This Fund Lets You Pool Your Money To Help The Most Efficient Charities

Americans donated a combined $268 billion to charity in 2015. Subtract the huge gifts from millionaires and billionaires, though, and each household really contributes around $2,500. That’s a lovely gesture, but not really change-the-world kind of coin, especially because it’s often spread among numerous pet causes.

So in February, the Centre For Effective Altruism, a philanthropy research group that advocates for cost efficient, evidence-backed interventions that help the most people per dollar spent, debuted its own fix for that problem: The Effective Altruism Funds. The EA Funds are comprised of four separate cause-related investment portfolios. The topics include global health and development, animal welfare, long-term future crises like extreme climate change, nuclear war, pandemics, and particularly unforeseen AI complications, and effective altruism community building (to research and fund similar programs).

Because they have large amounts to donate the funds’ managers can have direct conversations with cause groups, figuring out exactly what their wants and needs may be. When money gets doled out in a large grant, it’s often more impactful, a windfall that lets groups plan for bigger, catalyzing real change.

The topics include global health and development, animal welfare, long-term future crises, and effective altruism community building. [Illustration: dene398/iStock]

Those four funding opportunities may seem unrelated, but that’s sort of the point. Most effective altruists recognize that anyone trying to maximize the good they can do will face potential tradeoffs. Part of that includes the timeline for change. If everyone funds a cause because it can save the most lives immediately, for instance, more lives might be lost from the other causes that go neglected. Plus, EA devotees generally believe that all lives are created equal, the key word being “lives,” not just humans. Some recommendations apply to people suffering around the world, while others may aid animals trapped in abhorrent factory farming conditions.

The group has yet to disclose how much it has collected for continuing EA work or how it will be used. At the same time, previous investments–like the organization’s Giving What We Can pledge to commit 10% of your annual income toward EA-related charities–may help the new venture gain traction. Since that effort started in 2009, more than 2,500 people have signed up, generating an estimated $59 million in donations. That pledge group is now recommending giving to EA Funds.

The default settings on its online giving platform are 45% to global health and development, 20% a piece to animal welfare and future issues, and 15% to the EA community. [Illustration: dene398/iStock]

CEA’s cofounder and CEO William MacAskill calls this the “people’s foundation” model of empowerment. “Any individual donor on their own might not have that much power, but if the community acts together they can have the sort of influence that major foundations like the Gates Foundation have,” he writes in anonline introductionabout the funds. Because the funds are ultimately managed by an individual and not an institution, they can be doled out more quickly, providing immediate assistance to groups that might require it in an emergency, rather than waiting for the next grant cycle.

To avoid diluting its own impact, CEA kept the offerings intentionally narrow. For those who can’t decide what to put in each bucket, it’s done some math. The default settings on its online giving platform are 45% to global health and development, 20% a piece to animal welfare and future issues, and 15% to the EA community.

Each fund is managed by a representative from GiveWell or the Open Philanthropy Project, two nonprofit charity evaluators in the space, both of which have public track records about what groups they’ve recommended in the past and why. So far, however, the distribution approach of each fund has varied widely.

For health and development, Elie Hassenfeld, the cofounder and coexecutive director of GiveWell, is currently not using the pool-for-impact strategy but rather distributing all money coming in directly to the Against Malaria Foundation, which is in need of constant and perpetual funding to do things like distribute insecticide-treated bed nets in sub-Saharan Africa.

Many see this the effort as an open-sourced kind of philanthropy, documenting theories on what might attract donations and spur smart change. [Illustration: dene398/iStock]

For animal welfare, Lewis Bollard, who performs similar research for Open Philanthropy, has opted to split the first $180,000 raised among nine different cause groups, from Animal Equality, an advocacy organization, to New Harvest, a “clean or cultured meat” group. As he notes inpublic strategy announcement, the goal is to send a signal that there are lots of shortfalls across the sector while funding groups that Open Philanthropy already give to but can’t chip in more, or likes but aren’t ready to give to until they prove themselves.

For long-term future fixes, Nick Beckstead, another program officer at Open Philanthropy, fulfilled a request from the Berkeley Existential Risk Initiative, which needed $50,000 for continuing research. Beckstead’s EA Fund has yet to raise that, so he used what he had in the coffers and searched out a partner. In this case, that was the EA Giving Group, a Donor Advised Fund that he co-manages in another joint venture separately. The new pooled-contribution EA Fund gave $14,800 while the like-minded DAF covered the difference.

Not surprisingly, many EA disciples are tech buffs. Facebook cofounder Dustin Moskovitz and his wife Cari Tuna both give heavily and have ties to GiveWell and Open Philanthropy. Many see this the effort as an open-sourced kind of philanthropy, documenting theories on what might attract donations and spur smart change while sharing data on any personal experiments that appear to be working. To that end, the EA Funds launch is more iteration than pure invention. As MacAskill notes, the concept was preceded by a novel donor lottery that pooled money among participants (winner-take-all, with public pressure to spend wisely) and the EA-based Donor Advised Fund that Beckstead, one of the new fund managers, was already involved with and sharing about openly.

In its search to optimize the process, there’s sure to be more tinkering. “Ultimately, it could even be that anyone in the EA community can run a fund, and there’s competition between fund managers where whoever makes the best grants gets more funding,” writes MacAskill.

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