Thank you for hosting me here, and thank you
for organizing this conference.
As you already heard, I'm going to talk about
considerations for fundraising in effective
altruism, and after setting this title, I
realized that there might be a confusion.
So this is about fundraising for effective
altruist charities.
It's not directly applicable to fundraising
for your own charity within effective altruism;
it's more geared towards "what are the considerations
that are useful to think about when you set
out to fundraise for effective charities out
there?"
So we should ask ourselves...
"What is fundraising in effective altruism
actually about?"
Usually these talks are supposed to start
with an endearing story, but since this is
an effective altruism conference, I thought,
why not start with a formula?
This is basically what fundraising in effective
altruism is about.
You want to maximize this sum formula.
What does it mean?
Basically, so you sum over all the donations,
so that's "d"; multiplied by some impact weight
that you apply to those donations because
you don't want to fundraise for any charities,
you want to fundraise for the effective ones,
right?
When you do that, basically in sales or fundraising,
you have two broad types of doing that.
I've termed one of them the broad approach
and the other one, the focused approach.
What does a broad approach do?
It tries to reach as many people as possible.
There's less personal engagement, right?
Because when you reach a lot of people, you
don't have time to talk to all of them.
You focus less on retention, more on just
getting more and more people in.
You have to use simple messages because people
don't have... you don't have a lot of time
to engage with them.
Use more emotional appeals because that tends
to work quicker.
You advocate for mainstream causes.
And you focus more on persuasion and on specific
charities because those are, again, simpler
messages.
And that's contrasted with the focused approach,
where you basically have the inverse, right?
So you tend to focus on fewer people, but
that means you have more time for personal
engagement.
You can use more complex messaging.
You have to rely less on emotional appeals.
You can advocate for more advanced causes,
and so on.
You should think of these as types.
These things tend to correlate with each other.
Not necessarily, but when you think about
crafting a certain message, these things tend
to go together.
This is also found not just in fundraising,
but in general sales.
So, this is form Peter Thiel's book "Zero
to One" that I'm reading right now, and this
is a graph that I took from there, where basically
on the left you have this broad approach that's
been found in viral marketing.
Think of Buzzfeed.
And on the far right, you have what's called
"complex sales", where that's SpaceX trying
to get a billion dollar contract with the
government.
They don't use emotional appeals.
They use fairly complex messaging in trying
to get the point across that the government
should invest in them.
Classic fundraising advice tends to favor
the broad approach.
Why is that?
Because of the following insights ... the
first one is, most donors do not give based
on effectiveness considerations.
This is taken from a study by Hope Consult,
2010 version, where they looked at the behavior
of donors.
And you see, if you start with the total population
of donors... if you whittle it down by all
these criteria, you end up with three percent
that give based on relative performance.
That's pretty depressing, because that's kind
of like the effective altruism reasoning,
that you want to try to compare charities
and have donors give to the most effective
ones.
So a message that focuses on relative performance
is only going to reach three percent of the
population of donors.
Secondly, and probably related to that: most
donors do not want or use a lot of information.
Most of them don't even look for it.
If they do, they spent very little time on
it, less than two hours, and they use or want
to see simple facts and figures most of the
time.
So that's things like overhead ratios.
What tends to get effective altruists quite
mad if people actually want to see those numbers.
And what's not on this slide, is that when
people do look for information, it's often
to confirm where they already want to give.
So they just want to look up whether there's
a scam related to a charity they want to give
to, or whether the money is used wisely, in
the sense of on the programs that they want
to see in the world.
Third reason, also we're all very familiar
with that: most donors have biases.
This is one example, the "Identifiable Victim
Effect."
So if you show people one individual, they're
far more likely to give, and tend to give
more than if you show them the statistic,
which effective altruists tend to be very
keen about.
So all these things tends to favor that you
focus on a broad range of people, and just
use fairly simple messaging, like easy facts
and figures and emotions, to try to raise
as much money as you can.
But, as with everything in life, there are
trade-offs everywhere, including with this
broad approach naturally.
To see where the trade-offs lie, we have to
look at this formula again, which is this
one, and the trade-offs are with the second
parameter, so the impact weight that you want
to apply.
And there is a very common mistake in effective
altruism that I've found at least, which tends
to assume that the impact distribution among
EA charities, or so-called EA charities, is
uniform.
What does that mean?
That there's basically a binary difference
between charities that are effective on the
one hand and charities that are ineffective
on the other hand.
Kind of looks like this.
I drew this, so it looks very sketchy, and
yeah, I'm not a great artist.
This is what impact differences don't look
like.
What do they look like then?
Well, looks more like this.
Again, not a beautiful drawing, but I think
you get the message.
I think this idea of a binary difference is
created once you do something like this, where
you recommend certain charities and not others.
And this creates this idea of there are some
charities which are good, and some charities
which are not good, or ineffective.
But the problem is that these recommendations,
or where you draw the line, is basically fairly
arbitrary, right?
Because on the other side of that line, just
below it, there is a charity that's deemed
ineffective, but it's just marginally less
effective than one that's being recommended.
And I would argue that if you look to the
right of that line, you still see that gradient.
So there's still, within effective altruism,
obviously, more and less effective charities.
But I've found that that sometimes is forgotten.
And I would even argue that the impact differences
that we see are quite big, or can be quite
big.
Why do I think that?
Basically, because of this table.
This is from the talent survey that 80,000
Hours did last year.
And there they asked a number of 22 employees
at effective altruism organizations about
the relative cost-effectiveness of the Effective
Altruism Funds.
And there are four of them, and you see them
on the right hand side: the community fund,
the long-term future fund, the animal welfare
fund, and the global development fund.
And let's look at the median here.
That's 100, 10, and 5.
So that would imply that between the least
cost-effective funds and the most cost-effective
funds, there is an impact difference of 20x.
So one dollar to the community fund, for example,
has twenty times the impact of that to the
global development fund.
And that's even more extreme if you look at
the tenth percentile.
There, the impact difference would be 1,000x.
That's very, very large, and we should probably
take that into account when we fundraise.
Now the second interesting thing, and which
makes this a trade-off, because otherwise
you could just do the broad appeal, for the
EA fund, the long-term future fund, and so
no.
You could just focus on those with your fundraising.
But the problem is the following: I would
argue that mainstream appeal and intelligibility
decrease as marginal effectiveness increases.
What does that mean?
Basically, the more effective a charity tends
to be, the less mainstream appeal and intelligibility
it has.
So it looks kind of like this, with the red
line being mainstream appeal and intelligibility.
Why would this hold?
So I think there is a market efficiency argument
for this.
Basically, given a world where most donors
care about emotional appeal and want to understand
where they give and so on, and don't invest
a lot of time into understanding charities...
basically, at some point, even if there was
a charity that was highly effective, but also
had high mainstream appeal, and was really
easy to understand, it would very quickly
cease to be the most effective one on the
margin.
Why?
Because all the donors would give there.
What an easy example to understand this?
If at one point, saving kittens was the most
effective thing that we could all do, probably
it would not be at this point anymore because
everybody else had moved into that space and
given to all the saving kitten charities out
there, and the marginal effectiveness would
have decreased to a point where it's not the
most effective thing anymore.
So you would expect the most effective things
to be quite neglected, and that implies that
often, they have low intelligibility, so it's
hard to understand why they have such a large
impact.
And they don't have a lot of mainstream appeal,
so they tend to be quite weird.
As effective altruists, we should be pretty
stoked if we actually care about weird things
and things which are out there, because that
means we might be on the right track.
It doesn't follow naturally because it does
not follow that unintelligible things which
don't have a lot of mainstream appeal are
effective, but it seems to be that there is
some relationship with that to effectiveness.
Put in other words, if my grandma starts to
donate to MIRI, we should probably move on
because at that point, MIRI ceases to be the
most effective charity out there, if they
are at this point.
And now the question is: do this relationship
hold not just for charities in general, but
also for charities within effective altruism?
Because that's what we care about.
Which charities should we fundraise for?
So we have to zoom in to that part.
I would argue, yes.
We see the same relationship there, and I
think that becomes apparent if you look at
the funds that we saw on the table from 80,000
Hours earlier.
You have global poverty, which arguably has
the most mainstream appeal.
It's easy to understand where that helps people.
But if you looked at the table again, that
was the least effective of the funds.
And then, arguably, animal welfare tends to
be a bit harder to understand why we should
do that, has a bit less mainstream appeal,
but is more effective than global poverty
reduction.
And then if you move on to long-term future,
EA community building... arguably the most
effective but with the least mainstream appeal.
In that sense, I think this relationship,
broadly speaking, also holds within effective
altruism, or between effective altruism charities.
With Raising for Effective Giving, we also
basically find this relationship between charities.
So, most people who don't engage with us personally,
just look at the website, and just want to
quickly find out where they want to donate,
they tend to gravitate towards global poverty,
and to a lesser extent, animal welfare, and
to the least extent, to long-term future charities
because those don't have a lot of appeal,
although they might be more effective than
the other ones.
To explore this relationship a bit more, we
can kind of integrate this into one curve.
On the x-axis, you have impact of charities,
and on the y-axis, you have message effectiveness.
As impact increases, message effectiveness
goes down, at least for the broad approach
that I sketched.
Then it becomes clear that the shape of the
curve matters.
Your message matters to the extent that you
can fundraise effectively.
Why?
If you look at this graph, the point here
is basically your optimal thing to fundraise
for, because it maximizes impact at the same
time as it maximizes appeal.
This would be very good, right?
The curve still decreases, so as impact goes
up, appeal still drops, but it doesn't drop
so much that it becomes harmful.
But if you have this shape, it decreases,
and the area below the graph that I've filled
with colors here, is the impact-adjusted kind
of donations that you would have.
So compare these two.
This would still be pretty good, if it decreased
like this, but this curve... that will be
pretty bad.
Because then, you can have... very restricted
in how much impact-adjusted money you can
move.
I tend to think that with this broad messaging...
kind of get a curve like this within effective
altruism.
What does that mean?
It's the case that, I think, emotional appeal
drops off quite quickly after global poverty
interventions, but impact only starts to pick
up at a later point.
And that means that you're quite restricted
in the amount of impact-adjusted money that
you can move, if you use this broad messaging
and focus on global poverty interventions.
Which is still, given this approach, the best
thing you could do, but in the greater scheme
of things, it does not move a lot of money
into the right directions.
You could argue that the same relationship
holds also within different causes.
For example, if you look at animal welfare.
Here you would also expect that mainstream
appeal and intelligibility drop off as effectiveness
increases.
So here it might also be better for effective
altruists to fund weird things within the
animal welfare sphere, as apposed to easier
ones like Vegan Outreach or even the Good
Food Institute, which even meat-eaters might
fund to some extent.
And if this is the broad approach, arguably,
given the assumptions that I made in this
talk, then what is the ideal shape of this
green curve look like if we want to maximize
impact-adjusted donations?
Probably looks something like this, where
you have an upward slope that peaks at the
top right.
So, you can maximize impact on the x-axis
and still have a very effective message to
advocate for this impact.
And then the question becomes: what does this
approach look like?
The green curve is basically the kind of message
that gets you this relationship.
And I would argue that a necessary condition
for this kind of upward curve, where message
effectiveness increases with increasing impact,
is basically if you focus on just that: impact
reasoning.
If you convince people based on the impact
that they can have... only then can you actually
reliably have this upward-sloping curve, which
gets you into this nice top right area.
Here it's important that you want to get this
relationship reliably.
You could argue that you could get some weird
shapes, where you have a bump to the top right
because you used some kind of emotional messaging
or mainstream messaging to focus on just that
right part.
But I think that reliability in this upward
curve is really important because recommendations
may change as we learn new things.
Room for more funding is constantly in flux.
Charities, or new charities, might crop up.
So it's really important that basically the
message that we have reliably gets you into
that top right corner, where you can actually
maximize the impact-adjusted donations that
you move.
Another way of putting it is... is that flexible
funding is may more important than inflexible
funding.
What do I mean by that?
Flexible funding is such funding that kind
of chases to the right of the graph, which
consistently wants to try to maximize impact,
and is willing to change based on these things.
Whereas inflexible funding tends to stick
to one particular thing, even given new information.
With this distinction, flexible funding is
something like the Open Philanthropy Project,
which is willing to change its priorities
based on new information.
Or someone doing earning to give, who constantly
wants to chase the most effective giving opportunity.
Or the effective altruism funds who efficiently
allocate capital where it's most needed.
Inflexible funding, on the other hand, is
donors who are committed to one particular
cause area or one particular organization.
So somebody who learns about effective altruism
on the internet, finds GiveWell, and commits
a recurring donation to AMF.
That's funding which is fairly inflexible,
because even if new information comes up,
they're not going to learn about it, so they're
not going to adjust where they give.
And in that sense, flexible funding, it's
much more important because it will reliably
get you to the impact side of things.
But obviously, with this kind of focused approach,
where you try to get to the right, or top
right, you also have trade-offs because they're
everywhere.
It could be that this is not actually the
ideal shape because in reality, this focused
approach looks more like this, where the message
effect also depends on how much money you
can raise with that message.
The problem with the focused approach is that
you just reach fewer people.
That's what we discussed in the beginning
basically.
So then, it could be that it already stops
at this earlier point.
It does not actually go right to the top.
And then we have to ask ourselves: how big
of a problem is it really that you focus on
a fewer set of people?
So, how bad is it that you only reach 3% of
individuals, with this particular fundraising
method?
I would argue that it's not so bad.
Why?
This is basically a toy example of why it's
not so bad.
The 20x is the impact difference, given the
median of the sample that 80,000 Hours looked
at.
So it's 20 times as effective.
Let's say that only 5% of people care about
impact; that's rounding up from the 3%.
And then you have 1x from the Global Poverty
Fund, and 95% of people who care about mainstream
appeal or don't care about effectiveness.
And still, the 20x is a bit higher than the
other one.
3% would basically be on par, but still, it's
not so bad that only so few people care about
effectiveness, given that the differences
between the different charities, even within
effective altruism, is so big.
I think that's likely a conservative estimate.
Why?
Because you can actually target these 5% of
people that you focus on.
You don't have to take a random sample of
donors, and that makes all the difference.
Why?
Wealth is not uniformly distributed.
With a targeted approach, you can focus on
the far right of this distribution, and get
the people who have vastly more capital than
other people to actually contribute to these
things, and therefore, compensate to some
extent, for the fact that you can reach fewer
people.
This is also what we find with donations.
This is data from the Effective Altruism Foundation,
where I work.
Again, you see power law distribution, where
a small minority of donors is responsible
for the vast majority of money that we move.
So, with Raising for Effective Giving last
year, roughly 11 people were responsible for
roughly 85% of the total amount of money that
we moved, where these individuals make all
the difference.
In addition to that, this group of people,
who has a lot of capital and wants to donate
a large part of that, they seem to be particularly
impact-driven.
So, also this mindset is not uniformly distributed
among donors.
These are like Bill Gates, Dustin Moskovitz,
Jaan Tallinn, Peter Thiel, Elon Musk, and
Warren Buffet, who all seem to be driven by
this mindset of wanting to maximize the amount
of good they can do.
There's also some evidence of this in the
literature, that high net worth individuals
tend to focus more on the impact of their
donation than other people.
I think the more likely scenario is something
like this, where you convince 10 people to
give one million and you have the 20x multiplier,
because you focus on the right charities;
whereas on the right hand side, you convince
10,000 people to give 100 dollars to less
effective charities.
And that makes a difference of 200x, roughly,
in terms of the impact that you can have.
So I think that this targeting basically changes
this equation by a lot, and for maybe parity,
to this being a lot more effective in terms
of a fundraising approach.
So, what to do?
Subject to the assumptions made in this talk,
so about the relationship between mainstream
appeal and impact, how big you think the difference
is between different charities, I would argue
that a focused approach makes a lot more sense
than broad approach, if you really want to
maximize the impact of the donations that
you fundraise or of your efforts basically.
What does that look like?
I think the following things make sense.
The first and most important thing is, you
should have a model of impact differences
within effective altruist charities.
If you think that one of the best things you
can do is fundraise for charities, this is
kind of like the necessary condition, if you
actually want to make sure that you maximize
the impact that your efforts will have.
Secondly, you should focus on the right target
audience, and I think given the reasoning
that are presented here, you'd focus on people
who have wealth to give to effective charities,
and who care about maximizing the impact of
those charities, and who really want to go
into the weeds and chase the curve to the
top right, which I think makes sense.
Then, I think thirdly, you should try to convince,
not persuade.
So you should give the right reasons for giving
to the right charities, and not try to take
shortcuts and be dishonest in the kind of
reasons that people should have for supporting
even weird causes.
Because the temptation is sometimes big when
you're a fundraiser and you only have 20 minutes
with somebody, to basically present false
reasons for doing the right thing because
you think you will get there quickly.
But I think there is a strong reason, if you
play the long game, to convince instead of
persuade, because that builds trust and mutual
connection in the long term.
Fourthly, you should gain expertise in the
relevant area.
I think that's basically effective altruism.
So you don't need to become an expert in global
poverty or animal welfare, but I think in
the kind of considerations that are important
for chasing the impact.
So what considerations lead you to this model
of impact differences, and be able to explain
this to the people that you want to convince.
And lastly, I think it's important to pursue
a long-term strategy, because these things
don't happen overnight.
People don't part, for good reasons, with
a lot of money in the short term.
So I think building long-term connections
is really important as well.
There is an argument here maybe, given discounts
and AI timelines, that it's not worth it,
but I think those are probably far off enough
to justify this strategy, for now at least.
If I had to put it pithily, it's basically
this: find individuals who want to build the
next Open Philanthropy Project and help them
do it.
Open Phil will basically have a large share
of the impact within effective altruism, because
they can just allocate so much money.
This is also illustrated by this graph: money
moved to recommended charities by GiveWell.
Good Ventures basically overtook all the other
donors in 2015 and continues to do so.
I think the numbers came out yesterday for
2017, but I'd be surprised if the graphs looked
a lot different.
So here again, this focused approach on a
few individuals paid off for GiveWell.
Now, you could argue that, well, in the beginning
they had this broad approach, which only led
to Good Ventures wanting to do Open Phil with
them.
But I would argue that there's probably ways
of getting there without having GiveWell beforehand.
Maybe this was not possible 5 to 10 years
ago, but I think it's possible now.
This was a bit too fast.
And I think it's really encouraging that more
and more groups are basically trying to do
that.
More and more groups are trying to focus on
individuals who might be able to do that.
More and more groups, for example, in the
Netherlands, Kelly already gave her talk with
Effective Giving... they're now doing similar
things in the U.K. There's Zest Impact in
Brazil, Founder's Pledge, we at Raising for
Effective Giving, obviously.
So I think these are really encouraging signs
that we take these kinds of considerations
into account.
And I think fundamentally, it's important
that you can align your messaging or distribution
with your product, because this is also what
will hold us accountable in the long term.
Because if we cannot convince other people
of our ideas, maybe we're just wrong?
I think focusing on honest fundraising for
the most effective things basically ensures
that we actually have to convince people and
give the right reasons and not the wrong ones.
And that's also I think the fundamental reason
why this focused approach ultimately makes
sense.
Thank you.
