This post provides an update on GiveWell’s operating budget and funding needs. It is aimed at close followers of GiveWell, particularly those who have a high degree of trust in and alignment with us and are primarily seeking to make the highest-impact gift according to our (admittedly biased) opinion.

Our 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.

Below, we provide more details on our current funding situation. For more background on our philosophy on fundraising, see our October 2013 post.

What are our current projected revenues and expenses?

We currently project 2015 revenues of $2.16 million and expenses of $2.33 million. We held $1.73 million in reserves at the end of October (the last month for which we closed our books before updating our budget forecast). Because we receive a large portion of our annual funding in December (approximately 40%), this tends to be the time of year when our reserves are lowest.

Our budget file (.xlsx) provides additional detail.

Our projected revenues include donations we expect to recur in the future (because donors have either explicitly told us that they would give again or because they have given consistently enough in the past that we expect their donations to recur) as well as some expectation that (a) some portion of lower probability donations recur and (b) organic growth in unrestricted revenues continues.

Our projected expenses include our best guesses about the number of staff we plan to add (erring on the conservative side — we’d prefer to project an additional hire we don’t make than lack the funds to hire someone outstanding) and the salaries we anticipate paying them.

How has our fundraising and budget situation changed over the past year?

Our staff grew substantially since the end of 2013. We made 7 additional hires in 2014 to bring our total staff size to 18. We also work with 7 conversation notes writers who produce high-quality summaries of conversations we have with experts.

We anticipate staff continuing to grow in 2015. We made several offers to summer research analysts, two of whom (so far) have accepted our offer of employment, and we project some additional hiring. In 2014, we also increased salaries for all staff who had been with us at least a year commensurate with their additional experience and contributions and GiveWell’s increased influence.

Some of this new staff has supported the Open Philanthropy Project, but most have primarily worked on our traditional work focused on top charities. We were able to produce in-depth reviews of significantly more charities than we had in the recent past while much of our senior staff time has gone to continuing our progress on the Open Philanthropy Project; this was made possible by the new staff we have brought on over the past 18 months.

Currently, we estimate that approximately 50% of our unrestricted funding supports the Open Philanthropy Project and 50% supports our traditional, top charities work. In addition, Good Ventures made a $675,000 grant in November 2013 to support research-related expenses for the Open Philanthropy Project.

At what point would we consider our funding gap closed?

At the point where we hit our excess assets policy, we would regrant any funds given to GiveWell to our recommended charities.

Using a conservative revenue projection (which we believe is appropriate when considering granting out funds), we project 12-month-forward expenses as of November 2015 (i.e., expenses we would incur from November 2015 to October 2016) of $1.76 million more than what we project holding in reserves. Therefore, we would require $1.76 million in additional funding before we would begin to grant out funds.

Under a different, less conservative revenue projection, we project 12-month-forward expenses as of November 2015 that are approximately $1.16 million higher than the reserves we project holding. Were we to receive $1.16 million more than we currently project, we would likely no longer encourage additional donors to give to us as strongly as we do today (e.g., via blog posts like this).

What will we do if we raise more or less funding than we anticipate?

If we raise more funding than we anticipate, we would likely reduce the staff time we put into fundraising. This is currently quite low but accounts for, on average, approximately 5 hours per month each from Elie, Holden, and Natalie, time that would otherwise be devoted to research. We currently plan to maintain this level of time commitment to fundraising and are optimistic that posts like this enable us to raise the funding we need without devoting more time to fundraising.

If we raise less funding than we anticipate, Elie and Holden would spend more time on fundraising. If this step didn’t succeed in raising the funding we need, we would consider the following options (likely in this order): (a) slowing or halting planned staff expansion, (b) requesting additional funding from Good Ventures, and (c) laying off staff. Note that we believe these scenarios are extremely unlikely given our current situation, but we require continued, growing support to ensure that we avoid them.

Are GiveWell’s projected operating expenses reasonable or excessive in light of its impact?

We anticipate 2014 money moved to top charities of approximately $25 million and project expenses in 2015 of $2.27 million. We previously wrote that we believe expenses that are 15% of money moved are well within the range of normal.

Good Ventures also directed an additional $8.4 million to funding opportunities identified by the Open Philanthropy Project. In 2014, we project spending approximately $300,000 of the Good Ventures’ research grant mentioned above.

What is our recommendation?

For donors who have a high degree of trust in and alignment with GiveWell, we recommend unrestricted gifts to GiveWell.

For donors who want to support our work because they value it but are otherwise primarily interested in supporting charities based on neutral recommendations, strong evidence, etc., we recommend giving 10% of their donation to GiveWell.

You can do this by sending us a check and filling out our check donation form (details on our donate page) with the allocation for your donation. If you’d like to give 90% of your gift to GiveWell for regranting to top charities and 10% to GiveWell unrestricted you can do so via this page: select the “grants to recommended charities (90%) and unrestricted (10%) option.