We think some donors will find that Effective Altruism Funds is the highest-impact donation option available to them for one or more of the following reasons:
1. Comparative advantage
To make an effective donation, individual donors must spend significant time answering all of the following questions:
- Which problem areas are most important?
- Which interventions are likely to make progress in solving those problems?
- Which charities executing those interventions are most effective?
- Which charities have a funding gap that is unlikely to be filled elsewhere?
Time spent answering these questions takes away time from activities that are likely to be comparatively advantaged for most individual donors, such as earning money to donate or improving their skills for the future.
However, answering these questions is the comparative advantage of our Fund managers. The Funds are managed by experts who spend a large proportion of their working time - sometimes even all of it - thinking about how to allocate money to achieve the most good.
These experts also have strong networks of contacts throughout key communities (effective altruism, global health, animal advocacy, etc.), which is highly valuable in identifying and evaluating new opportunities.
2. Due diligence
Many of the most promising opportunities for impact involve taking risks; a project with a high expected value might still end up having little to no impact, or even causing harm. The managers at each Fund, as well as operations staff at the Effective Ventures Foundation, make use of their knowledge and experience to assess projects and identify risks.
3. Coordinate funding for new opportunities
If a promising new organization needs a certain amount of funding to get off the ground, they may struggle to do so by attracting many small donations; it's unlikely that many individual donors will all conduct enough research to feel comfortable supporting an organization without a strong track record.
Our funds allow individual donors to pool their money together and have it allocated by experts who do have the necessary time and background to research and evaluate new organizations and projects.
4. Save charities' time
Providing information to donors often takes up large amounts of time for charities' senior management, especially at smaller organizations. While there are benefits to these interactions, they can easily become excessively costly. By communicating with charities on behalf of many donors, our funds can reduce these costs.
5. Support the spread of information
The funds don't just make grants: they also publish information about the individuals and organizations they've chosen to support, explaining the reasoning behind their grants. This information may prove useful to other individual donors or grantmaking organizations.