We continue to seek operating support, and we’ve seen some confusion on the part of donors about whether we think that’s the highest-impact giving opportunity available. This post provides an update on our fundraising; it is aimed at close followers of GiveWell, particularly those who have a high degree of trust/alignment with us and are primarily seeking to make the highest-impact gift according to our (personal, admittedly biased) opinion. To be clear, our (the co-founders’) opinion is that for such people (as opposed to the bulk of our donors, who we feel place more emphasis on neutral recommendations, evidence bases, etc.), direct, predictable support of GiveWell represents the highest-impact giving opportunity, up to the point where we hit our excess assets policy (the further revenue required to reach this point would be only a fraction of our projected money moved). Details follow.
We wrote previously about GiveWell’s need for operating funding, stating:
our projected expenses have risen significantly, and we now have the largest projected funding gap in our history: we project ~$1.2 million in expenses over the next year, against ~$850,000 in revenue. We have about $900,000 of reserves available, so failing to close the gap would not mean insolvency, but it would mean drawing on our reserves, something we seek to avoid. So fundraising will become a significant priority until the gap is closed (and may continue until we also have a comfortable level of reserves on hand, i.e., ~12 months’ worth).
Since then, we have reached out to the donors we felt were most likely to provide substantial support, and have also seen some interest in supporting us as a result of our blog post. As of this week, we are now projecting ~$1.1 million in repeating revenue (i.e., revenue that we expect to occur for both this year and next year), still about $100,000 short of projected expenses.
We’ve discussed whether we would de-emphasize fundraising if another $100,000 came in, and we don’t think we should at this point. Our reserves remain below the 12-month level; we expect our expenses to rise substantially in the future; and since much of the revenue we’ve added in to date is from a few very large donors, we still feel we have major room for improvement in terms of diversifying our funding base.
We think a more appropriate target might be to fundraise up to the point where we hit our excess assets policy (at which point further revenue would be granted out to avoid excessive pile-up of reserves). We estimate that ~$850,000 in further revenue would cause us to hit this point; that amount would be only a fraction of our projected money moved.
There are some reasons that supporting us now might not be appealing. We are not in dire straits, and the benefits to improving our position further are admittedly highly intangible (though, we believe, real and important enough to be worthy of our continued effort). In addition, our attitude toward fundraising – particularly with regard to the question of what Good Ventures’s role should be – remains somewhat in flux, and we may change our aims and our policy again in the next few months (though if we do, we will certainly offer supporters a chance to ask that their donations be re-granted if it seems appropriate to do so). Our top charities have stronger evidence bases and higher likelihood of tangible, short-term impact, and we continue to promote these to the general public.
With that said, we wish to be clear that our (the co-founders’) opinion is that direct support of GiveWell represents the highest-impact giving opportunity for donors with a high degree of alignment/trust in GiveWell.
This is not a position we’ve always held (there have been times when we’ve actively discouraged or at least not encouraged direct donations beyond what we were already projecting) or a position we expect always to hold. Much of our thinking is that we expect many of the best giving opportunities we find (now and in the future) to be funded by Good Ventures or by other major donors that we encounter in the future, but the goal of “diversifying GiveWell’s donor base” is something that individual donors can accomplish and Good Ventures can’t.
More on our funding needs at our October post on the subject.