The GiveWell Blog

Good Ventures and giving now vs. later

GiveWell and Good Ventures no longer follow the approach outlined below in 2015 to direct Good Ventures’ funding to GiveWell’s top charities. The approach changed in 2016; Good Ventures now gives to GiveWell top charities according to a budget it sets with the Open Philanthropy Project that takes into account its total giving and priorities, and is not tied to the size of GiveWell’s top charity funding gaps.

We’ve been wrestling lately with the question of how much Good Ventures, a foundation funded by Cari Tuna and Dustin Moskovitz that works with GiveWell on the Open Philanthropy Project, should be aiming to give at this early stage in its development. As discussed previously, we (the Open Philanthropy Project) are prioritizing building knowledge and capacity over investigating specific potential grants. But this still leaves the question: once we have investigated a potential grant, how do we decide where the bar is for recommending it? With all the uncertainty about what we’ll find in future years, how do we decide when grant X is better than saving the money and giving later? This question is especially important when considering what size grants to recommend to GiveWell’s top charities: these giving opportunities have been investigated to about the maximum extent possible, and this year they have considerable room for more funding. Good Ventures could support them at a level anywhere in between $0 and $100+ million, and they’ve asked us to recommend an amount and allocation, with the aforementioned questions in mind.

In this post, we lay out our working framework for questions like this. In brief, we aim to recommend giving based on:

  • An overall budget for the year, based on the Open Philanthropy Project’s current stage of development and on Cari and Dustin’s goal of giving the vast majority of their wealth to charity during their lifetimes (not leaving an endowment behind). Since the Open Philanthropy Project is currently at an early stage, we are setting the budget at 5% of total available capital; this percentage will rise as the Open Philanthropy Project develops further and our capacity for finding the best possible giving opportunities improves (as discussed previously).
  • A benchmark against which all grants should be compared. Once we’ve investigated a giving opportunity and formed a view of its value, we will recommend it based on how we think it compares to the benchmark. Our working benchmark is direct cash transfers to the lowest-income people possible, as carried out by GiveDirectly. In other words, giving opportunities that seem significantly better than direct cash transfers will be recommended (as long as there is room in the budget set by the previous bullet point).
  • A number of complicating factors and adjustments. Most importantly, (a) we plan to use a more forgiving benchmark when recommending early grants in an area; (b) we need to be mindful of the incentives we’re creating for other donors, which will often mean declining to fill a full funding gap.

The remainder of this post will:

  • Explain the reasoning behind the basic criteria: the budget of 5%/year and the benchmark of direct cash transfers.
  • Discuss complicating factors and adjustments.
  • Lay out what this means for our recommendation this year regarding GiveWell’s top charities.

The basic criteria


The Open Philanthropy Project is still relatively early in its development. At some point, we expect that we will reach what one might call “peak capacity” in terms of staff size and ability to evaluate giving opportunities. We think this will be the appropriate time to reach “peak giving” as well – to be recommending grants at a rate consistent with drawing down the full amount Cari and Dustin are hoping to give away within their lifetimes.

However, for now – since we still have so much progress to make in terms of learning and capacity building – we think it makes sense to err on the side of recommending grants totaling a relatively small percentage of the available capital. We think the idea of a “relatively small percentage” maps intuitively to 5%, because:

  • 5% is the minimum payout for private foundations in the U.S. Most of the money Cari and Dustin are looking to give away is currently in the form of personal wealth rather than in a private foundation, so this requirement doesn’t have much direct practical impact; its significance is more that as long as recommendations total under 5% of available capital, this will be a fairly low level relative to what most major foundations are doing.
  • 5% is a reasonable approximation to the (real) investment return Cari and Dustin might expect over time, so recommending grants totaling 5% a year might be expected to maintain their capital at a roughly constant level over time.

As long as total giving is below 5%/year, we’ll be happy to recommend more (subject to the benchmark below), and feel this is consistent with preserving option value for the bulk of future giving.

Benchmarking against direct cash transfers

By default, we feel that any given grant of $X should look significantly better than making direct cash transfers (totaling $X) to people who are extremely low-income by global standards – abbreviated as “direct cash transfers.” We believe it will be possible to give away very large amounts, at any point in the next couple of decades, via direct cash transfers, so any grant that doesn’t meet this bar seems unlikely to be worth making.

We note that current gifts to GiveDirectly appear substantially better than “pure” cash transfers, because they have value to GiveDirectly’s trajectory as an organization and they are usually funding experiments; the “direct cash transfers” term here essentially refers to GiveDirectly’s intervention in isolation, ignoring those benefits. (And we think those benefits would be negligible for e.g. the 200 millionth dollar disbursed by GiveDirectly in a given year.)

It’s possible that this standard is too lax, since we might find plenty of giving opportunities in the future that are much stronger than direct cash transfers. However, at this early stage, it isn’t obvious how we will find several billion dollars’ worth of such opportunities, and so – as long as total giving remains within the 5% budget – we prefer to err on the side of recommending grants when we’ve completed an investigation and when they look substantially better than direct cash transfers.

It is, of course, often extremely unclear how to compare the good accomplished by a given grant to the good accomplished by direct cash transfers. Sometimes we will be able to do a rough quantitative estimate to determine whether a given grant looks much better, much worse or within the margin of error. (In the case of our top charities, we think that donations to AMF, SCI and Deworm the World look substantially better.) Other times we may have little to go on for making the comparison other than intuition. Still, thinking about the comparison can be informative. For example, when considering grants that will primarily benefit people in the U.S. (such as supporting work on criminal justice reform), benchmarking to direct cash transfers can be a fairly high standard. Based on the idea that the value of additional money is roughly proportional to the logarithm of income,[1] and the fact that mean American income is around 100x annual consumption for GiveDirectly recipients, we assume that a given dollar is worth ~100x as much to a GiveDirectly recipient as to the average American. Thus, in considering grants that primarily benefit Americans, we look for a better than “100x return” in financial terms (e.g. increased income). Of course, there are always huge amounts of uncertainty in these comparisons, and we try not to take them too literally.

When these criteria apply

When we have completed an investigation of a potential grant, we intend to compare the likely value of the grant to that of direct cash transfers, and – if it appears substantially stronger and there seems to be room to make the grant while still being within our total budget for the year – move forward with the recommendation. However, this doesn’t mean that we plan to investigate every grant that might fit these criteria. At this stage, we are short on time relative to funding, and we spend time only on what we see as the highest-value activities we can identify.

Complications and adjustments

Exit grants

If we recommend supporting an organization, we need to think through what will happen if we later change our minds and decide that supporting the organization no longer meets our criteria. In many (though certainly not all) cases, we will feel the need to recommend “exit grants” in order to unwind our support gradually and give the recipient organization time to plan and adjust; without this practice, we could undermine organizations by causing them to plan suboptimally, and we could risk becoming the kind of funder that organizations are hesitant to work with.

Any potential “exit grants” need to be accounted for when considering the size of the grant and how much it should count toward our budget.

Knowledge/capacity building

We’ve written before that it can be helpful (and even necessary) to commit to recommend grants in a cause, in order to learn about the cause as a potential focus area. We think the “direct cash transfers” benchmark laid out above is most appropriate when applied to causes we know well and have a decent ability to evaluate; for early grants in causes we’re still exploring, we think it can often be a good idea to be less strict in applying this standard (though we don’t want to support things that are clearly much worse than direct cash transfers, nor do we want to enter any cause where there doesn’t seem to be a plausible path to grants that are much better).

When we’re extremely early in a cause, at the stage of making grants whose primary purpose is learning, we don’t see the need to make a comparison to direct cash transfers at all. When we’re somewhat advanced but still have a lot of learning to do – as is the case for our current U.S. policy focus areas – we’re going to look for grants that are at least competitive with direct cash transfers.

Coordination issues

As we’ve written before, trying to anticipate and adjust to other givers’ behavior can lead to thorny-seeming dilemmas. We do not want to be in the habit of – or gain a reputation for – recommending that Good Ventures fill the entire funding gap of every strong giving opportunity we see. In the long run, we feel this would create incentives for other donors to avoid the causes and grants we’re interested in; this, in turn, could lead to a much lower-than-optimal amount of total donor interest in the things we find most promising.

Encouraging other donors to help support the causes and organizations we’re interested in – and ensuring that they have genuine incentives to do so – will sometimes directly contradict the goal of fully funding the best giving opportunities we see. Thinking about GiveWell’s top charities provides a vivid example. If we recommended that Good Ventures fully fund each of our top charities, GiveWell would no longer recommend these charities to individual donors. In the short run, this could mean forgoing tens of millions of dollars of potential support for these charities from individuals (this is how much we project individuals will give to our top charities this year). In the long run, the costs could be much greater: we believe that individual-donor-based support of GiveWell’s top charities has the ability to grow greatly. A major donor who simply funded top charities to capacity would be – in our view – acting very suboptimally, putting in a much greater share of the funding than ought to be necessary over the long run.

Over the past couple of weeks, we’ve had many internal discussions about how to reconcile the goals of (a) recommending as much giving as possible from Good Ventures to top charities, which we consider outstanding giving opportunities; (b) preserving long-run incentives for individuals to support these charities as well. The proposals that have come up mostly fit into one of three broad categories:

1. “Funging” approaches. Individuals do most of their giving in December. We could wait until we’ve seen how much support comes in for each of our top charities, and then – in, say, February of 2016 – recommend Good Ventures grants to fill whatever funding gaps remain.

This would have the advantage of fully funding top charities, while not spending more (in the short run) than necessary to do so. However, it would have the disadvantage of creating a long-term incentive for individuals to stop supporting our top charities, since the only effect of their giving (in this scenario) would be to reduce the amount we recommend to Good Ventures. Most individuals would probably not notice this issue unprompted, but it’s very important to us to be open with our audience about the pros and cons of taking our recommendations, and we don’t want our offering to be valuable/attractive only to people who misunderstand it.

There are a variety of “funging” approaches that are less precise and less obvious than the one outlined above, but that we feel ultimately have the same basic pros and cons. Any approach that is designed to ensure that the entire funding gap is always filled will be creating the kind of problematic incentives outlined here.

2. “Matching” approaches. Rather than recommending that Good Ventures fill the remaining funding gaps after accounting for individuals, we could recommend that they give $1 for each $1 we track from individual donations. This would create the opposite incentives to those created by “funging”: it would mean that individuals had a magnified, rather than reduced, incentive to support top charities.

The disadvantage of this approach is that it would tie the recommended level (and allocation) of Good Ventures’s funding to decisions made by individuals. This could result in recommendations to give much less than is optimal, or much more, or much differently (e.g. with a much different allocation across charities). There are also logistical challenges involved with matching programs.

3. “Splitting” approaches. When trying to coordinate with another funder who can’t be directly negotiated with, one approach is to come up with what seems like a “fair share” of the funding gap each would provide, and simply recommend that Good Ventures commit to providing its “fair share” – no more and no less, regardless of the other funder’s behavior.

This approach has pros and cons somewhere in between those of the other two.

  • Incentives: The incentives it provides other donors aren’t actively positive (as with matching). But they are neutral, provided that the “fair share” is chosen in a principled way rather than as a response to the projected behavior of the other funder.
  • Amount and allocation: The amount recommended at a given time will not be optimal (as it is with “funging” approaches). But unlike with “matching,” we recommend closing a substantial proportion of each important funding gap, and prioritizing the higher-value funding gaps, regardless of how other donors behave.

Our preference at the moment. All three of these approaches have issues. Even in theory, it’s hard to reconcile the basic goals of (a) closing important funding gaps and (b) creating good incentives for other donors. When dealing with another major donor whom we can have a direct discussion with, it is often possible to be mutually honest about our thinking and agree to a fair-seeming split; but when thinking about how to coordinate with a large number of individual donors whose time and attention is scarce, any approach we take will be suboptimal in some major ways.

For this year, we have chosen the “split” approach. It is relatively simple to execute (unlike “matching” approaches) and keeps incentives relatively simple for donors (unlike with “funging” approaches). It avoids the worst problems with each of the other approaches, while not being perfect by any criterion.

Specifics of our recommendation re: GiveWell’s top charities

The split we have chosen regarding GiveWell’s top charities is:

  • For the highest-value giving opportunities, we want to recommend that Good Ventures funds 100%. It is more important to us to ensure these opportunities are funded than to set incentives appropriately.
  • For giving opportunities that are above the benchmark we’ve set but not “must-fund” opportunities, we want to recommend that Good Ventures funds 50%. It’s hard to say what the right long-term split should be between Good Ventures (a major foundation) and a large number of individual donors, and we’ve chosen 50% largely because we don’t want to engineer – or appear to be engineering – the figure around how much we project that individuals will give this year (which would create the problematic incentives associated with “funging” approaches). A figure of 50% seems reasonable for the split between (a) one major, “anchor” donor who has substantial resources and great conviction in a giving opportunity; (b) all other donors combined.

More specifically, we have chosen the recommended amount and allocation as follows:

  • Let X = the total funding gap for the highest-value, “must-fund” giving opportunities. For this year, we consider the “capacity-relevant” and “incentive” gaps discussed in the previous post to be in this category; they total $24.9 million.
  • Let Y = the total funding gap for the giving opportunities that are both above the Good Ventures benchmark (i.e., significantly better than direct cash transfers) and seem to be an excellent fit for individual donors, in the sense that we would feel we were offering individuals excellent options if we could offer only these opportunities. This figure is important because when thinking about how we want to influence incentives for other donors, we need to consider which other donors would be a logical fit for the giving opportunities we’re looking at. (When we look at giving opportunities that have no other logical supporters, it is less important to think about other donors’ incentives, for example.) For this year, we arrived at this figure by summing the first eight funding gaps listed previously, plus half of the ninth gap.
  • The total we are recommending Good Ventures give to GiveWell’s top charities is the greater of (100%*$X) and (50%*$Y). This approach ensures that all “must-fund” opportunities are funded (we prioritize fully funding these over setting incentives properly); it is, however, willing to pass up a significant amount of “above the benchmark but not must-fund” opportunities in order to ensure that we’re not creating long-term problems regarding incentives. For this year, the total figure is ~$44.4 million.
  • We would have capped the figure if necessary to fit total recommendations for the year within the budget of 5% of total capital, but this wasn’t necessary (even when taking potential “exit grants” into account).
  • Once the total figure is arrived at, it isn’t obvious how to distribute it among charities. One approach would be to apply the 50% split to each charity below the “must-fund” line, thus ensuring that each charity retains substantial room for donations from individuals. Another approach would be simply fund each gap, in order of priority, until the $44.4 million is exhausted; this has the advantage of prioritizing the highest-value funding gaps first. This year, the two approaches would have had fairly similar outputs, and we went with the latter after noting that it still left a fairly attractive set of giving opportunities for individuals.

We are currently reasonably happy with the output of this approach. It reliably leads to recommending that Good Ventures fill a significant part of top charities’ funding gaps, while also being principled enough to avoid any reality or appearance of “funging” that might create problematic incentives for individuals. We felt this was the best approach we could come up with given time constraints, since we wanted to announce our recommendations to Good Ventures along with our recommendations to individuals, so that individual donors would have the knowledge of our recommendations to Good Ventures before making their own giving decisions.

That said, we’re fairly early in our thinking on these issues, and we recognize that the approach we’ve chosen does not seem close to fully optimal or fully satisfying. We plan to revisit our approach next year, and we welcome more thought on how to answer this question in the future.

[1] See e.g. Subjective Well‐Being and Income: Is There Any Evidence of Satiation?:

For instance Deaton (2008) and Stevenson and Wolfers (2008) find that the well-being–income relationship is roughly a linear-log relationship, such that, while each additional dollar of income yields a greater increment to measured happiness for the poor than for the rich, there is no satiation point.


  • Evan Gaensbauer on November 26, 2015 at 6:24 am said:

    Hi Holden, a couple points:

    1. how does the idea of direct cash transfers square with global catastrophic risks? Global catastrophic risks have anywhere from a very small to perhaps slight majority chance of happening depending on who you ask, although estimating the likelihood and timescale of any global catastrophic risk is a major point of contention on any given risk. So, it’s difficult to assess the potential harm of a GCR, and the value of preventing them, whether based on expected value, probability estimate, or counterfactual reasoning. GCRs also arguably effect several million people, to all currently living people, to perhaps future generations as well. Since it’s so difficult to assess scale of a GCR, the impact of a given intervention on any one GCR, and the fact Givewell has a history of not taking expected value estimates literally, I’m guessing at this point Open Phil will be giving to learn or to explore capacity-building in the GCR-space, rather than doing so as an explicit attempt to decrease the chance of the risks, even though that’s an ultimate goal.

    2. While the effective altruism community may not be as sensitive to changing its strategy quickly as one might hope, it is a coordinated community which has an acute awareness of RfMF issues as put forth by Givewell, and has a great level of trust of Givewell in general. This grants Givewell an advantage in communicating with effective altruism as a large bloc of donors if you’re worried about coordination issues. Don’t be afraid to ever approach the EA community at large or also a specific organization, such as Giving What We Can, to spread a message to increase or decrease donations to particular recommended charities over the coming months or year(s). I expect this might be more of a critical issue in the possible future than now, if, for example, the reputation of Givewell and its recommended charities for charity evaluation grows much greater than the EA community as a whole, and so there is a greater absolute number of money moved to top-recommended charities from outside of the EA community rather than from within it.


  • Michael Dickens on November 26, 2015 at 12:00 pm said:

    Is there a feasible way to test different coordination approaches? Perhaps one year promise that GV will fill the room for more funding for top charities, and another year provide matching. Or you could fill RFMF on one top charity and provide matching on another. There are some problems with both these strategies but there might be some better way.

  • Kevin Burke on November 26, 2015 at 12:50 pm said:

    Curious if you’ve reached out to any economists about this? Resource allocation/auction/price theory has a fair amount of research behind it, maybe it could be useful?

  • Evan:

    • It’s definitely the case that we’re in a capacity-building phase on GCRs and will set the bar accordingly. Longer-term, I agree that it’s unclear how to compare GCR reduction with cash transfers quantitatively. This post didn’t intend to give a complete guide to executing on the principle, but rather simply to lay out the tentative principle. If necessary, we’re just going to go with gut judgments about what is and isn’t better than cash transfers.
    • I would already say it’s the case that, when it comes to individual donors, “there is a greater absolute number of money moved to top-recommended charities from outside of the EA community rather than from within it.” If there were something we thought people in the EA community could do to help further our mission, in particular, we would try to get the word out about this. But note that we don’t want to adopt a policy of asking anyone (Good Ventures, EA community members, or anyone else) to “offset” individuals’ donations to top charities, for reasons laid out in this post.

    Michael: certainly we could change things up from year to year, but it’s not clear what we would gain from this. The concerns I laid out above, particularly re: “funging” approaches, are conceptual and related to long-term issues. I wouldn’t drop my concern over one of these issues based on giving data from one or two years.

    Kevin: we haven’t yet, but we probably will in the coming year.

  • Maxwell Fritz on December 3, 2015 at 10:35 pm said:

    I appreciate GiveWell being extremely transparent about their thinking on this.

    I strongly dislike funging or matching. I’m glad GoodVentures is filling 100% of the highest value gaps.

    I think the downsides of GoodVentures fully funding GiveWell’s top recommendations are overstated. I’d rather GiveWell completely fill the top through GoodVenutes and make additional recommendations for the public, even if it’s a less marketable list. That’s what would be most devoted to GiveWell’s core service to the public of identifying true funding gaps.

    That said, your approach is very thoughtful, and extremely reasonable especially when trying to optimize overall impact instead of more narrowly on the service to public donors.

  • Slightly unrelated, but I found myself thinking about the benefits of lump-sum donations vs sustained but lesser donations. For example, say I come into $20,000 through an inheritance or whatever, and I wish to use it to try to help the world. I have two choices: I could make a one-off $20,000 donation to (for example) AMF, or I could set it up so that I donate $1,650 a month. Which would do more good – on the one hand, sustained donations do help groups like AMF to attract other donations, leading to a kind of ‘building’ effect, but on the other hand there may be some benefits to receiving a lump sum that I’m aware of (being still pretty new to this whole ‘giving effectively’ thing).

  • Holden on December 8, 2015 at 5:09 pm said:

    Allan, I think it depends heavily on the specifics of how much you’re giving (and to where). I do think there’s value in maintaining a somewhat regular giving schedule just so that charities are able to plan as accurately as possible.

  • Regarding incentives with funging: as an individual donor this is indeed a concern. However, if it’s the case that Good Ventures has committed a specific amount towards well-rated charities (to be disbursed over some time horizon), the concerns are diminished: any contribution I make adds to the pool, rather than displacing contributions that would’ve been made by Good Ventures (even if the total amount for 2015 is fixed). I.e. the next dollar I donate will still have at least a donated-dollar’s worth of impact eventually (ignoring interest and other now-vs-later concerns). Could you further clarify the commitment made by Good Ventures? Thanks, and I very much appreciate your transparency on these issues.

  • Adam, Good Ventures has announced its grants for the year, and funding gaps remain, so any donation you make will have a donated dollar’s worth of impact this year.

    For reasons laid out in the post, our recommendation to Good Ventures was not based on our projections of individuals, nor do we expect it to be in the future.

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