude you from recommending the money go to an EA Fund. In fact, participating in the lottery has additional benefits, though, as it allows you to think about questions like: How good is the grantmaking of each EA Fund? Which one works best for your beliefs and values? How does it compare to other donation options? We think it’s very valuable for EA Funds to have more of this kind of independent scrutiny.

Put differently, the donor lottery just gives you free option value – in the default case, you can grant the same amount of money (in expectation) to your preferred EA Fund, but you also have the additional option to look into it in more detail if you win.

I don’t really want to spend a lot of time investigating where to grant the money, and would like someone else to allocate the money instead. 

The effectiveness of the donor lottery relies on you planning to spend additional time investigating high-impact donation opportunities. However, if you don’t have the time or expertise to investigate the most effective use of the money yourself, that’s fine – you can always defer to someone else whose judgement you trust. For example, you could recommend that the money be distributed by one of the EA Funds, or ask an independent researcher that you trust to make the recommendation instead. We can also put you in touch with experienced grantmakers who can advise you if you like.

Of course, you could do this already before entering the donor lottery, but you may be willing to invest a bit more time working out who to defer to if you have a larger amount to donate (and others may be more willing to spend time to help you out). If you don’t have the time yourself, and you don’t want to defer to someone else, then you should probably just donate directly instead of entering the donor lottery.

I might want to donate to something speculative, or something that isn’t traditionally considered to be effective by the EA community.

That’s fine; we’ll do our best to help you find a way to support your preferred option.

The lottery is administered by EA Funds, which is a project of the Centre for Effective Altruism (CEA). CEA can only make grants that are within its charitable objectives, and retains sole discretion over where the final grants are made. This means that we won’t make grants that run counter to broad altruistic principles, or to projects that don’t satisfy our regular due diligence requirements. For practical purposes, we should be able to make grants to any registered charity in most parts of the world (provided we can easily verify their registration status). If you want to recommend the money be given to a project that is not currently a recommended charity, that’s probably OK, but the project will need to demonstrate that they’re providing a genuine public benefit, and pass our regular due diligence checks. We also can’t grant to organizations that are directly involved in politics.

If you’d prefer that this decision wasn’t in CEA’s hands, you can also choose to set up a Donor Advised Fund in the US or the UK in your name [3] (note that this means that instead of being subject to CEA’s processes, your recommendations will instead be subject to those of the DAF provider, which we generally expect to be more restrictive).

For more information, please see the Caveats and Limitations section of the donor lottery page.

Practical information about the 2020/2021 EA Funds Donor Lottery

The EA Funds Donor Lottery is open now. The lottery will close to new entries on Friday, 15 January 2021, 4pm UTC. Any payments not confirmed by EA Funds by Friday, 22 January 2021, 4pm UTC will not be accepted as entries [4]. 

The lotteries will be drawn starting at Friday, 29 January 2021, 4pm UTC (drawings for each block size will be spaced a minute apart). You can click through to any of the open lotteries below to see these dates displayed in your local time.

There will be three block sizes:

Which block you decide to enter is up to you (there are no minimum entry sizes on any of the blocks). If you’re not sure, we suggest that you aim to enter with a 1%-30% chance of winning. So if you have $500 to donate, we suggest the $20,000 lottery; if you have a $20,000 entry, we suggest the $100,000 lottery or the $500,000 lottery.

Donations are tax-deductible in the US, the UK, and the Netherlands. However, if you live somewhere else, you should still consider entering if you think the expected value of the lottery (including the potential to allocate winnings to projects that are more effective than the most effective charity that’s tax-deductible where you live) is a larger value-add than tax-deductibility.

It is possible to participate anonymously, such that your personal details will only be visible to EA Funds and CEA operational staff, even if you win. By default, all grants will be made public, unless winners or recipients request otherwise.

For more in-depth information about the lottery process (including the important Caveats and Limitations section), please see the donor lottery website.

EA Funds Giving Tuesday now supports the donor lottery

Participants in the EA Giving Tuesday Facebook Match can also enter the donor lottery. Please read this document for detailed information about how to enter. Note that your donor lottery entry will only be for the value of your base donation, and won’t include any matched funding (because we won’t necessarily be able to confirm which donations are going to be matched before the lottery is drawn). If your donation is matched, you can allocate the matched funds to any Fund or organization supported by EA Funds.

Past donor lottery grants

Past winners of the EA Funds donor lottery have so far recommended over half a million dollars in grants:

Acknowledgements

Thanks to JP Addison, Owen Cotton-Barratt, Aaron Gertler, Andrew Leeke, and Julia Wise for helpful input on this post, and Daniel Rüthemann for help with the infographic. Any errors or omissions remain those of the authors.

Footnotes

  1. The actual increase will depend a lot on the kind of updates you make as you investigate where to donate. For example, if you simply pick a more effective organization within an area, you might get closer to a 25% increase in impact (which is still very good). If you change your cause prioritization, the multiple could be much larger; for example, if you switched from a developed-world health charity to a global health charity, it might be greater than 10x. For more discussion, see: Why Charities Usually Don't Differ Astronomically in Expected Cost-Effectiveness.
  2. The lottery block size is fixed by a guarantor, who ensures that there’s enough money to pay a potential winner, even if there’s only one entrant in the lottery. This means that, whether you participate or not, others will have exactly the same chance of winning. Similarly, if you enter, it doesn’t make a difference whether other people also participate in the lottery, or whether you’re the sole entrant. If you don’t win, you’re essentially just subsidizing the lottery guarantor (and making it easier for us to continue to run donor lotteries in the future).

    Of course, subsidizing the lottery does mean that the money you’ve put into the lottery system may end up eventually being allocated by a winner whose values don’t align with yours. But under this framing, you can just treat the issue as being symmetrical: If others win, they might spend your money poorly. But if you win, you get to spend the money of those (supposedly) unwise donors more wisely. In expectation, the effects cancel out.
  3. By default, we’ll set up a DAF with Tides Foundation in the US and Prism the Gift Fund in the UK.
  4. If this happens, we’ll give you the option to allocate your donation to any of the Funds or organizations supported by EA Funds.
Jonas Vollmer @ 2020-11-17T21:32 (+47)

Another point I'd like to add is that some may come away thinking "I had a pretty cool and unusual idea for using my donations that probably won't get funded otherwise, but now I will give to the donor lottery instead." I would prefer that this person didn't participate in the lottery, and instead evaluate and support the novel opportunity they came up with. I think individual donors exploring such opportunities on their own is an important source of experimentation and viewpoint diversity in the EA community, and it seems better for them to continue doing so instead of supporting the lottery. (The same point also applies to donations to EA Funds. Thanks to Oliver Habryka for first bringing this point to my attention.)

All things considered, I think it's good to make a strong case for the donor lottery, as I think it's really one of the best ways to give, and that seems under-appreciated, but I hope donors will be aware of the above point.

David_Moss @ 2020-11-18T14:17 (+6)

some may come away thinking "I had a pretty cool and unusual idea for using my donations that probably won't get funded otherwise, but now I will give to the donor lottery instead." I would prefer that this person didn't participate in the lottery, and instead evaluate and support the novel opportunity they came up with. I think individual donors exploring such opportunities on their own is an important source of experimentation and viewpoint diversity in the EA community and it seems better for them to continue doing so instead of supporting the lottery.

Thanks! Given this acknowledgement, it's not clear where and to what extent we disagree. I assume that you think this description applies to a smaller number of donors than I do. Perhaps you have in mind a higher bar for the donor having a 'cool and unusual idea for donations that probably won't get funded otherwise' than I would, whereas I think that could be that many/most small donors (who are considering donating to specific charities) would do better to try to explore and evaluate these opportunities themselves (which I suspect leads to lots of individuals evaluating lots of different opportunities, rather than a smaller number of random individuals investigating). I'll respond to the specific points in the threads replying to my original comment.

In any case, this makes me think that it might be valuable for more time to be spent working out and spelling out in what specific conditions donors would be well advised to give to the lottery and how donors can try to discern whether they would be best advised to donate to the lottery (and possibly donate a larger sum later), donate based on their specific evaluations now, just defer to other grant-makers now, or even defer to later donors/later versions of themselves (without donating to the current year lottery) by saving their money to donate later.

Although I'm glad that your comment now prominently displays one reason why it might be better for people to not donate to the lottery, I think the original post gives the very strong impression that most donors should be donating via the lottery without discussion of these complexities. Since a lot of EAs seem very deferential, I worry that there's a large risk that a lot of donors will just defer to this recommendation without much consideration of whether there are reasons not to. (Historically there seem to have been a few cases where EAs have deferred en mass to apparent clear signals (e.g. regarding earning to give, not earning to give, ops work, EA direct work) and then there's had to be a reversal when it's pointed out that there are lots of nuances or exceptions that, for whatever reason, people didn't infer the first time around).

willbradshaw @ 2020-11-19T10:57 (+4)

Perhaps you have in mind a higher bar for the donor having a 'cool and unusual idea for donations that probably won't get funded otherwise' than I would, whereas I think that could be that many/most small donors (who are considering donating to specific charities) would do better to try to explore and evaluate these opportunities themselves (which I suspect leads to lots of individuals evaluating lots of different opportunities, rather than a smaller number of random individuals investigating). I'll respond to the specific points in the threads replying to my original comment.

In my experience the great majority of small donors (including me) generally give to fairly well-established charities. I wouldn't describe this as a "cool and unusual idea for donations".

I'm a little confused as to what your paradigmatic case of a small donor looks like, such that many/most of them fall under Jonas's description.

David_Moss @ 2020-11-19T11:35 (+6)

I don't say that many/most small donors have a "cool and unusual idea for donations that probably won't get funded otherwise." I say that Jonas may have a higher bar for this than I do, and this may partly explain where we disagree. I also said that I think that it could be the case that "many/most small donors (who are considering donating to specific charities) would do better to try to explore and evaluate these opportunities themselves." But that's only partly due to me (possibly) thinking that more small donors have cool and unusual ideas than Jonas does. It's doubtless also due to more substantive differences. For example, I also think that it may be more beneficial for many donors who are considering donating to specific charities to try to think about how to make those donations themselves, because it provides important sources of experimentation/information/donor-practice for the donor and the community, even if those donations don't meet whatever the bar is for "cool and unusual."

I think those benefits probably obtain in a lot of cases even where the donor is considering donating to "fairly well-established charities", because the donor is still at least thinking about donating to different charities and about donation in general, and the community is getting information about whether the community at large think that this or that fairly well-established charity is more promising, as well as about the extent to which the more well-established charities are better options than less well-established charities.

And as I mention in my comment, there are still other reasons that I think underlie the disagreement (not merely our conceptions of "cool and interesting" donors), which I discuss in the other threads.

David_Moss @ 2020-11-17T17:52 (+29)

I find the self-regarding case for donating (that you have equal or higher expected value, since you have a lower probability of winning a proportionately higher amount, and you might benefit from donating at scale) pretty convincing.

I'm not about the other-regarding case for encouraging small donors in general to donate to the lottery however, i.e. whether this leads to a better or worse allocation of donations.

You mention one reason why this might lead to better donations: the winner will be incentivised to spend more time thinking about their donation than they otherwise would. However, it seems like there are some reasons why the allocation made by the single winner might be worse than the allocation made by each of the individual donors' separate decisions. (I have not thought about donation lotteries very much so I am likely missing other considerations).

As you note, winning the donation lottery probably causes the individual donor to spend more time making their individual donation decision than they otherwise would. But it also likely leads to the individual donor allocating funds to a smaller number of donation targets than the individual donors to the lottery would have done had they donated separately, and probably leads to less money being donated to EA Funds than the individual donors would have done collectively. (I imagine that winning the donor lottery probably leads to people being less inclined to just donate the money to EA Funds, which might seem like a 'waste' of their win, which would signal that they don't think they can make good donation decisions. It may also lead them to wanting to make novel or idiosyncratic donations decisions, rather than donating for similar reasons.) It's pretty unclear to me that the individual winner (even with the advantage of spending somewhat more time on their decision than they otherwise would) would make a better allocation of the donations than would all the individual donors making their donation decisions separately (and potentially all acting a bit more deferentially/with different incentives than the lottery winner).

In terms of improving EA discourse and information it also seems unclear to me that the effect of one lottery winner thinking more about their donation decisions (and potentially writing it up) beats out the effect of all the other lottery donors thinking about their donation decisions (and potentially writing them up).

Jonas Vollmer @ 2020-11-17T20:39 (+7)

(I'll post two replies as separate threads.)

In terms of improving EA discourse and information it also seems unclear to me that the effect of one lottery winner thinking more about their donation decisions (and potentially writing it up) beats out the effect of all the other lottery donors thinking about their donation decisions (and potentially writing them up).

I think most donors giving most of their donations through the donor lottery is more likely to improve than worsen this because:

  1. If most EAs participate in the lottery, we will have many lottery winners (not just a single one), who can jointly cover a lot of ground. (And if only few EAs participate, we will still have lots  of EAs making direct donations.)
  2. We explicitly encourage people to continue to make direct donations with some of their budget, so if people agree with this post, we will continue to have lots of people thinking about their donation decisions (and potentially writing them up).
  3. At the current margin, I am pretty happy to trade shallow analysis for more deep analysis, as I think a lot of the shallow analyses will be similar to each other (so won't provide as much viewpoint diversity as multiple deeper analyses).
David_Moss @ 2020-11-18T16:16 (+8)

Thanks for your replies!

I think most donors giving most of their donations through the donor lottery is more likely to improve than worsen this because:

  1. If most EAs participate in the lottery, we will have many lottery winners (not just a single one), who can jointly cover a lot of ground. (And if only few EAs participate, we will still have lots of EAs making direct donations.)

I think the hypothetical state of affairs, where so many individual donors donate to the lottery that there are lots of lottery winners, is harder to intuitively evaluate than the closer counterfactuals where we have lots of individual donors or a much smaller number (~1-3) lottery winners. One might think that, to the extent that the same basic dynamic of converting many individual donors evaluating charities for themselves for 1 donor spending a bit longer evaluating for themself, the situation where you have lots winners (and even more people not donating for themselves) is not much better than the situation with just a small number of winners (and it may be proportionately worse). But I agree that the dynamics may well be different and non-linear, i.e. it could be than it's optimal to have 15 winners looking into things a bit deeper than they would have as individual donors (and all the other donors not look into things hardly at all), because this leads to the best balance of ideas evaluated at different levels of depth, and it's worse to have either fewer winners and more individual donors or more winners and fewer individual donors. But exactly what these dynamics are is unclear and this seems like the kind of thing we'd want to know in order to know whether to recommend donors in general to donate to the lottery, rather than to donate themselves, immediately defer to other grant-makers, or save for later.

  1. We explicitly encourage people to continue to make direct donations with some of their budget, so if people agree with this post, we will continue to have lots of people thinking about their donation decisions (and potentially writing them up).

I think it's good that you encourage this, but I'm not sure that this is going to be much of a safeguard. It seems quite likely that if people donate much of their donations through the lottery, then even if they continue to donate a small amount directly, many will spend much less time/effort considering or writing up these direct donations. This seems the natural mirror image of the fact that the donor lottery is expected to make the one donor more invested in taking their time to make a decision- it should make everyone else less engaged in their (remaining) donation decisions. Personally, I am more convinced of the latter (negative) effect than I am of the positive effect, but you might think it's asymmetrical in the opposite direction. It's also worth considering that, when people are donating a smaller amount of residual donations just to keep themselves engaged with 'warm fuzzies' / invested in their donations / engaged with the current state of EA research, this might lead them to take a different approach to thinking about their donations i.e. they might be more inclined to donate on a whim, in line with their 'warm fuzzies' confident that at least their EA lottery donation had high expected value. This would also lead to the loss of a lot of careful consideration of EA donation targets from a lot of EA donors.

I am pretty happy to trade shallow analysis for more deep analysis, as I think a lot of the shallow analyses will be similar to each other (so won't provide as much viewpoint diversity as multiple deeper analyses).

I think "deeper" definitely sounds better than "shallower." I'm not sure that's exactly what I'd expect to see in this case though.

It seems the EA lottery basically induces one person to think about their donation decision a bit more than they personally would have done counterfactually, while (probably) inducing a number of other people to think about their donation decisions less. (I'll leave aside the complication about trading even more individual donors for even more winners for now) As I noted above, I think we may lose a lot of depth across lots of individuals, and gain a bit of depth for onen individual, so it's not so clear to me prima facie, which is better.

But another complication is that with lots of people donating individually you have a chance of getting a writeup from each of these. But you are probably disproportionately more likely to get an writeup out of some of the most informed and likely-to-write-a-deep-and-valuable-writeup of these people. So you might actually get a more deep writeup (in expectation) out of lots of individual donors than a randomly selected lottery donor who is incentivised to write more in depth than they personally would have otherwise. Now, one could speculate that a separate virtue of the randomisation is that although you are less likely to get an especially in-depth writeup from one of the more informed donors, you are more likely to get a moderately in-depth writeup from a non-typical donor who wouldn't otherwise produce a writeup, so this might be better for viewpoint diversity. I don't know exactly how to weight these considerations, but these seem like the kind of things which would determine whether we should be encouraging more small donors to donate to the lottery or not.

The question of whether we get more viewpoint diversity from one (or very few) lottery winner(s) thinking somewhat more deeping and (possibly) producing a writeup or more people thinking more about their donations (and possibly producing writeups) seems pretty uncertain. I acknowledge that it's possible that the many individual donors might be more similar to each other and so produce less novel insight than single the lottery winner. It also seems quite possible that the one lottery winner thinking a bit more than they usually would doesn't really produce much more novel insight and you get more diversity of thought having more people think about things individually. This may also be the case if, similar to my point about depth in the previous paragraph, most of the diversity/novelty comes from a small number of highly novel thinkers, and randomly selecting a winner just gives a roughly average (non-novel, non-diverse) answer.

As an aside, in general, if we were thinking of setups to best promote EA discourse and information I'm not sure the lottery setup would be among the ways we'd think of going about this. I may writeup something brief about this separately.

Jonas Vollmer @ 2020-11-17T21:23 (+6)

(I'll post two replies as separate threads.)

Thanks for the critique!

You mentioned that there are some reasons to think that the donor lottery would make things worse. I'll try to rephrase them in my own words:

1. Donors might feel like they're not supposed to give to EA Funds and come up with their own ideas instead.

This could be good if the donors allocate the money better than EA Funds could! Also, I think EAs are generally careful thinkers, so I expect many to successfully avoid this pitfall. I also think many will see this as a particularly good opportunity to carefully evaluate the EA Funds' grantmaking, potentially resulting in a carefully reasoned donation to EA Funds or useful feedback that could lead to improvements. That said, if many donor lottery winners turned out to have a bias towards making their own grants, and had a less good track record than EA Funds, that would convince me that your concern is probably right. But I think it's worth running a larger experiment before giving a lot of weight to these concerns.

2. Donors will allocate funds to a smaller number of donation targets.

If the worry is that smaller groups will have a harder time fundraising, I don't think this will be the case (except to the extent that less promising projects don't get funded after extra scrutiny). If, say, half of EA Funds donation volume was given through the donor lottery, we would have about 10-200 separate winners (depending on the lottery), who could jointly spread out their donations across a lot of smaller groups. (If it was only 10 people, hopefully they'd delegate some of the funding decisions to a larger set of people or committees, and I might suggest this to them in that case.) As mentioned in the post, the lottery could also make it easier to support new/smaller groups tax-deductibly. (It might also reduce admin overhead from donation processing.)

David_Moss @ 2020-11-18T18:27 (+3)

This [lottery winners feeling they should pick some specific charities to donate to the best of their abilities, rather than donating to EA Funds] could be good if the donors allocate the money better than EA Funds could!

This is certainly possible. But it also seems quite possible that the allocation made by a randomly selected donor (who thinks about it a bit more than they usually would but also feels distinctive pressure to, choose specific charities, rather than delegate the decision to the funds, and maybe other pressures as well) is worse than the allocation made by lots of individual donors, some/many of whom decide they can't do better than to defer to the Funds.

That said, if many donor lottery winners turned out to have a bias towards making their own grants, and had a less good track record than EA Funds, that would convince me that your concern is probably right. But I think it's worth running a larger experiment before giving a lot of weight to these concerns.

I agree an "experiment" might be informative. I think we should assign these various concerns quite high weight before we run an experiment though (although I'd be happy to be talked into thinking that they are less likely than I currently think they are). Whether we should then run the experiment depends presumably on how great and how likely the possible benefits and costs seem to be, including how easily we think we could retrench the costs of the experiment if they turned out to be real (e.g. convince people that they shouldn't donate to the lottery after all and should instead be deferring or donating directly).

I think if we view this as an experiment (but grant that it may well lead to worse allocations of donations overall and reduce discourse and information quality for the community), that would make sense, but that the recommendation in the original post that most small donors donate to the EA lottery should be presented much more tentatively (making clear that this is an experiment that might lead to worse outcomes and will need to be re-evaluated in the future). This would reduce costs in the event that it turns out that it's actually better to encourage many donors to donate directly themselves, defer to the Funds, save to donate later etc.

If the worry is that smaller groups will have a harder time fundraising, I don't think this will be the case

This actually wasn't one of my concerns. It does seem pretty clear that donations would be allocated across a smaller number of donation targets, if they are decided by only a small number of lottery winners. (Historically, it seems that each winner has selected only 1-4 donation targets. It's less clear if we have as many as 200 winners, but that seems relatively unlikely in the near term). Donations being allocated to a much smaller number of donation targets than they would be if donors made their allocations separately could be better or it could be worse, it seems quite hard to tell.

Generally, it seems like there are a lot of considerations that would determine whether most small donors donating to the lottery should be expected to be a positive or negative move (mostly depending on whether the allocation made by a small number of randomly selected donors (influenced by certain conditions) is better than the allocation made by a larger number of individual donors (in different conditions) and which of these has the better influence on EA discourse and information, including depth of investigation, diversity of thought and novelty of experimentation etc.), whereas the original post seems to present the situation as being quite straightforward (based largely on the one argument about how the winner(s) will be in a better position to make decisions than those particular individuals would have been if they didn't win. That said I'm sure you've thought about these questions more than me so your intuitions about them likely better tutored than mine.

SamDeere @ 2020-11-17T19:18 (+4)

Yeah, I think the case of people not wanting to donate to EA Funds because of social/community dynamics (even if they think, on reflection, that they can't outperform EA Funds) is an interesting one. I guess that if someone is unsure if they can beat EA Funds (or some other 'boring'/deferent option) but that they feel like they'd be subject to social pressure to do something different regardless, that they could always enter anonymously (this doesn't solve the problem of people wanting to prove to themselves that they're good grantmakers, but hopefully goes some way to mitigating the issue).

We're also trying to provide good support to winners, in the form of contact with experienced grantmakers (including members from  each of the EA Funds). So, to the extent that this enables winners to 'import' that experience into their decision, while still being able to cast a wider net, it means that even less-confident donors will still be able to remain competitive with alternatives.

MichaelStJules @ 2020-11-24T18:50 (+11)

If the  organizations you would support  have decreasing marginal returns even at the scale of your personal donations without the lottery, that also seems like a good reason to avoid the lottery, although not necessarily decisive.

If you think you would not beat a particular CEA fund in expectation -- which you should expect if you're fairly value-aligned and have similar priors with one of them and don't otherwise have major consequential disagreements, since they work on evaluating grant opportunities full-time--, I think it would be better to donate to them, at least on the direct benefits to charities, since they do make grants to orgs with I think pretty quickly decreasing marginal returns (or at least the animal welfare one does, in my view).

Larks @ 2020-11-18T05:03 (+10)

Thanks for the writeup! I continue to think this is a cool idea, especially as it is so counter-intuitive to many people.

The lottery is administered by EA Funds, which is a project of the Centre for Effective Altruism (CEA). CEA can only make grants that are within its charitable objectives, and retains sole discretion over where the final grants are made. This means that we won’t make grants that run counter to broad altruistic principles, or to projects that don’t satisfy our regular due diligence requirements. 

Is there anything you can say about how often, if at all, this has been the case? I guess there have been relatively few winners in the past so I would guess the answer is 'never'?

SamDeere @ 2020-11-18T14:23 (+4)

Yeah, I think ‘never’ is correct for donor lottery winners thus far. I’d guess this situation would be pretty rare in practice (even as we run more lotteries), but we want people to be informed that there are some constraints. People have generally checked in with us beforehand if they’ve got something of an edge-case in mind, and the only times I can remember saying a hard ‘no’ were for partisan political organisations (which we can’t make grants to).

Jonas Vollmer @ 2020-11-18T14:47 (+4)

I haven't checked with our ops/legal team, but here are some examples of grants I personally would guess we probably can't make: political lobbying and partisan campaign funding, supporting individuals without a clear public benefit (e.g., giving people money to free up their time without an explicit expectation that they will do something good for the world), religious missionary work to save souls from hell, supporting very specific groups (e.g., distributing unconditional funding to all members of a particular EA group). Basically there needs to be a convincing common-sense argument that the grant is for the public benefit.

AmritSidhu-Brar @ 2020-12-07T16:36 (+7)

Are lottery winners subject to  conflict of interest restrictions similar to EA Funds? E.g. could a winner end up choosing to donate to an organisation they run or work at, or fund themselves or a connected party to do independent work? 

( I am currently undecided as to whether I'm going to donate to the lottery, but this question isn't a factor in that – just asking out of interest as the question occurred to me, seemed like it might be important, and I don't think I know what I would want the answer to be as a donor, so would be curious to hear the answer!)

Jonas Vollmer @ 2020-12-08T11:44 (+3)

We currently don't implement any measures to prevent people from making donations to their employer, whether through the donor lottery or as ordinary donations through the EA Funds website. The due diligence process for grants to individuals is much more thorough; if there was a potential COI we would investigate that carefully before making a grant. Most likely, we wouldn't allow people to fund themselves.

AmritSidhu-Brar @ 2020-12-09T09:00 (+1)

Makes sense, thanks!

So-Low Growth @ 2020-12-07T20:17 (+3)

Does this help (from the FAQs? "The lottery is administered by the Centre for Effective Altruism (CEA). The Centre for Effective Altruism is a registered charity in England and Wales (Charity Number 1149828) and a registered 501(c)(3) Exempt Organization in the USA (EIN 47-1988398). An entry to the lottery is a donation to CEA; CEA will regrant the lottery money, based on the recommendation of the lottery winner.

All grants made are at CEA’s sole discretion. This is a condition of CEA’s status as a tax-deductible non-profit (both in the UK and the US). Of course, CEA will make a good faith effort to act on the recommendation of the winning donor, but it is important to understand that this does not constitute a binding contract, and the final decision rests with CEA.

There are cases where it may not be possible to follow the winner’s recommendation. In particular, CEA is limited to making grants within its charitable objects (and in the US, within the scope of what the IRS would deem an 'appropriate organization' to regrant to). Judgements about whether a potential grantee is within this scope will be made on a case-by-case basis by CEA. If CEA determines that it cannot follow a recommendation, the donor will be contacted to discuss and be given the opportunity to provide a revised recommendation.

Broadly speaking, CEA should be able to regrant to any fund or organization on listed on Effective Altruism Funds, as well as nearly all other registered non-profit organizations in the US, the UK, Australia, Canada, Europe, and possibly other jurisdictions (assuming their organizational purposes don’t contravene CEA’s charitable objects, and we can verify their non-profit status).

CEA may also be able to make grants to organizations that are not registered non-profits, or projects that are run by unincorporated individuals. These requests will be assessed on a case-by-case basis.

If you are unsure about whether a potential grantee would be eligible, please get in touch before entering the lottery to discuss (contact details below)."

BrianTan @ 2020-11-26T13:43 (+3)

Thanks for this post! I just want to tell others that I had to read this part in order to understand the value of a donor lottery (and answer my initial objection to it):

"Your decision whether to participate should not depend on what others plan to do if they win.

Some people think that they should only participate in the donor lottery if other lottery participants would make their donations wisely. The intuition is that you want your money to go somewhere good, and that this might not happen if there are other donors who would allocate their winnings poorly. However, whether you participate or not, others will have the same odds of winning, and will be able to make the same decision if they win. Your decision can’t change that – neither for better, nor for worse [2]. 

This means that you can simply evaluate the lottery from your personal perspective: Would it be helpful to trade your donation for a smaller chance of winning a larger amount, so you can think more carefully about it? If so, you can safely assume that participating is helpful for you, and won’t change the expected outcomes for anyone else.

I was initially worried that my money would be going to an EA cause  that I don't prioritize as much, or an organization that I think is less effective (or one that I trust less), but basically I would be trading the chance of that for a chance to win a large amount that I could then grant to an organization I think is more effective (and/or would trust more). 

I still won't be donating to a donor lottery because I don't think I would like the pressure and responsibility of granting lots of other people's money yet in a way that they may disagree with. Being anonymous could  slightly circumvent this, but the responsibility would still feel like a lot. People who would be interested to become grantmakers though could consider donating here so they have a chance to be what it's like to be a large grantmaker.

Jesper @ 2020-11-24T21:41 (+1)

Where can I find more information about the tax deductability in the Netherlands? I can't find any information on the main  donor lottery page.

SamDeere @ 2020-11-25T12:01 (+11)

The Centre for Effective Altruism UK (the legal entity behind EA Funds' UK operations) is registered in the Netherlands as a tax-deductible charity.

When you get to the payment page you can select which country you'd like to donate in. To donate in a way that's tax-deductible in the Netherlands, select 'UK/NL' as your country, and then optionally select EUR as your currency code. You can donate via credit card or SEPA transfer.

ETA: I've updated the relevant FAQ entry to make this clearer.

WilliamKiely @ 2020-11-18T03:54 (+1)

Straw Poll: Is it better to enter a donor lottery anonymously or with one's name attached?

Jonas Vollmer @ 2020-11-18T14:51 (+5)

Some reasons for entering anonymously:

  • You might generally care about anonymity/privacy on the internet
  • You might want to avoid public attention in case you win (e.g., perhaps some people might send you unsolicited fundraising pitches (which I hope they don't), or you worry that you might feel pressured by other EAs to publish your grants or thinking)
  • You can always publish your name later, so entering anonymously has more option value

Some reasons for entering with your name attached:

  • It’s generally more exciting to know who else in the community is participating
  • It shows other people that you personally endorse the lottery as a serious way to donate effectively, which might encourage others to participate

I'm sure I forgot some points, so would be curious to hear what people think.

WilliamKiely @ 2020-11-18T22:57 (+19)

Given these reasons (and others) it seems there may be value in letting people enter with their name attached, but not revealing that person as the winner if they win.

Jonas Vollmer @ 2020-11-19T09:28 (+4)

Good point. I think this would probably involve some coding effort which I'm not sure is worth it, but it's worth considering.