GiveWell is growing quickly, and we have been wrestling with the question of how we should be seeking to fund our expansion.
We are currently working closely with Good Ventures. Good Ventures is a major foundation, and it is interested enough in our work on strategic cause selection – for its own purposes in choosing causes – that it would potentially (if it were the only way this work could be done) be willing to commit significant funding to it.
At the same time, both we and Good Ventures agree that it would be a bad idea for GiveWell to draw all – or too great a proportion – of its support from Good Ventures.
One reason for this is that it would put GiveWell in an overly precarious position. While our interests are currently aligned, it is important to both parties that we would be able to go our separate ways in the case of a strong enough disagreement. If Good Ventures provided too high a proportion of support to GiveWell, the consequences of a split could become enormous for us, because we wouldn’t have a realistic way of dealing with losing Good Ventures’s support without significant disruption and downsizing. That would, in turn, put us in a position such that it would be very difficult to maintain our independence.
Another reason is that raising substantial support from individuals keeps us accountable to individuals, both in terms of perception and reality. If we did not raise a substantial part of our support from individuals, our incentives would not be aligned with our mission of serving large numbers of donors. We have hopes of serving many more individuals and institutions (such as Good Ventures) in the future; drawing too much of our budget from Good Ventures could make this more difficult by leading to a perception that serving Good Ventures is our main mission.
We’ve struggled with just what our policy on fundraising should be, given these realities. At this point, we’re leaning toward the following approach:
- We should retain a basic picture of “what GiveWell would look like if not for its relationship with Good Ventures” and a budget for such a hypothetical GiveWell.
- We should raise the vast majority (~80% or so) of the budget needed to maintain “the GiveWell that would exist if not for the relationship with Good Ventures” from donors other than Good Ventures.
- Thus, if our relationship with Good Ventures were to terminate, it would create only a moderate-sized/manageable gap, which we would hopefully be able to close (via fundraising) quickly enough to maintain operations at the desired “without Good Ventures” level.
- There will be expenses that we take on, in consultation with Good Ventures, that (a) Good Ventures is willing to fund and (b) don’t belong in the category of “expenses that it would be crucial for GiveWell to be able to maintain continuously in the event of a split with Good Ventures.” These expenses will be covered by specially earmarked grants by Good Ventures.
Separating “core GiveWell operations, which would be crucial to maintain continuously in the event of ending our relationship with Good Ventures” from other expenses will not necessarily be a fully straightforward endeavor. In general, we will seek to keep “core GiveWell operations” to a level that is reasonable in light of our money moved from sources other than Good Ventures (our definition of “reasonable” will be discussed in a future post). Subject to this, we will generally wish to keep generalist GiveWell staff in the “core GiveWell operations” category, since losing such staff would impose extremely high costs on GiveWell as an organization. By contrast, more temporary and specialized research expenses (such as contracting with consultants to advise on particular causes) will go in the other category, meaning that we will be less hesitant to fund them entirely via support from Good Ventures.
We have been through several proposals on how to handle this issue, and would welcome feedback.