Framing grants to wealthy donors

By Aaron Boddy🔸 @ 2021-03-16T09:53 (+7)

In this post, I suggest that EA-aligned organisations should frame high impact grant opportunities (HIGOs) as particular outcomes to donors who can achieve them alone or in small groups - who I’ll refer to as high net worth donors (HNWDs).

I think the idea of an EA-aligned org framing a HIGO as a tangible goal that they can “put their name to”, and that could be achieved by a single HNWD, would be incentivising. For example, The Gates Foundation has set itself the goal of eradicating polio worldwide (and have made tremendous progress) - what a legacy! 

My assumption here is that it would be more beneficial to package together funding recommendations for HNWDs in the form of a high-impact one-off donation to achieve a particular outcome, which is different to the way we make recommendations for regular income donors, e.g. encouraging regular donations such as the Giving What We Can pledge. 

Introduction

As someone on a modest income that has taken the GWWC pledge, if I hear about a new exciting charity opportunity X that requires an initial donation of ÂŁ50,000 to get off the ground, there’s not much I can do about it. My offer of a monthly donation of ÂŁ200 isn’t going to be much use. I could donate to a pooled donation like EA Funds (which I do) and try to make the case for charity X, but this isn’t guaranteed. However, if I were a HNWD and I heard about charity X, I could make the ÂŁ50,000 grant donation without any noticeable drop in quality of life. 

My question is - if I were a HNWD, how would I find out about exciting HIGOs without first investing lots of time in research myself (with most HNWDs still in the act of running their businesses, wanting to invest wisely, and with due diligence, but not having the staffing or the experience)? How would I decide to fund a particular opportunity and what convinces HNWDs to give? Wouldn’t it be great if EA-aligned orgs packaged HIGOs that can be marketed to a HNWD as particularly high-impact outcomes?

Examples of things that are related to my proposal, but not quite the same thing:

These are great, but as far as I’m aware, they don’t give specific HIGO recommendations that can be “picked up” by a single HNWD. (If I’m wrong about this, let me know — I’d love to see examples of this already being done!). Lever For Change in particular I was excited about, however, LFC sources recommendations for their donors through competitions, whereas I’m hoping to normalise having ready-made grant opportunity lists for donors to select from (and who don’t want to run a competition).

My assumption here is that HNWDs may be more likely to donate a large amount of money if they can “put their name to something specific” (like a university building) and would find it useful to have many HIGOs to choose whatever appeals to them. Which leads me to...

Framing grants as particular outcomes

The Payout Reports provided by EA Funds (Global Development,  Animal Welfare, Long-Term Future and Effective Altruism Infrastructure) represent some really interesting HIGOs that EA Funds have gone to over the years. These fund payouts include the payout amount, grant rationale, as well as a link to a full writeup on the grants. These are impactful, well researched, one-off donations to effective interventions. To me, these are really well-framed opportunities of interventions that are intended to achieve a particular outcome. Can we present similarly outcome-framed HIGOs to HNWDs (rather than relying on these opportunities being funded by GWWC/GiveWell pooled donors)?

For example, GiveWell currently reports the room for more funding for their top charities. But these charities may have opportunities for further funding in the form of a promising one-off grant that perhaps would allow them to test a new intervention. Or even simply reframing the “room for more funding” for a particular organisation as a HIGO, such as “close the funding gap for the Against Malaria Foundation'' or even “prevent 10,800 deaths from Malaria for $37.8 million” (GiveWell currently estimate that AMF could use an additional $37.8 million by early 2022 to support LLIN distributions in 2023). My figure of 10,800 may not be accurate of course - I just did 37,800,000 / 3,500, but hopefully it’s illustrative of my point. The goal would be to frame it as an outcome which could be taken up by a specific HNWD.

Many single HNWDs donate sums much larger than $37.8m to organisations such as universities (it’s worth noting for universities in particular that there are a number of reasons HNWDs might donate, such the universities having established credibility, ambitious projects to fund, and specifically reaching out to alumni and asking for money for specific projects - such as a building with your name on it). It is therefore within the power of a single HNWD to close a funding gap for a very effective charity. It also suggests that HNWDs tend to donate as a one-off gift to achieve something tangible (as opposed to monthly donations to a cause, which seems to differentiate them from regular donors). Reframing problems such as funding gaps as an outcome that can be achieved by one (or a small number of) HNWDs may have potential to direct some money to effective cause areas.

I’m going to think even bigger picture for a second. I'm going to broaden the idea of a HIGO to include “closing the extreme poverty funding gap” (this actually isn’t dissimilar to a project supported by the Audacious project currently - What if we could lift millions of the world’s poorest people out of ultra-poverty?). In The Life You Can Save: 10th Anniversary edition Peter Singer estimates in Chapter 9 that $130billion per year should be sufficient to raise almost everyone out of extreme poverty. Some billionaires have more than $130billion. It may be a little much to ask one specific person to close this gap (and even then, even Jeff Bezos could probably only close it for a year), but maybe a pooled selection of HNWDs could close it for good. Again, what a legacy for the HNWDs! This may be very optimistic, but to me it does not seem out of the realm of possibility.

Elon Musk

This idea was inspired by a tweet from Elon Musk on Jan 8 2021 - “Btw, critical feedback is always super appreciated, as well as ways to donate money that really make a difference (way harder than it seems)”. This was shortly after he became the richest person on the planet. 

He also tweeted on Oct 12, 2018 - “About half my money is intended to help problems on Earth & half to help establish a self-sustaining city on Mars to ensure continuation of life (of all species) in case Earth gets hit by a meteor like the dinosaurs or WW3 happens & we destroy ourselves”. This suggests that half of the richest man in the world's wealth is intended to be donated to high impact philanthropic causes (on Earth).

My point here by specifically singling out Elon is to point out that there seems to be a “gap in the market” for catering to framing well researched HIGOs as particular outcomes (to “help problems on Earth”) for HNWDs, because they are in a unique position to wholly fund grant opportunities at the margin.  Elon is someone who basically wants to save the world and isn’t going to be able to do it all on his own (and presumably he is not the only super-rich person who wants to do good and would be open to well-researched opportunities) - can we cater to people like Elon by presenting outcome-based HIGOs for EA-aligned orgs?

(Again, I realize I may be ignorant of how charities market themselves to HNWDs in private conversations, and that “outcome-based” approaches may be common — if so, I’d be happy to hear examples of this happening.)

What prevents wealthy people from giving away their money?

The Barriers To Giving report published in 2019 (by Barclays Private Bank in partnership with The Beacon Collaborative and the Institute of Fundraising) suggests that a ‘lack of faith’ between wealthy individuals (ÂŁ5m or more) and charities is a key obstacle to giving (at least outside the US - the report found that wealthy individuals in the US gave a larger proportion to charitable causes than other wealthy countries). 

The research identified an underlying sense of ‘us and them’ between the wealthy and charities, driven by a lack of understanding and poor communication. A quarter of wealthy individuals stated a lack of faith in how charities are run and a lack of control over how money is used as major reasons that prevent them from donating more to charity. Scandals involving reputable charities have furthered this lack of trust and the assumption that such issues are widespread within the sector. Charities’ current methods of engaging with HNWDs were also identified in the report as barriers to major giving - the assumptions that the wealthy often demand ‘too much control’ over their donations and that they can ‘always give more’ are cited as contributing factors to the problematic ‘us and them’ mentality.

The report also has other key findings:

I believe outcome-focused HIGOs may alleviate some of these barriers to giving (in particular it should overcome the barriers of “lack of control over how money is used”, which 25% cited as a barrier to giving and the belief that “extra donations wouldn’t be enough to have a significant impact” which 42% cited). Especially if HIGOs from EA-aligned orgs leveraged pre-existing “donor marketplaces” such as Lever for Change or The TED Audacious program (and others mentioned above), who already have a HNWD audience. Global development in particular seems a good place for EAs to focus on for HNWDs, as it will be easier to predict and explain what a gift will achieve. 

It’s probably worth pointing out here the potential limitations of this idea - it’s much easier to pitch the funding of a university building to a HNWD as the costs are relatively easy to predict, as opposed to a global development problem as you can rarely tell people they will certainly achieve a given outcome in this space. This will likely require some specific mitigations, such as a charity with several programs creating an “outcome frame” with the most predictable output (this is not dissimilar to how GiveWell’s cost effectiveness estimates work - the figures they publish shouldn’t be taken as literally true for several reasons, but are rather used as a guide).

Bill Gates

In The Life You Can Save: 10th Anniversary edition Peter Singer writes:

Bill Gates says that he got started in philanthropy when he read that half a million children died every year from rotavirus. He had never heard of rotavirus. (It is the most common cause of severe diarrhea in children.) He asked himself: “How could I never have heard of something that kills half a million children every year?” He then learned that in low income countries, millions of children die from diseases that have been eliminated, or virtually eliminated, in the United States. That shocked him, because he had assumed that if there were vaccines and treatments that could save lives, governments would be doing everything possible to get them to the people who need them. As Gates tells the story, he and Melinda, “couldn’t escape the brutal conclusion that—in our world today—some lives are seen as worth saving and others are not.” They said to themselves, “This can’t be true.” But they knew it was, and that led them to set up the foundation, to endow it with an initial gift of $28.8billion, and, since 2008, to devote themselves to making it as effective as possible.

I’m not sure how typical this story is of the wealthy being moved to philanthropy. Though it seems to be a story very familiar to a lot of EAs (I had certainly assumed that all the “low hanging fruit” in altruism had been picked, prior to discovering EA) and the anecdote suggests to me that HNWDs can also be convinced by EA arguments. 

It’s also noteworthy that The Gates Foundation has given nearly $18million to programs aimed at encouraging greater giving by HNWDs in the last five years.

What next?

These ideas are really exciting to me, though I’m not entirely sure what to do next.  

Request for more info

Does anyone know of examples of HIGOs being presented to donors in this way? Are there more examples of organisations that do this? 

Or is it fairly typical behaviour for charities to pitch HIGOs to HNWDs “behind closed doors”?

Request for feedback

What are some potential downsides to this idea that I haven’t considered? 

How might these ideas be implemented in practice (e.g. could a marketplace be set up that connects HIGOs and HNWDs)?

Request for ideas

What are some charitable goals that could be framed as achievable by a single donor? What’s a really impressive way to phrase what an EA-aligned organization could pull off with a million dollars, or ten million, or more?

Many thanks to Aaron Gertler for feedback on drafts of this post.