Problems with free services for EA projects

By Lizka @ 2023-08-03T15:28 (+134)

EA-motivated specialists sometimes offer free or subsidized versions of normally expensive services to EA projects. I think this is often counterproductive and outline my reasoning in this post. 

The key problem with free services is that we don’t have market-based information about their quality, so the beneficiaries of a free service might be getting less value than it might appear they are getting. As a result, service providers waste their time providing expensive services to people who wouldn’t pay the full price (instead, providers could charge and donate^[1] or spend that time on other impactful work). Additionally, community-level overestimates of the quality of free services are more likely and might lead people who need good services to use the free versions even when they’re worse suited to their needs. 

If you’re offering, taking, or advertising a free service like this, I think you should believe the situation is an exception to the general heuristic. (More on these problems and other issues, as well as exceptions and nuances.) 

Some services make sense as free services. For instance (see more):

• Community infrastructure projects or other work where the benefits go through many people (there’s not a clear “beneficiary” of the service)
• Services for which overhead costs are especially high
• Services that are in large part beneficial to the provider, not the recipients of the service

Notes & caveats: 

• Scope of the post
  • When I talk about “services,” I mean costly services that are often provided by specialists (coaching, consulting, etc.). I think more minor services are more often fine, and I’m definitely not talking about friendly support, like helping your officemate with an ughy task or having a call with someone you met at EAG who’s interested in getting into your field.
  • Certain types of volunteering don’t encounter the issues outlined here, particularly when the volunteer has the option to be paid a specified rate but opts out (so they know more about the “market value” of their free work).^[3]
  • The concerns I discuss are also less relevant for services provided by for-profit organizations/groups that provide a free/subsidized version to e.g. nonprofits. 
  • I focus on free services here, but the arguments can probably be extended to cover subsidized services. 
  • I don’t discuss paid services that only serve EA customers, but I also have concerns about these services when it isn’t clear that the needs of EA projects covered are unusual.^[4] My rough take is that:
    • People advertising infrastructure and support projects in EA spaces (e.g. newsletters) should not give preference to services that only have EA customers unless there’s something clearly special about the service that makes it especially useful for EA work.
    • People working on EA projects should find the available service that best suits their needs, which is generally unlikely to be EA-focused; most of the world is not in EA. (Maybe it’s easier to identify a good-enough service in EA,^[5] but I still think we should be a bit more suspicious of our instinct towards going for EA things.)
• I’m not speaking for my team or for CEA. 
• I don't know how important the issues I outline here are relative to other issues in EA, but this topic has come up several times, so I decided to write this post. 
• I don’t think people who provide free services are ill-meaning or anything like that. Also, I appreciate many people in the EA community for reasons that go beyond “I think they do impactful work.” I like to hang out with other people in the EA community for personal reasons. But if I’m thinking about doing something for EA reasons — because I think it’s an effective use of resources in order to help the world — I want to focus on supporting impactful projects.^[6] I don’t want to support people in EA just because I like them. This is a relevant part of the premise of the post. 

Problems

It’s harder to evaluate the quality/value of free services, so (1) providers might keep offering free services that are a bad use of their time, and (2) people might use services that are not what they need

If a service costs $100/hour and is getting customers, we know that these customers are willing to pay at least $100 for the value they get. If a service is free, however, people would use it as long as it’s better than ~nothing (maybe they’d only pay $10) — even if it’s not worth the time of the provider.

A service provider who wants to dedicate some time for effective altruism might be choosing between providing their service for free to people in EA or charging for it in the normal market and donating the proceeds (or spending this time working on something else entirely). If the recipients of a free version of the service are getting less value than the provider could earn and donate (e.g. they’d rather get $30 than an hour of this service, and the provider could earn and donate more than that in the same timeframe), then the provider is wasting their time on the free version.^[7]

Moreover, the service might get over-promoted in EA and people working on impactful projects might go for it instead of services that suit their needs better. 

As a result: 

1. The provider might waste their time
   1. Sketch of how this happens: 
      1. People who get some value from the free service keep using it, even if they wouldn’t pay the sticker price. And they’re thankful to the provider and avoid criticizing the service. 
      2. The provider doesn’t realize that the value people are getting from the service is less than the value of their time. Instead of working on something else or charging for the service and donating the proceeds, they keep providing the service for free.
      3. Also, they don’t get good feedback about the quality of their service and don’t notice important improvements.
   2. Example: 
      1. Asimov offers free high-end cakes to people who run EA events. The cakes are expensive and Asimov is very skilled — he usually gets $300 in profits per order. He has a steady trickle of happy EA customers. However, these customers aren’t actually getting $300 in value from the cakes — they’re just happy to get free cake for their events. (Also, some of Asimov’s vegan cakes are much better than others, but his customers aren’t telling him that since they’re not paying and don’t want to criticize.) Asimov really cares about improving the world and would donate the money or go work on something he has the skills for (like a cultured meat startup) if he got the signal that his work wasn’t as valuable as it seemed, but he’s not getting that signal, so he keeps offering free cakes for EA events.
   3. Related: sometimes people get really excited about EA and default to finding an “EA version” of the work they were doing before that happened. I think this is often (but not always — related^[8]) a mistake — see 1, 2. 
2. The service might get over-promoted and people in EA might use it instead of a service that fits their needs better
   1. Sketch of how this happens:
      1. The service is advertised in EA spaces, since it’s free for EAs.
      2. People who use the service feel extra grateful because the service is free. They also don’t criticize the service — it was a gift. 
      3. A praise/info cascade emerges: we hear mostly good things about the service, we hear that people have used the service, and we think we’re getting independent signals about the quality of the service — so we think it’s really good.
      4. People looking for this kind of service default to the free-for-EA-projects version. They might not really know what to expect, and if the service is overall not super useful, they might just conclude that this kind of thing doesn’t work very well. 
   2. Example: 
      1. Asimov offers free cakes for EA events. This is advertised on the EA Forum and elsewhere. Ursula is hosting an event for potential donors. She could look up reviews for the best cakes in the right location, but she’s heard of Asimov’s cakes (maybe she knows they were served at a recent conference) and defaults to asking him for cakes. But then the cakes are subpar, or there’s some chaos getting them in on time. They don’t add the value that she was hoping cakes would add to the event. She still sends Asimov a thank-you email and doesn’t tell anyone that there were issues; the cakes were free and she doesn’t have time for this kind of thing, anyway. She decides that caterers like this are probably not really worth it and doesn’t try serving cakes again at events like this.

It might be more effective to charge the full cost and donate the profits

We can try to estimate overhead costs of charging and donating and compare those costs to effectiveness decreases from offering services for free.^[9] 

• A generous (I think) estimate of overhead costs: Let’s say that you usually charge $100/hour for your service and would pay 15-45% in taxes and other overhead on this. Also, let’s assume that your alternative is charing in the normal market and donating proceeds to the EAIF,^[10] and that an additional 1-10% of your donation would go to overhead costs (e.g. grantmakers and others’ time). 
• Conservative estimates of effectiveness costs: Let’s say that recipients would actually pay between $30 and $100 for your service. You need to vet people who’d get your free service.^[11] Your system is probably somewhat worse than professional grantmakers’ (maybe between “as good as” and “five times worse”).

According to this rough Guesstimate (you can input your own values if you want), charging and donating proceeds probably produces around twice as much value as offering the service for free. If you assume that grantees would in fact pay your sticker price ($100), you still need to believe that grantmakers are only 1.2x to 1.9x as good as you are at choosing projects in order to conclude that providing the service for free is the better option. I think this is probably not the case for most free service providers to EAs, but it might in fact be true for something like EA Global travel support (attendees are vetted). So I think that many free services would be better as donations.

More minor/complicated issues with services that are offered for free

1. Worse movement-level tracking of the costs of different initiatives
   1. If Project A applies for funding to grantmaker Alpha, they’ll say something like “look, our work led to these outcomes, and our costs are X.” But if they’re getting a significant amount in support via free services, those might not be taken into account for evaluating the true cost of Project A.
2. EA partisanship and insularity
   1. I’m a bit worried about people forgetting that EA is for the world (not for EAs), so I’m concerned that initiatives that seem like they support EAs just because they’re into EA nurture something like “EA partisanship” (and insularity). 
3. Issues with the “service market” in EA
   1. Some potential service providers whose services would be really useful to projects in EA might not be able to offer them for free. If people are already using free services, newer projects won’t be able to compete even if they’d actually be better. 
   2. Additionally, people might underestimate the importance or demand for services, because no one is paying for them. Relatedly, you might not take your work as seriously if you do it for free. 
4. Power issues,^[12] grifting
   1. If you’re distributing free services in EA (especially when they’re very valuable), you have some power, like a grantmaker. You might not notice this as acutely as you should. (Related: Power dynamics between people in EA)

Situations in which it’s potentially reasonable to offer/advertise free services to EAs

Several of these can be true about the same service. Please note that I'm not arguing that if a service has one of the following qualities, I think that it should be free — only that the quality could be a reason for why offering it for free is more reasonable than would be the case otherwise.  

1. The service is a communal good — many people are getting a small amount of benefit
   1. People share research on the EA Forum for free, although it can take hours of work per post. Should we charge readers/Forum users? (Let’s ignore the fact that part of the “benefit” is going to the authors via name recognition, etc.) I think no, in part because there’s no specific recipient of the service — the benefits are diffused through many readers and via supporting the existence of a platform where others want to post (using the Forum in a productive way supports a virtuous cycle). 
   2. It’s hard to get lots of people to pay a little for the pretty small amount of value that work like this brings them, and I think it’s ok for these “services” to be free. 
   3. (I think it’s still quite important to develop things like cost-effectiveness estimates and evaluations of projects like this if they’re large enough, though. We’re working on updating/improving ours for the EA Forum right now.)
2. The costs of overhead+taxes outweigh the benefits of donating earnings to be distributed by grantmakers/other systems
   1. Maybe you’ve done the math on this for your service, in which case it might make sense to keep offering your service for free. (Although beware lack of feedback and accountability if you’re volunteering.)
   2. This is more likely if:
      1. Your service is pretty cheap, which probably makes overhead costs of charging bigger (as a percentage of the total cost). 
      2. It’s impossible or illegal to charge for your service (or you have some required amount of time you need to spend offering a free service).
      3. You find it much easier to offer your service to EAs.^[13]
3. The service makes its “customers” more impartially altruistic
   1. It can be hard to identify the “true beneficiaries” of services for altruists. The benefits of work in EA are ultimately going to the world (or they’re meant to be), not to EAs. So while we can talk about “services for EAs,” the reality is that we’re all hoping that people will use services that make them more effective and more impartially altruistic. Especially for the latter kind of non-value-neutral (“value-oriented”) “service” (e.g. introductory courses on EA, free EA books, texts that argue for the moral relevance of some species, or career advising which involves talking through values and seeing if they’re aligning with EA) we can actually think of them as services for others (shrimp, people who want to spread their moral theories, etc.) through the people ostensibly getting the service. Charging for these makes less sense.
4. The service provider evaluates applications (like a grantmaker does)
   1. 80,000 Hours, Probably Good, or Successif, etc. evaluate applications for advising (as far as I know); they’re not just providing the service to anyone who identifies as EA. (Those examples might also fall under 3.) 
   2. The average project supported by a service like this is probably more impactful. 
5. The cost-effectiveness of the service is evaluated (e.g. by funders) in order to keep it running
   1. If grantmakers don’t think a service is valuable enough, they probably won’t fund it. So I’m less worried about services that rely on grants (e.g. larger-scale projects).
   2. Related, if you get really good information on the value of the service (and other feedback) in some non-market way (e.g. you collect really rigorous feedback), you don’t face some of the issues outlined here. (Or: you also have non-EA customers who are still using your service, and you get good feedback/value baselines from them.)
6. The service is valuable in large part because it helps the provider of the service, as opposed to the people getting the free service
   1. Maybe you’re looking to upskill in a certain area and wouldn’t be able to get paid for this kind of work, but could find opportunities to do it for free.^[14] It could make sense for you to work for free as long as you’re tracking that this is the true motivation. 
   2. I’d still caution against traps like overestimating the direct benefit of the service (because people are still using it), and/or continuing to provide it when it stops being as valuable to you.

Other nuances and counterpoints

1. Decentralization^[15]
   1. Say you want to support efforts to build EA. You can charge for a service you provide and donate the proceeds to e.g. the EAIF, but then you’re giving up some of your resource-allocation power and adding it to a central pool. I think this is a reasonable concern. But I also think there are other solutions, like donating to smaller grantmakers (e.g. 1, 2) or participating in a donor lottery.
2. Beware of fake alternatives
   1. Maybe the alternative to someone providing an expensive service to impactful projects for free isn’t that the provider would donate proceeds to EAIF or elsewhere — they’d just keep earning money. In this case, it’s more likely that it’s useful for them to keep providing the free service. 
   2. Similarly, maybe people using mediocre or ill-fitting free services wouldn’t pay for a version that’s more suited to their needs — they just wouldn’t use a service at all. 
3. A kind and unselfish community
   1. It’s just nice to have a supportive community that does things for each other without expecting something in return. My take is that we should accomplish this via things that mostly aren’t free versions of expensive services — related discussion here. But there’s probably more nuance here. 
4. Valid concerns in theory, but don’t realize in practice?
   1. Maybe what I’m outlining here makes sense in theory but real examples of free services in EA don’t face these issues. I think this is plausible (I’m basing this post off a few second-hand experiences and some conversations, but I don’t go into specifics and haven’t tried to comprehensively list and analyze real examples). I’d guess that some of the issues I’m describing are real (hence the post). 

Thanks to Jonathan Michel and Lorenzo Buonanno for helpful comments and conversations! 

1. ^{^}

   It might be worth pointing out that a lot of projects and fields would benefit from donations right now. 

2. ^{^}

    Helping is good.

3. ^{^}

    You might be interested in “Volunteering isn't free” though. 

4. ^{^}

   It seems possible or likely that I’m missing something, though. 

5. ^{^}

   This post talks about how people go for Subway instead of local restaurants because they can assume that there’s a minimum quality level they’ll get from Subway. 

6. ^{^}

   and the careers of people who might do particularly impactful work (a key reason for internships)

7. ^{^}

   Note that it might help to straightforwardly ask people whether they'd prefer an hour of your service or a check for whatever amount you could donate. 

8. ^{^}

   In short: working in a field where you have amazing skills can often make sense, and it’s possible that the right “EA” opportunity will come along. And you have a lot of information about your fit and comparative advantage, etc.

9. ^{^}

   In case you prefer a janky visual representation: 

   

10. ^{^}

    if you’d donate somewhere else, that’s because you think that work is better, so this is conservative

11. ^{^}

    Not all “EA” things are good, so vetting would make the average project you support more impactful (probably). You could get people to submit thorough applications, but that costs time and might make it harder for you to get customers. You don't specialize in this and would probably need something relatively simple so I would guess that you’re probably at least somewhat worse at this than grantmakers are.

12. ^{^}

    Thanks to Jonathan Michel for this point. 

13. ^{^}

    Maybe you're energized after talking to EAs, so it's less costly for you; overhead is lower. (Although I'd tentatively recommend that some people read Purchase Fuzzies and Utilons Separately.)

14. ^{^}

    if you have the resources to work for free; you could alternatively apply for funding.

15. ^{^}

    Another point from Jonathan.