GiveWell raised less than its 10th percentile forecast in 2023

Copying Chandler's response from the comments of the open thread:

Hi Arnold,

Thanks for your question! You are correct that our funds raised for metrics year 2023, $355 million, was below our 10% percentile estimate from our April 2023 blog post. We knew our forecasts were quite uncertain (80% confidence interval), and, looking back, we see two primary reasons that our forecasts were incorrect.

First, we were optimistic about the growth of non-Open Philanthropy funding. Our funds raised in 2023 from sources other than Open Philanthropy was $255 million, which is about at our 10% percentile estimate and is similar to the $253 million we raised in 2022 from sources other than Open Philanthropy (see the bottom chart in the blog post). We've continued to expand our outreach team, with a focus on retaining our existing donors and bringing in new donors, and we believe these investments will produce results over the longer term.

Second, Open Philanthropy committed $300 million in October 2023 and gave us flexibility to spend it over three years. We chose to allocate $100 million to 2023, 2024, and 2025, which is less than the $250 million we had forecast for 2023.

We discuss our current funding situation in a recent blog post about our approach to grant deployment timelines. We remain funding constrained at our current cost-effectiveness bar. Raising more money remains our single most important lever for maximizing impact---if we have more funding, we'll be able to make more grants to cost-effective programs that save and improve lives.

I wonder if this is mostly an effect of total effective giving growing less than GiveWell anticipated, or if more money is going to other effective giving opportunities.

Some evidence for the latter would be that in Europe different effective giving initiatives are growing (for example effektiv-spenden in Germany raised 13 million in 2022, and 19 million in 2023, doneer-effectief in the Netherlands raised 700.000 in 2022, and 2.5 million in 2023, I don't know if there is a similar trend in other EU-countries). I sense that within EA there is some shift in focus to causes such as animal wellbeing. Anecdotally I shifted my giving away from GiveWell towards the Doneer-Effectief animal wellbeing fund.  

However, these trends are not totally unexpected and in size might only explain a fraction of the 75 million difference between the median estimate and actual data of non-open philanthropy funding. Does anybody have a good sense of how effective giving as a whole changed between 2022 and 2023?

The other number I found potentially concerning was the 50% drop in year-over-year funds from new non-anon donors (p. 10 of the 2023 metrics report, see paste below). Funds from new/non-anon donors in 2021 were slightly higher than in 2022 per the 2022 metrics report, so the prior year wasn't the anomaly. 

I don't want to over-update on a single year's Y/Y difference, but my concern would grow if 2024 ended up similar to 2023.

I would not have predicted much effect of the FTX affair on GiveWell's new donor acquisition, but it's possible that played a role.

DavidNash @ 2025-01-21T13:13 (+10)

Another thing to look at would be how donations in general changed in 2020-2024. From what I've read, there have been decreases in US giving (of around 2%).

David Mathers🔸 @ 2025-01-21T12:47 (+4)

FTX was late in 2022, but nonetheless 2022 already shows most of the drop in new donors. 

Jeff Kaufman 🔸 @ 2025-01-21T15:43 (+6)

I would expect most donations to be in giving season, though, which in 2022 would be after FTX collapsed

Jason @ 2025-01-21T15:56 (+3)

Good observation -- most of the drop in the number of new donors was seen in 2022, but little of the drop in the amount of donations from new donors happened then [$43.4MM (2021) vs $41.1MM (2022) vs. $20.5MM (2023]. Because of their size, the bulk of the 2021 --> 2022 drop was almost certainly people giving under $1,000, which is somewhat less concerning to me due to the small percentage of GiveWell's revenue that donations under $1K provide (less than 3%). There are a good number in the $1-$10K range, but they did not show a significant decline overall between 2021 and 2022. 

Presumably, the 2022 --> 2023 drop in revenue involved loss of new higher-dollar donors. My assumption is that higher-dollar donors act somewhat differently than others (e.g., I expect they engage in more due diligence / research than those donating > $1,000 on average). So it's plausible to me that the 2021 -> 2022 numerical decline and the 2022 --> 2023 volume decline have (or do not have) very similar causes. I'd guess FTX might hit higher-dollar new donors more because of the extra due diligence. 

The following chart is for all donors, not new ones: