Published on October 23, 2024 7:00 PM GMT
Let's say you run a non-profit, and you and some of your co-workersare there for EA reasons. The EA Forum is going to be hosting a MarginalFunding Week and you're trying to decide whether to post anappeal. How do you decide whether you're ready to raise funds fromthe EA community?
At a high level, I think you should go ahead if you can explainwhat you'd do with the money and are willing to share thedetails that will let people determine if your overall case isstrong enough. As a community I think we should generally have higherstandards for projects that have been running longer, and for onestrying to raise larger amounts of money.
New projects, both in the for-profit and non-profit world, generallyget off the ground with the engagement of a small number of funderswho are comfortable with the risk-reward tradeoffs of early-stagework. Sometimes these funders are highly engaged and provide adviceand connections, other times they're giving some start-up funds andhoping it works out, but either way they're taking a substantial riskof failure on each bet in the hope of getting some hits.
In the for-profit world societies worry that most people not beingsufficiently sophisticated to make this kind of investment, andgenerally draw some sort of line between accreditedinvestors (who can be assumed to know the risks they're takingwith early-stage ventures) and the rest of us (who might be dazzledinto putting our life savings into a scam). To sell your stock to thegeneral public you need to first disclose a lot of informationabout your business: detailed financial statements, risks, whatyou'll do with the money, etc.
The non-profit world is pretty different: while you do have to makesome limitedinformation public, the disclosure requirements are relativelyminimal. There's no obligation to share facts that a reasonabledonor would want to consider.
While I wouldn't advocate extending public-company-level regulation tothe non-profit world, this is a place where the EA community hashistorically tried to shift norms in the direction of moretransparency, and I think we should continue to do this:
One of the biggest flaws of the non-profit approach is how muchweaker the feedback loops are than in for-profit work. There are manyways altruistically-motivated work can become disconnected from theends it's intended to advance. A culture of sharing and criticallyevaluating this information can help keep organizations focused, andkeep the money going to the organizations that can best apply it.
If we become a community where people can raise substantialfunds by simply saying they're EAs working on an important problemwe'll end up with lots of people who make the right noises but don'tactually put funds to good use.
Even if most people reading an appeal don't think hard aboutwhether it all checks out, having this information out there allowsdedicated independent people to make comparisons and share theirresults. This amplifies both effects above.
The things I'd most like to see in public funding requests are:
What will you do with the money? Not just what do youdo in general, but what will you be able to do if you raise theseadditional funds. Note that describing the work you'd do on themargin means that they work you're describing is, well, marginal.If instead you made the case for your strongest work, the work thatyou'd only cut if your funding dropped off dramatically, this wouldlead donors to overestimate the benefit of funding you and soallocate their funds less well.
What's your track record? Funding early-stage projectstypically involves a good amount of evaluating the team as people,figuring out how much you trust them to take your money in a newdirection. But if you're "going public" this kind of interpersonalevaluation breaks down: you can't have dozens of EAs on the Forumbooking slots on your calendar to get a sense of whether you seem toknow your stuff and be the kind of person who will execute well onyour vision. Instead, point at concrete accomplishments.
What is your financial situation? What are your mainexpenses and sources of income? Anything people wouldn't expect? Howmuch money do you currently have? How long is your runway?
Additionally, it's pretty valuable to also share:
Why is this worth doing? While this isn't informationdonors can get only from you it's probably something you're especiallywell positioned (and incentivized) to provide. What problem are youaddressing? Why is it important? How will success at your plannedefforts improve the situation?
Where does your work fit in? What are the otherorganizations trying to solve this problem? Why are you taking yourspecific approach? Are some of these other groups a better fit fordonors with certain outlooks or values?
What are the key risks? What are the most likely reasonsyou might fail to make progress? Could your work actually be harmful?If there are major uncertainties on your path to impact, what are theyand how are you addressing them?
What's your longer-term model? Are you hoping to bephilanthropically funded indefinitely? Is this funding that will getyou to a place where you can instead convince governments, privatecompanies, or consumers to fund you or others to do this work? Isthis the kind of project that needs long-term investment to be worthit?
How can people tell if you're succeeding? If you'reposting again in Fall 2025 saying that you had a great year and askingfor money for 2026, how will we be able to tell whether you actuallyhad a great year? This is closely related to "what will you do withthe money?", but instead of focusing on impact it's focusing onevaluation: how will you and others be able to tell if your effortsare working. Are there specific milestones you expect to hit?Measurable outcomes we'll be able to observe?
If you're not ok including this information in your funding request,or at least answering these and similar questions as they come up inthe comments, then it's worth considering whether you're in a goodposition to solicit funds from the community.
Another consideration in making a public request for funding is thatby putting your org out there like this you're opening yourself up tomore criticism. Asking the EA community for funding is, in somesense, quite audacious: it's a claim that your organization is one ofthe very best ways to turn money into a better world. That's a highbar and the EA community can be a critical group! I think on balanceEA's critical outlook is positive: if I make what I think is a solidand relatively complete case for my work, and other people who'vethought hard about how to make the world better don't think itmeasures up, that certainly hurts, but it's an important check. Thehistory of non-profit work includes many people who've overestimatedthe value of their work and would have been able to have much moreimpact if they'd taken a different approach.
On the other hand, it's easier tocriticize than thando, and it's important to nurturetransparency by recognizing when people are sharing informationthey could have kept internal. It's important to recognize that thereare real people with feelings behind each organization, who in manycases have poured a substantial portion of themselves into thesevessels for positive change. We need the critical side of our cultureto keep us focused on impact, but we need to balance it with empathy,kindness, and a sense that we're on one big team pulling together.
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