Why you should allocate more of your donation budget to effective giving organisations

By Luke Moore šŸ”ø @ 2024-11-08T14:19 (+136)

This post is written in my personal capacity, but is based on insights that Iā€™ve gained through my work as Effective Giving Global Coordinator and Incubator at Giving What We Can since I took on the role in June 2023.

Tl;dr

In my view the average reader of the EA Forum should be giving more to meta-charities like effective giving (EG) organisations. EG organisations play a crucial role in directing funds to highly impactful charities, but many are facing significant funding constraints and/or a lack of diversified funding. Supporting these meta-charities can have a multiplier effect on your donations, potentially leading to extraordinary growth in effective giving. Consider allocating a portion of your donation budget to EG organisations this giving season.

Introduction

When I first heard about EA back in 2017 from a TED talk by Peter Singer, I was inspired by the idea that we could carefully use evidence to maximise our positive impact on the world. At the heart of this movement were organisations dedicated to promoting effective giving ā€“ groups that not only identified the most impactful charities but also inspired and guided others (including me) to donate more and more effectively. I took the šŸ”ø10% Pledge days later.

These EG organisations have been instrumental in channelling hundreds of millions of dollars to highly effective charities and they've helped countless individuals, including myself, navigate the complex landscape of high-impact charitable giving. However, I didnā€™t donate a penny to these meta-charities that operate one step removed from direct impact interventions, for many years, preferring to donate to high impact charities working directly on problems themselves. In my view, by doing this as a community, we risk leaving significant impact on the table. These meta-charities can focus on the infrastructure, evaluation, and strategic guidance necessary for the broader field to maximise effectiveness and impact. They are essential in bridging gaps, identifying high-impact opportunities, and enabling other organisations to achieve or amplify their end-product impact.

What I have come to see through my work as Effective Giving Global Coordinator and Incubator at Giving What We Can over the past 18 months is that many of these meta-charities that I work with closely in the effective giving ecosystem are facing funding constraints and/or a lack of diversified funding sources (the issues of which have been highlighted here and here). This is limiting their potential impact and, by extension, the potential impact of the entire effective giving ecosystem.

You might wonder, "If these organisations are so effective at raising money for charities, why are they struggling to fund themselves and diversify their funding?"

Why EG orgs are funding constrained

EG organisations face a paradox: they're excellent at raising funds for other charities but sometimes struggle to secure their own operational funding. This stems from several factors:

The EG ecosystem is also growing at a formidable pace. Since the start of 2023, we've seen approximately 15 new organisations enter the space. This growth presents both opportunities and challenges. More organisations mean more capacity to raise funds for effective charities. Also as the most successful organisations expand, their operational costs increase, requiring more funding. All of this means that roughly the same pool of meta-charity funding is now spread across more organisations.

Additionally, the largest funder in the EG ecosystem (Open Philanthropy) is aiming to fund no more than 50% of any organisation's budget to encourage the cultivation of a diverse donor base and to help support a wider variety of organisations. Melanie Basnak at Open Philanthropy (the largest grantmaker in this space) says that she has been ā€œimpressed with what a lot of the orgs in the effective giving ecosystem have achieved and expect to keep supporting this space ā€¦ [However, Open Philanthropy] have a limited annual budget and expect to increasingly expand into [their] other strategic areasā€. This makes a higher level of funding diversification in the ecosystem increasingly important to the long term success of EG organisations.

In my view, there are still many untapped opportunities to launch new EGIs (e.g. in Japan, which has over 3% of global GDP but where there is no organisation promoting effective giving). However, as with existing organisations growing and hiring more staff, newly founded organisations also create additional demands on the already small pot of funding set aside for these effective giving organisations.

Why should you donate to EG organisations?

Here are a few reasons why funding EG organisations can be highly impactful.

The multiplier effect

EG organisations have the potential to influence far more donations than the amount they receive. As their main output, these ā€˜giving multipliersā€™ cause more money to be given to high-impact interventions and organisations. For example, our best-guess estimate is that every $1 donated to Giving What We Can between 2020ā€“2022 has caused / will cause $30 to be given to highly effective charities. For more information on this estimate and associated caveats see our 2020-2022 impact evaluation.

This is an incredible opportunity. As a community it is incredibly important that we think strategically about how to move as much money as we can to high-impact projects because many new highly impactful charities have gotten started over the last couple of years aiming to solve the world's most pressing problems, and should hope and expect this to continue. However, as AIM has previously written about, there are still significant gaps in funding for these charities, which pose a significant risk to their survival and impact over the long term. Even many established highly impactful charities (in particular global health charities) have significant room to absorb more funding effectively (see AMF room for more funding as an example).

See this report into giving multipliers by Founders Pledge for more information.

Positive indirect impact

Apart from the direct effects of encouraging donations to cost-effective causes, promoting effective giving can also have indirect effects - such as promoting more evidence-based, impact-driven, and transparent thinking in the philanthropic sector. Research also suggests that donating to effective charities is a significant entry point to other effective actions. For example, in the 2020 Survey run by CEA, 21% of respondents reported that Giving What We Can was important for them getting involved in Effective Altruism, with ~14% of respondents reporting that GWWC was one of their three largest influencers for their ability to have a positive impact.

Potential for significant growth

The EG ecosystem wants to find ways to scale the current ~$1 billion to (say) 10s of billions of dollars moved to high-impact funding opportunities each year. Note that this would still only be ~10% of the $500B of donations made in the US every year; this seems like an ambitious but achievable goal. However, to achieve this goal, the ecosystem will need a lot of operational funding in order to test, iterate, and eventually work out which strategies ā€“ if any ā€“ can help scale our impact to billions or even 10s of billions of dollars donated to effective charities per year. EG organisations have demonstrated solid multipliers, now these organisations need the funding to grow and explore new strategies to really test whether and how they can scale.

Addressing future funding constraints

Even if you believe that talent constraints are currently the biggest challenge for EA, it's prudent to start investing in solving the funding constraints that would inevitably emerge in the future should we succeed in meeting our talent needs. This is especially true given that many high-impact organisations are indeed funding constrained right now (as mentioned above). This investment in the future of Effective Altruism can pay dividends as EG organisations grow and move more money to effective charities over time.

The impact of additional funding

What would change if EG organisations were well-funded? Here are some potential outcomes:

Why you might not want to donate to EG organisations

It's important to acknowledge that donating to EG organisations may not align with everyone's giving strategy. Here are some reasons why someone might choose not to donate to EG organisations:

These are all valid considerations. However, for those open to supporting meta-charities, Iā€™ve collected what information is publicly available about the impact of various EG organisations.

Where to give?

As a starting point, here are a few EG organisations with public information about their effectiveness. Iā€™ve also contacted EG organisations asking them to give a sense of their current funding gap and/or what they would use additional/marginal funding for.

Giving What We Can

Shameless self-promotion, but here we go. As of 2024, Giving What We Can has inspired over $375 million USD in donations and more than 9,000 people in ~100 countries have pledged to give a significant portion of their income to effective charities.

In our latest internal impact evaluation, we estimated that from 2020 to 2022:

Additionally, a 2024 external evaluation of GWWC by the Centre for Exploratory Altruism Research (CEARCH) did attempt to estimate the value of an additional dollar (it looked at marginal cost-effectiveness while our internal impact evaluation looked at average cost-effectiveness) and estimated that every additional $1 GWWC spends on promoting pledging in 2025 will have an impact equivalent to generating $13 for GiveWell top charities. (Note that CEARCH acknowledges high uncertainty in their estimates.) When CEARCHā€™s model is adjusted to show average cost-effectiveness in the 2019ā€“2024 period, it yields a similar estimate to the 30x we estimated in our internal impact evaluation, with an estimated multiplier of around 40x.

A recent Open Philanthropy blog post suggests that individual donors support Giving What We Can, due to both its evidence of impact and funding gap.

Grants from impact-focused grantmakers/funds: Open Philanthropy 2021, 2023, 2024, Meta Charity Funders 2024.

"We currently have ~1 year of runway which we aim to sustain and build on: we will likely do a small (~300k USD) fundraise for our 2025 Q1 budget soon, and expect to do a larger fundraise after completing our strategy review process in early 2025. Additional funding would be used for our new 10%-Pledge-focused strategy, including hiring additional growth capacity and funding digital marketing campaigns around the pledge. It would also help GWWC diversify its funding by making us less reliant on our largest funder Open Philanthropy (which currently provides ~50% of our funding)"

[Donate to support Giving What We Can]

Effektiv Spenden

Effektiv Spenden is an effective giving platform in Germany and Switzerland that was founded in 2019. In 2022, they moved ā‚¬15.3 million to highly effective charities, amounting to ā‚¬37 million in total donations raised since Effektiv Spenden was founded.

In their latest internal impact evaluation, they estimated that from 2019 to 2023:

A recent Open Philanthropy blog post suggests that individual donors support Effektiv Spenden, due to both its evidence of impact and funding gap.

Grants from impact-focused grantmakers/funds: Open Philanthropy 2022, Founders Pledge 2023.

ā€œWe are currently not really funding constrained and still have an ok runway. Any additional funding would extend our runway and/or be spent on marketing and outreach based on the impact of experiments we are running this Giving Seasonā€

[Donate to support Effektiv Spenden]

Founders Pledge

Founders Pledge launched in 2015 as a philanthropic community with a mission to bridge the gap between entrepreneurs and the charities making the most difference in the world. 

To date, Founders Pledge has raised over $10bn USD in charitable commitments from its community of almost 2000 members, with over $1.3bn USD already deployed to the charitable sector. Of this, over $250m USD has been donated to high-impact charities. For its members, Founders Pledge offers end-to-end giving services, including high-impact charity recommendations vetted by an in-house Research team. Founders Pledge also operates four thematic Funds open to the public, making effective giving accessible in areas such as climate change, AI safety, and bio-security.
Founders Pledge seeks to maximise philanthropic impact by conducting rigorous charity research and educating entrepreneurs about how and where to give effectively to help solve the world's most pressing problems. 

In 2023, for every $1 invested in Founders Pledgeā€™s mission, $22 was donated to the charitable sector and $11 was granted to their high-impact giving recommendations. See their 2023 impact report for more information.

Grants from impact-focused grantmakers/funds: Open Philanthropy 2021, 2023, Meta Charity Funders 2024.

"Additional funding will allow us to extend our runway and amplify our impact for years to come by growing our team, increasing research capacity, and expanding marketing efforts to increase public donations to our Funds"

[Donate to support Founders Pledge]

Ge Effektivt

Ge Effektivt is an effective giving platform in Sweden that was founded in 2021.

They've estimated that from 2021 to 2024:

Grants from impact-focused grantmakers/funds: EA Infrastructure Fund 2021, Meta Charity Funders 2024

"We currently have enough runway to last us until the end of February. We have a yearly budget of ~$270k USD expected to rise slightly going forward to ~$300k USD leaving us with a funding gap of ~$830k USD over the next 3 years provided we don't increase personnel and keep expenses to a minimum. No investments, pure survival. We could dream of actually being able to invest things as outreach, easier payment solutions and a robust fundraising CRM but at the moment such dreams feel far off. Failure to close our funding gap for 2025 and beyond would significantly impede our ability to capitalise on the momentum we've built over the past year"

[Donate to support Ge Effektivt]

Giving Multiplier

Giving Multiplier is an evidence-based donation platform created by Harvard psychology researchers that allows and incentivises people to make paired donations to their favourite charities and highly effective ones.

Giving Multiplier was evaluated as part of Ambitious Impact (formerly, Charity Entrepreneurship)'s Research Training Program in Autumn 2023. The evaluation calculated the average net multiplier and the marginal net multiplier for Giving Multiplier. The average net multiplier between September 2020 and December 2023 was found to be between 5.4x (conservative estimate) and 18x (optimistic estimate). The marginal net multiplier for 2024 was found to be between an ineffective 0.32x (conservative) and 34x (optimistic). (Note that the main researcher acknowledges high uncertainty in their estimates.) See the full 2023 impact report.

Grants from impact-focused grantmakers/funds: EA Infrastructure Fund 2020, Founders Pledge 2023, Meta Charity Funders 2024.

ā€œWe're currently fully funded through March 2025, but recently began fundraising for an additional 12 months of support, with an annual budget of approximately $250k USDā€

Contact Matt Coleman, Executive Director at Giving Multiplier (matt@givingmultiplier.org), with questions or to discuss donating >$5k USD to support Giving Multiplier.

[Donate to Giving Multiplierā€™s matching fund]

The Life You Can Save

TLYCS aims to combat extreme poverty by connecting donors to highly effective giving opportunities, and inspiring and empowering philanthropic actions.

In 2021, The Life You Can Save helped raise over $22.7 million USD globally for its recommended charities. It did this through engaging fundraising campaigns and free, easy-to-use donation tools hosted on its website. They've estimated that each dollar invested in their work has generated an average of $18 in donations for their recommended charities. See their 2021 impact report.

Grants from impact-focused grantmakers/funds: Founders Pledge 2023.

I donā€™t have any information about The Life You Can Saveā€™s current funding gap and/or what they would use additional/marginal funding for.

[Donate to support The Life You Can Save]

Other established EG organisations

Unfortunately, most organisations have not published evaluations meaning that itā€™s not completely transparent how effective they are.

One good option if you want to make a potentially high-impact donation to an EG organisation is to see whether it has received a recent grant from an impact-focused grantmaker or fund e.g. Open Philanthropy, Meta Charity Funders, EA Infrastructure Fund, or Founders Pledge.

Here are some EG organisations that Iā€™m aware of having received grants.

Ayuda Efectiva

Doneer Effectief

Gi Effektivt

High Impact Athletes

One For The World

New EG organisations

Another way to make a potentially high-impact donation to an EG organisation is to give to a newly incubated organisation from a highly regarded incubation programme.

As mentioned earlier, AIM has incubated and seed funded several new effective giving organisations in 2023. Whilst being an AIM incubated organisation is not a guarantee of an organisation's effectiveness, it is a strong indicator that they could be a solid bet for those more interested in a high risk, high reward donation strategy.

Here are a few organisations that Iā€™m aware of having received seed funding through an AIM incubation programme.

Benefficienza

Ellis Impact

FarmKind

Impactful Giving

Mieux Donner

Call to Action

As we approach Giving Season, I ask that you consider the crucial role that these organisations play in the EA funding landscape and add an EG organisation to your donation portfolio.

Please DM me if this post has had any effect on your donations as it is really helpful to understand whether making the case for EG organisations publicly is a valuable use of time. 

Ian Turner @ 2024-11-10T03:19 (+17)

Iā€™m not necessarily disputing the idea that donating to these sorts of fundraising organizations is a good use of money; but we also need to be careful about double-counting. Itā€™s tempting to try to take credit for oneā€™s own meta donations while object-level donors are also taking full credit for the programs they fund.

My practice, perhaps adjacent but not identical to the one proposed here, is to give 15% of a donation to the charity evaluator or facilitator that introduced me to the main charity or program. In recent years thatā€™s been GiveWell, and the fact that they have an excess funds regranting policy makes this an even easier decision.

Paul_Lang @ 2024-11-14T00:59 (+6)

Yeah, the double accounting question can be a problem. It is inherent to counterfactual impact. Imagine a production chain X -> Y -> Product. Then counterfactually, X can call 100% dips of the product; as can Y. So together, they have 200%, which does not make sense.

However, there are alternative impact metrics. For example, Shapley values have some nice properties. In particular, they guarantee that they sum up to one. Intuitively, they calculate the mean counterfactual impact for each player over all possible configurations of players. This can be useful to assess important predictors in statistical modles. But it is also the reason why I don't find them partucularly useful for decision making. After all, you are not interested in your impact in hypothetical worlds, but just in your impact in the current constellation of the world, i.e. your counterfactual impact.

So in summary, I'd say use counterfactuals for decision making and Shapley values for determining bragging rights ;)

Luke Moore šŸ”ø @ 2024-11-11T11:41 (+1)

Thank you for raising this important point about double-counting, Ian! This is something we go to great pains to avoid when evaluating the counterfactual impact of fundraising efforts in the effective giving space. For example, we're careful not to count donations that would have happened anyway or were primarily inspired by other organisations when accounting for our own organisation's counterfactual multiplier. 

Where I see it a bit differently is around the question of individual impact credit. Rather than worrying about dividing up credit between meta-donors and direct donors, I think what matters most is maximising our collective impact as a community. When you donate to an EG organisation, you might indeed be counterfactually responsible for 2x or more money going to effective charities - and so too are the people who choose to donate after learning about effective charities through your meta-donation. Since we're all working toward the same goal of maximising good done, this isn't a zero-sum game where we need to divide up credit.

This accounting question really only becomes crucial when we need to make decisions about where to direct scarce funding - we want to fund the organisations that will be most effective at growing the total pool of donations to effective charities.

That said, I think your approach of allocating 15% to evaluators makes a lot of practical sense as a way to sustainably support the ecosystem. It aligns nicely with the thrust of Ollie Base's argument in his post "Consider donating to whoever helped you" while avoiding getting too caught up in precise impact attribution. And as you note, GiveWell's excess funds regranting policy makes this particularly straightforward in their case and this policiy is something we are working to put in place at GWWC too.

Henri Thunberg šŸ”ø @ 2024-11-09T16:49 (+15)

Thank you for this writeup Luke, and in general for the tireless work you do to help improve these organizations.

I'm likely to make my end of year donations toward something in this space, and would be excited to chat through the decision with others, and possibly coordinate. If you're willing to spend some time on this, feel free to leave a comment or DM for setting up a call. :)

Luke Moore šŸ”ø @ 2024-11-11T09:49 (+1)

Hey @Henri Thunberg šŸ”ø really exciting that you'll be making a donation in this space. Happy to talk this through with you if you'd like :) I've DM'd you :) 

Paul_Lang @ 2024-11-14T01:15 (+7)

I always donate close to 100% to what I believe is most effective at any given time. I do "diversify" across time, though. Last year, I almost donated 100% to an Effective Giving organization. In the end, I decided against this, because (a) their average donor was giving mostly to global health and development, while I was thinking that AI safety would be more effective by a factor much larger than their multiplier, and (b) the multiplier effect probably shifts this balance even further against my preferences.

There is of course an argument that it is only a question of time until newly acquired donors board the train to "crazy town" and give to more speculative causes with higher EV. But I was working under the assumption that the multiplier effect probably mostly reaches a demographic that likely sticks to their existing world views.

CBšŸ”ø @ 2024-11-08T16:10 (+3)

This is a convincing post. 

 

I didn't think often about doing that, but the multiplier effect seems considerable - dedicating fundraising to professional seems like a good bet.