EA Funds organisational update: Open Philanthropy matching and distancing

By calebp @ 2023-08-02T01:28 (+125)

We want to communicate some changes that are happening at EA Funds, particularly on the EA Infrastructure Fund and the Long-Term Future Fund.

In summary:

Our relationship with Open Philanthropy

EA Funds started in 2017 and was largely developed during CEA’s time at Y Combinator. It spun out of CEA in 2020, though both CEA and EA Funds are part of the Effective Ventures Foundation. Last year, EA Funds moved over $35M towards high-impact projects through the Animal Welfare Fund (AWF), EA Infrastructure Fund (EAIF), Global Health and Development Fund (GHDF), and Long-Term Future Fund (LTFF).

Over the last two years, the EAIF and LTFF used some overlapping resources with Open Philanthropy in the following ways:

That said, I think it is worth noting that:

Since the shutdown of the FTX Future Fund, Open Phil and I have both felt more excited about building a grantmaking organisation that is legibly independent from Open Phil. Earlier this year, Open Phil staff reached out to me proposing some steps to make this happen, and have worked with me closely on the changes listed below.

We think this could help to:

Over the next few months, we and Open Philanthropy are making the following changes to make EA Funds a more legibly independent funder.

Overall, I believe the upcoming changes will be beneficial, but there are some drawbacks. In particular:

Comments from Open Philanthropy on the planned changes

This section was written by Claire Zabel

Our goal is to help the EAIF and LTFF become less dependent on Open Phil’s perspective on them or evaluation of them, while also giving them time to seek out and build relationships with other supporters while continuing to fund strong applicants.

That means the purpose of these matching funds is to amplify the impact of non-Open Phil people who evaluate the LTFF and/or EAIF and believe them to be good donation opportunities. The matching funds, thus, should not necessarily be interpreted as a strong endorsement of the Funds, especially going forwards, though they are premised on our past experience with the Funds suggesting that they have reasonable processes and historically supported projects we often thought seemed valuable but didn’t encounter ourselves.

We are trying to strike the right balance between encouraging different grantmaking projects in the spaces we work in to guard against our own potential blindspots, and conserving our support for the projects that seem best to us.

Counterfactually, the funding supporting this match would likely be used for other grantmaking projects at Open Phil in our longtermism grantmaking portfolio.

Current Funding Gaps

The EAIF and LTFF have received generous donations from many individuals in the EA community. However, donations to the EAIF and LTFF have been in decline over the last year. We think that some of this is due to crypto and tech stocks doing less well than the previous year (though we hope that recent market trends will bring back some donors).[6]

LTFF funding gap

EAIF funding gap

Fund Expected shortfall (6mo) Additional donations (6mo)
LTFF $3.84M $1.27M
EAIF $3.6M $1.2M

Appendix: Open Philanthropy donation matching

Open Philanthropy is planning to match public donations at a 2:1 rate, meaning that they will give $2 for every $1 fundraised for the EAIF and LTFF (contributing up to $3.5M per fund) for six months, starting from the publication of this post. This is subject to several conditions being met, indicating that the relevant funds are operating broadly similarly to how they have been doing in the past; we expect these to be met and will flag if things change such that additional funding might no longer be matched

Open Phil won’t match funds from other funders who contribute >$5M in aggregate to the two funds per year, or seem to contribute >$20M/yr to the greater EA/LT/x-risk reduction space.[9] The LTFF and EAIF can do things that don’t meet the conditions above, they just will not be subject to the default 2:1 match.

Open Philanthropy is not committing to matching funds on longer timescales at this time, though it may do so, plausibly at a lower match rate, given that in the future, we will have had more time to build relationships with other funders.

  1. Note that EA Funds staff who were also Open Phil employees did their Funds work on a volunteer basis. ↩︎

  2. Which I believe will be beneficial for both Open Philanthropy and the epistemics of EA and Longtermist communities. ↩︎

  3. Though this should not be taken as a strong commitment at this time. ↩︎

  4. Which is also the case for many other projects after the FTX Future Fund shut down. ↩︎

  5. My understanding is that Open Philanthropy and other grantmakers have also had difficulties hiring excellent fund managers. Some of the reasons that we (EA Funds) have found this hard include:

    • Limited opportunities for hands-on experience: EA cause areas provide limited opportunities for individuals to gain experience in grantmaking.
    • Insufficient management capacity: EA Funds lacks sufficient management capacity from experienced grantmakers, leading to potential operational inefficiencies.
    • High opportunity cost for potential grantmakers: Many prospective grantmakers have many alternative options for their time and could contribute to other valuable projects instead.
    • Perceived career limitation due to EA affiliation: The strong association with EA might discourage some potential candidates, as they worry it could limit their future career opportunities.
    ↩︎

  6. I have also invested relatively little time in stewarding donors - instead, prioritising increasing the number of promising applications and improving our grantmaking. ↩︎

  7. In the sense that we are confident we can distribute this amount of funding to projects we deem to be above the current funding bar. ↩︎

  8. In the sense that we are confident we can distribute this amount of funding to projects we deem to be above the current funding bar. ↩︎

  9. From Claire Zabel - “We think this would run the risk of making Funds more dependent on current major donors, which goes against our intent.”. ↩︎

Nathan Young @ 2023-08-02T08:32 (+29)

I don't know if this will work, but I'm pretty interested in making the funding ecosystem less unipolar. Thanks for taking a big risk here and doing a weird, but to my mind, good thing. 

JJ Hepburn @ 2023-08-03T15:31 (+27)

I have pretty mixed feelings about this. I greatly appreciate and respect the constrains you are operating under and the hard, often thankless work of those involved.

I have a lot of thoughts about this update and the funds in general based on my direct experience as an applicant, from being involved with a number of projects and applications and from what I have heard from others. 

I might find the courage to say more about this publicly at some point but I did want to say that my experience with EA Funds, is a significant part of my decision to shut down AI Safety Support.

calebp @ 2023-08-03T16:07 (+5)

I'm sorry you had a negative experience as an applicant. If you would like to share feedback on the LTFF feel free to message me on the forum (I've also reached out over email).

Zach Stein-Perlman @ 2023-08-02T05:49 (+17)

Thanks for this update.

Open Philanthropy . . . has covered our entire operations budget.

Where will funding for operations come from now? (And how much does EA Funds spend on operations?)

calebp @ 2023-08-04T06:58 (+4)

I’m not sure right now, we might fundraise for this separately, charge the individual funds or ask a small set of private donors. I think our operations costs come out to around ~$700k/year (but a large fraction of that are variable costs so if we are moving less money we’ll also end up having lower overheads).

Jason @ 2023-08-05T11:46 (+2)

Does the figure for operations costs include EA Funds' share of general EVF operations overhead (e.g., HR, legal)?

Linch @ 2023-08-06T13:04 (+6)

EA Funds pays EV for ops support, otherwise it'd be a lot cheaper (Just Caleb's salary + occasional contractors).

Vincent van der Holst @ 2023-08-04T15:23 (+1)

So you estimate 2.4M in donations this year and 700K operations? How was that ratio last year? And how much do you expect to decrease operations if donations remain low/decline? 

Linch @ 2023-08-06T14:51 (+6)

LTFF made ~10M in grants last year (I think similar figures for EAIF). The 700k figure is from last year rather than a projection going forwards. So <4% operational overhead. 

Also, to be clear, most of the operational costs are on the grantmaking side, not on the donation side. It will be extremely inaccurate to model EA Funds as primarily doing donation forwarding. 

calebp @ 2023-08-05T03:38 (+3)

I'm not sure which number you are quoting here, but you can find the specific numbers here.

Some things to note
* our money granted is much higher than our money donations from the public figure as we received money from institutional donors like Open Phil.
* operations costs track grantmaking more than donations as ~ all of the variable costs are incurred through grantmaking so our operations costs should decrease naturally if we are doing less grantmaking

* operations costs are for all four EA Funds funds, not just eaif and ltff
 

Vincent van der Holst @ 2023-08-10T10:33 (+1)

Thanks! I'm multiplying the quoted numbers in the OP. 

Just to be clear, I'm not anti-overhead (often the opposite), and 4% is low. @calebp I wrongfully thought this was just EAIF, not all funds, so thank you for making me aware of my mistake. It's interesting to learn that most of the operational cost goes to the grant making side and I'm happy it's on that side. Thanks and good luck with the funds! 

Vasco Grilo @ 2023-08-12T21:03 (+11)

Thanks for the update, Caleb!

I have found hiring fund managers challenging in the past, and I expect replacing the current LTFF and EAIF chairs to be challenging.

Have you publicised grantmaking positions in the past? Having a public call might attract more candidates.

To which extent do you think some grantmaking tasks could be performed by someone with little/no grantmaking experience, but general knowledge about EA (e.g. like me)? It looks like, as of now, each grantmaker assesses one grant from end to end, but it might be the case that some tasks can be outsourced.

Linch @ 2023-12-21T20:40 (+7)

UPDATE 2023/12/21: Open Phil's $3.5M donation matching for the Long-Term Future Fund has now been filled[1]. So your donations to LTFF will no longer be matched. That said, this fundraising post was written 4 months ago, and we'd like to continue fundraising (especially given that December is an unusually good time to fundraise).

Open Phil's donation matching for the EA Infrastructure Fund has not been filled (currently $1.3M/$3.5), and my current projection is that by default they won't be filled by the deadline (end of Jan 2024). So to the extent that you're fairly indifferent between LTFF and EAIF, and believe that either fund is a better use of marginal resources than OP's marginal dollar, it might make more sense to donate to EAIF than LTFF.[2]

(I'm the main person in charge of public comms for EA Funds)

Brian Wang @ 2023-08-04T19:54 (+7)

How does this change affect the eligibility of near-term applicants to LTFF/EAIF (e.g., those who apply in the next 6 months) who have received OpenPhil funds in the past / may receive funds from OpenPhil in the future? Currently my understanding is that these applicants are ineligible for LTFF/EAIF by default – does this change if EA funds and Open Philanthropy are more independent?

porby @ 2023-08-02T20:22 (+6)

Thanks for the update! This kind of information is helpful for planning. I'd also love to see projections/simulations from different organizations about future funding. Such predictions would be prone to high variance error, but I bet the models would be better than mine.

At the moment, I'm leaning towards keeping my safety work on pretty low hours (which provides more benefit per hour than working full time in my experience so far) while pursuing opportunities for high throughput earning to give. I'm concerned/alarmed that there are a significant number of possible worlds where my individual earnings would swamp the current budget; that seems like a bad sign from an evidence-of-sufficient-coordination standpoint.

Jeroen Willems @ 2023-08-06T10:22 (+4)

I like seeing this. It's a great thing to try out and seems like a good idea overall, mostly to decrease the unipolarity of the funding ecosystem. Having no overlap in people who work for Open Phil and help out with EAIF/LTFF seems really important. Though I don't think there's any harm for Open Phil to continue matching donations after the six months, but it definitely doesn't have to be 2:1. 0.5:1 would already be great. I have low confidence in these opinions, just quick thoughts.

Daniel_Eth @ 2023-08-08T01:23 (+15)

Having no overlap in people who work for Open Phil and help out with EAIF/LTFF seems really important.

FWIW, this is not the current plan – the post mentions a desire to avoid having the same person chair a fund at EA Funds while at OPP, but not about someone being a fund manager at EA Funds while at OPP (though presumably this would only be a minority of fund managers).

Jeroen Willems @ 2023-08-06T10:23 (+7)

I would like to add that it might be important to communicate this in an email to all currently funded projects by EAIF/LTFF ;)

Grumpy Squid @ 2023-08-12T19:32 (+3)

the LTFF and EAIF chairs will step down from their current roles,

Wouldn't it make sense to find replacements before the chairs step down, to prevent a lack of capacity during the transition period ?

(Not sure if this is the plan, but it sounds like it is from your post)

Robert Van Buskirk @ 2023-08-02T03:16 (+1)

I would like to offer a suggestion for how to manage the potential funding gaps from the perspective of a grassroots volunteer organizer that might apply to the funds.

Good project organizers with uncertain funding often have several contingent versions of their project that they can implement at various funding levels.

The application process does this already to some extent, but the fund could more aggressively respond to a project with a "We like the project, we have funding gaps, can you send us a version of the project at 1/3 of the initially proposed funding level." From my perspective as an applicant, this would be a perfectly fine, positive response as an organizer.

Also as a small-scale EA-minded organizer, I am constantly trying to increase the "impact- productivity" of my projects (i.e. impact per donated dollar). This can be done by leveraging and cultivating non-cash resources (e.g. volunteer labor) or selectively cutting the least productive component costs of a project. If your interaction with applicants can help preserve the most productive pieces of the applicant projects during times of low funding, then by keeping more good projects in your funding pool (albeit at lower per-project funding), then the projects can increase their "impact productivity" over time.

The impact of the EA movement grows over time both through funding growth, and increasing the productivity and efficiency of the funds spent. IMHO, as much effort should be spent increasing the productivity of donated fund spending, as is spent marketing for increased donations. EA donors are a pretty limited pool. Many donations that might be received could counterfactually have been spent on other high priority EA causes.

Maybe I missed it, but I did not see in the post any mention of how funding productivity might be increased in response to some of the forecasted funding limitations.

calebp @ 2023-08-02T04:22 (+8)

Thanks for the suggestion. A decent fraction of applicants already outline different budgets for their projects, and we generally feel comfortable adjusting their budgets based on our willingness to pay. At the same time, we want to be mindful of not underfunding projects or leaving grantees with deals they would rather turn down but feel uncomfortable doing so due to grantmaker-grantee power imbalances.

"IMHO, as much effort should be spent increasing the productivity of donated fund spending as is spent marketing for increased donations."

I think this is a good point. I estimate that we spend something like 100x more time evaluating grants and prioritising between them (which I see as trying to increase the productivity of donated funds) than fundraising. I expect we should actually spend more time fundraising.

Robert Van Buskirk @ 2023-08-02T06:57 (+1)

Thank you for your response. I find this piece of the response interesting:

"we want to be mindful of not underfunding projects or leaving grantees with deals they would rather turn down but feel uncomfortable doing so due to grantmaker-grantee power imbalances."

As someone on the grantee side of the equation (though I don't apply to this particular fund), I would much prefer an under-funded response of 30% of initial budget request rather than a rejection which is effectively an offer of 0% of the request. But I have pretty thick skin.

I think what I am asking for is for as much communication and negotiation between the grantmaker and grantee as possible in adjusting the project offer to better match the resources request (demand) from the grantee to the resources supply available to the grantor. A better match and greater information exchange increases systemic supply/demand efficiency.

This also allows the grantee to design a better project ask the next time so that grant-giving productivity increases over time. 100% rejection can lead to disengagement. I think it is better for the EA movement if innovating project organizers who are proposing fundable projects can stay engaged.

Though I understand that grant evaluation time is a constraint, so there may not be resources for the extra grantor/grantee communication.

I also understand your point that fundraising is underprioritized. But given that donors may already be giving to other high-impact areas, this might be somewhat OK.