Incentivizing Charity Cooperation

There is a danger of charities competing when they could cooperate to increase their total impact. I describe the danger and propose a strategy for alleviating it.

Dangers of Breeding Competition

I see two success scenarios for effective altruism, one focused more on causes and one more focused on charities: (1) the top effective interventions get sufficient funding, solve the problems they address, new interventions become most effective, and the cycle continues; and (2) top effective charities get funding from EAs and foundations, less effective charities are incentivized to care less about the donor and more about the beneficiary, and their managements gear their interventions toward higher cost-effectiveness. This post focuses on the second scenario.

When I started getting involved with the running of a charity, with fundraising, and with organizing collaborative events, I didn’t know anything about effective altruism (this was in 2010–2011). I already had my intuitions about cost-effectiveness and its drops at the margin in some cases, but by and large I saw most charities as cooperating toward the reduction of suffering. That allowed me to be happy about almost any charity fundraising success no matter whether we had anything to do with it.

When I learned more about effective altruism, I realized how wasteful many charities are and how fundraising may do harm if it directs donations from more effective charities to less effective ones. Suddenly competition appeared where I thought only cooperation should rule.

At our EA Berlin meetup, we are worried that we’re not doing enough to address this problem. Melanie Joy, who started the discussion, reported that some people involved in animal charities that ACE deems less effective than its top charities have come to view these top charities as competitors even though they work together toward closely related goals. However, some of these people are actually open to learning how to improve the effectiveness of their charities.

Specialized Effectiveness Training

When I’ve been thinking about improving the effectiveness of charities, I always thought along the lines of targeted advocacy, where I would try to find a charity that moves a lot of money and has much room for improvement, find someone in a key position who might be open to improving something, contract them and make a case for a more effective allocation of their resources. This is complicated and cumbersome. In this case, however, there are actually just these people who are in key positions and are open to educating themselves. This is an amazing new perspective!

The problem is just that building up a highly effective charity in a specific cause area, running one or several specific interventions takes a lot of very specialized knowledge. The EA forum and the blogs of EAs and EA organizations are unlikely to hold the information that these people will need.

Prioritization organizations could probably give some advice here, but they would become a central hub for this sort of consulting and are probably too resource-constrained to do that. They also need to be generalists, so they might not have the knowledge at quite the level these trainees require. Alternatively, someone could start an EA McKinsey, but I’m not sure if that could work out financially. Consultants like Caroline Fiennes seem to focus more on advising donors than charities, but please let me know if there are already some that give quality advice to charities.

Rather the top charities themselves could help here. It is in the interest of their transparency anyway to keep their strategies and processes open to the public, for example in blog posts, but they could go beyond that and actually accept in staff members of interested less effective charities and work with them for some time, maybe a month or a year.

Cost-Effectiveness of EA Training

The main question is whether such a program could be cost-effective for the top charity and in general, and I’m not satisfied with the answer I can give to that.

First, the costs to the top charity are not comparable with the expenses they would incur through volunteers, interns, or even average new hires. Typically you invest into hiring, onboarding, training, and salaries in the hope that the employee will stay long enough to far outearn this initial investment. In this case, however, the less effective charity would react to a call for applications from the top charity, and the latter only has to review the applications it receives, which already reduces costs. (The interest in such positions will likely increase as effective altruism becomes more popular.) Then, crucially, these are people who already worked in the same cause area for years. Even though their charities’ performances might not be on par with the top charity yet, they are likely to be highly qualified in the same field. Training costs will be minimal. Finally, they may’ve solved problems at their own charities that the top charity still struggles with, so that the flow of experience is not strictly one-sided. All in all, the cost for the program is likely to be smaller than it would at first seem.

Second, these charities are cooperating toward a common goal, so the improvements of the less effective charities also count into the effectiveness side. The more money these charities move (and the lacking recommendation will unfortunately not have a crucial impact on that) and the greater their room for improvement, the greater will be the absolute improvement in impact that the program can achieve (and the more likely it is that they can afford to send an employee to such a training). If the program is very successful, the charities might even merge, which could enhance the effectiveness of both.

Incentivizing EA Training

It would be valuable to test these intuitions about the cost-effectiveness of such a program against real numbers that I currently don’t have. It would also be interesting to poll how many organizations of what size would already be interested in taking part in such a program at any current top charity, but I would expect that number to increase over time.

If the cost-effectiveness is sufficient, the program could be seen as increasing the effectiveness of the top charity via other charities, an additional argument for donating to them and for the prioritization organization to keep recommending them. That, in turn, would incentivize top charities to conduct such programs.

All the while the program would also thwart division among charities by showing them that EA is not only about finding the best charities and donating to them at the exclusion of all others but also about lifting those other charities to the same level of effectiveness as the top charities where this is possible.

See the EA Forum for the discussion.

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