How much extra funding can EA AWF regrant?

By KarolinaSarek🔸 @ 2024-11-13T13:44 (+100)

In the previous post, we covered what we've accomplished so far in 2024, our impact this year, recent changes, and where we're headed next. This post will dive deeper into our biggest, current constraint to impact - funding for regranting. 

Executive Summary

The EA Animal Welfare Fund (AWF) currently has significant room for more funding (RFMF). Our estimate suggests that in the coming 12 months, we could productively absorb and grant out approximately $6.3M ($5.3M-$7.3M) more than we granted this year at roughly a similar level of impact. This RFMF is due to a number of promising opportunities coming from open application form, growth in the area, changes in the funding landscape, new opportunities from incubators, opportunities for active grantmaking, and plans to scale operations under new leadership. The fund has a new full-time chair and is prepared to effectively utilize additional funding.

Total regranting RFMF breakdown:

• Funding more applications: $1.5M
• Funding scale-up of past grantees and growth of promising fields: $1M
• Additional funding opportunities from increased outreach: $500k
• Funding new opportunities available due to changes in the funding landscape: $1.75M
• Funding new organizations coming from incubators: $500k
• Conducting more active grantmaking: $2M

Additional RFMF for AWF operations:

• The remaining base funding gap for this year: $39k
• Additional funding to increase fund manager capacity to deploy the higher end of regranting RFMF: $60k-$100k

Though $6.3M may seem like a substantial amount, every additional donation increases our ability to fund promising opportunities. While there are a few donors who make annual contributions of $20k-$500k, 99% of our donors make annual donations smaller than $5k, which together have enabled us to grant $23.3M over the years. One of the most encouraging aspects of our funding model is that each donation, regardless of size, directly translates to either funding more high-impact projects or increasing support for the most effective initiatives. Having a diverse donor base has proven crucial for our long-term stability and consistently funding high-impact projects across different areas of animal welfare.

Analysis of RFMF

Briefly, here's why the Animal Welfare Fund has significant room for more funding at this point:

As a baseline, in unusually good times, we have as much funding available as promising grants coming from the open application form, and during a standard period, significantly less  — estimated RFMF over the next 12 months: $1.5M

• In unusually good times:
  • Over the last 3 months, AWF saw a significant unexpected spike in funds available (largely due to one major donor contributing ~$530k). That meant that we had $1.4M available for that period.
  • During that time, we evaluated 64 grants, totaling approximately $5M. We decided to provide 15 grants totaling $1.1M, at a 24% acceptance rate.  This was a great period, as we had about as many funds as applications above our bar for expected impact.
• During a standard period:
  • However, the earlier months of the year weren’t as well-balanced since, on average, we had $440k available for a 3-month period.
  • For an average 3-month period, we approved and paid out only 9% of the applications we evaluated.
  • Since there is no reason to think that we have received fewer promising applications in an earlier part of the year than the latest, that means that we could have funded 15% (24%-9%) more opportunities if we had more funding. To illustrate the potential loss of impact, here are real (although anonymized) examples of projects over that period of time, that we likely would have funded if we had more resources available:
    • Funding an advocate in India with a strong track record to scale their successful policy advocacy work aimed at increasing the welfare of chicken and fish to another large producing state in the country,
    • Funding a reliable group working on cage-free campaigns in a country in Africa,
    • Funding a research group to aid one large and one medium organization in prioritizing and choosing the most evidence-based and cost-effective interventions for their next campaigns.
• Conclusion:
  • The recent, unusual spike in funding available showed that AWF could effectively deploy more funding than it has available on average. As the above estimates suggest, over a period of 3 months, the gap could be as large as 15% in applications funded, or $660k ($1.1M-$440k) in the amount granted. Extrapolating that over to a whole year could mean $2.6M. This is a slight overestimate since AWF received the bulk of its funding during Giving Season, so by adjusting the number for that, we estimate an RFMF of $1.5M for opportunities coming from our open application form over the next 12 months. 

The need for funding from past AWF grantees is likely to be higher — estimated RFMF over the next 12 months: $1M

• Many of our grantees have grown, so they'll have more room for funding. As many of the groups we give to are relatively small, they can productively grow at such a rate that they'd often be looking to absorb twice as much funding in the year following their initial grant. For example, consider Animal Welfare League — a promising group working on cage-free efforts in Ghana and supporting other groups' efforts in Africa. In 2022, we granted them $20k, the next year $40k, and this year $80k. This corresponds to 100% growth in grant amount each year. Generally, it seems that if we have more money in the fund, it encourages some good organizations to request more funding for quality projects. Even though these groups have grown and need more support,they are still not going to be at the size that large institutional donors/philanthropies will always grant to, so AWF is still needed to fill that gap (until the groups are needing many hundreds of thousands per year), and even then it is more robust for organizations to have a wider set of donors rather than rely on one, big supporter. Our estimate is that over the next 12 months, AWF could use an additional ~$400k for past grantees scaling up.
• Relatedly, some of the areas we grant in tend to be high-growth and grow at comfortably >20% year-on-year. For instance, a few years ago, there were very few promising grants that could be given to invertebrate welfare, but over the last year, we made several hundred thousand dollars in grants within that area. Recently, more groups have started in this area and they will likely seek funding in the future. My estimate is that over the next 12 months, there could be ~$300k more in new opportunities in these high-growth areas.
• Changes to the funding landscape, most notably the decision of Good Ventures / Open Philanthropy to exit many areas that AWF is supporting (such as shrimp welfare, research and advocacy in farmed insects, and wild animal welfare), means that:
  • The grantees have higher funding needs. Even though the Navigation Fund (NV) agreed to pick up grantees Open Phil is exiting for their current grant amount, they are not excited about funding scaling efforts in these areas. Those areas also tend to be neglected by other funders, meaning that grantees have reduced funding diversity and have lower prospects for scale-up funding, even if they achieve significant impact.
  • Assuming it is optimal for those organizations to scale up by 10% of their current budget, that would mean the need for ~$478k more. These areas are extremely neglected by other funders, and my estimate would be that AWF would cover at least $350k of funding in high-impact areas neglected by other funders.

If we had more funding, we have the capacity and opportunity to do more outreach to receive more applications — estimated RFMF over the next 12 months: $500k

• Analyzing data since 2020, we've observed that the number of applications has been increasing, while the proportion of funded applications has consistently varied with the amount of funding available to the Fund, averaging around 19%. This suggests that the funding available to the Fund predicts the number of applications funded better than the number of applications received does, indicating a funding gap.
• However, examining responses to the "How did you hear about the fund?" question, we found that most applicants have been repeat grantees, with the second most common answer being that they are deeply involved in the EA community. This suggests there may be a large untapped potential pool of applicants in the broader animal movement.
• Based on these observations, I estimate that we could generate an additional $500k worth of funding opportunities if we conducted more outreach.

Changes to the funding landscape create new opportunities for funders to cover high-impact areas that would otherwise likely not be funded — estimated RFMF over the next 12 months: $1.75M

• As mentioned earlier, a recent decision by Good Ventures/Open Philanthropy has significant consequences for the funding landscape. One additional implication is that Open Philanthropy is no longer able to make grants in areas they had started investigating and were potentially planning to fund. These future funding opportunities total approximately $2.7M per year. Assuming that 80% of those opportunities are above our funding bar , and that out of those, other funders will cover 20% of them , means that AWF may be well-positioned to fund ~$1.75M in grant opportunities in new promising areas. 

There will likely be new promising organizations and projects coming out of incubators — estimated RFMF over the next 12 months: $500k

• Several groups in the ecosystem, such as Charity Entrepreneurship/AIM, Welfare Matters, and Kickstarting for Good, explicitly focus on creating new effective organizations. On average, AIM starts 4 new animal charities per year, and due to their impact, many of them become future AWF grantees. We assume we will fund 3 out of 4 of them with $100k each. Welfare Matters' incubator is a new project, but we expect it may produce at least 2 projects that we will be interested in supporting with $50k each. We expect that Kickstarting for Good will produce 1 opportunity we would like to fund for $100k. This indicates that there may be $500k worth of funding opportunities coming from incubators over the next year.

AWF is excited to do more active grantmaking if we had more funding available — estimated RFMF over the next 12 months: ~$2M

• Active grantmaking can often have more impact than funding opportunities coming from open applications, as it tends to be more strategic and have greater counterfactual impact since these projects might not happen otherwise. Therefore, AWF is excited to do more grantmaking of this type.
• We are aware of at least 10 potential opportunities that could each use between $1.5 and $3M, which may be above AWF’s bar. For example, funding coordinated, aligned fish welfare work across a strategic region;  testing corporate cage-free accountability campaign strategies in neglected regions; expanding farmed animal movement building and intervention testing in priority countries lacking farmed animal protection groups. Assuming that 20% of them would successfully pass our evaluation process, we could potentially deploy $4.5M in active grantmaking. However, given that active grantmaking tends to require more capacity than passive grantmaking, in the first year we would aim to narrow the range of projects considered and deploy $2M, with the potential for growth in future years.

Putting the above bullets together, the Animal Welfare Fund has significant room for more funding. Our estimate suggests that we could productively absorb and grant out approximately $6.3M ($5.3M-$7.3M) at roughly a similar level of impact. The range indicates amounts inclusive and exclusive of active grantmaking opportunities. To increase our efforts in active grantmaking, we would likely have to increase our capacity by 0.5- 1 FTE. Even if we do not count any active grantmaking, we could still comfortably and effectively deploy an additional $5.3M next year.

It's worth noting that in previous years, we have been able to make such jumps in grantmaking volume. In 2020, we granted out approximately $1.7M in total, more than doubling that to approximately $4.1M in 2021, and increasing to $7.4M in 2022, before decreasing to $3.3M in 2023. We believe we can at least handle the 2020-2022 levels of either absolute growth ($5.7M) or percentage growth (335%), which would put us in the $9M-$11M range, so I believe we would comfortably and effectively deploy the additional $6.3M estimated above. Moreover, given that the AWF has a full-time chair increased our capacity and allows us to execute the strategy to effectively deploy that amount of funding.

What Does a Marginal Grant at AWF Look Like? 

This list includes examples of grants that we would be able to make with an increased amount available for regranting. It covers marginal grants we weren't able to fund in the last 6 months, opportunities for higher amounts of funding for promising grantees, new promising areas of grantmaking, and ideas for active grantmaking.

• Policy advocacy to increase welfare measures for chicken and fish in a high-production state in India by an organization with a track record in the area ($82k)
• Cage-free work focused on farmer and corporate outreach in Zimbabwe ($12k)
• Policy advocacy focused on banning octopus farming in Chile and Mexico ($60k) and hampering operations of this industry in the EU ($100k) by groups with strong track records for similar efforts
• Funding an experienced Chinese litigator to start a policy and legal institute setting the foundation for farmed animal welfare-focused policy change in China ($50k)
• Funding research on welfare effects of farming practices in the shrimp industry that will inform certification schemes (~$200k)
• Scale-up funding for an organization with an impressive track record in increasing availability of plant-based products in retail and restaurant sectors ($115k)
• Investor outreach to reduce support for and slow down the growth of the insect industry ($300k)
• Additional ~$220k for a promising group working on enforcement and implementation of cage-free commitments in SE Asian countries and China
• Additional ~$100k funding for an extremely experienced campaigner setting up a new organization working on securing corporate commitments for numerous neglected species, an area where there is a strong track record of cost-effective work
• Training and capacity building in key skill and competence areas needed in the farmed animal movement ($300k)
• Funding organizations to work on corporate outreach for fish in the EU ($600k)

RFMF in AWF’s Operating Expenses 

Additionally, due to the scale-up of the fund's operations, AWF also has a small RFMF in its general operational expenses. We have a remaining funding gap of $39k. 

If we were to increase fund manager capacity to deploy the full estimated amount for active grantmaking, we would need to hire 0.5-1 FTE, requiring an additional $60k - $100k.

Conclusion

EA Animal Welfare Fund could effectively regrant $6.3M ($5.3M-$7.3M) more than it did this year. Every donation—regardless of size—helps us fund more high-impact projects, and with new leadership and scaling plans, we are well-positioned to effectively deploy these additional funds for animal welfare.

If you have any questions or would like to discuss the plan, feel free to ask follow-up questions or reach out to the new Chair of the Fund, Karolina Sarek (me), at karolina@effectivealtruismfunds.org.

You can also donate directly to the AWF here.