Note: in this post, “we” refers to the Open Philanthropy Project. I use “I” for cases where I am going into detail on thoughts of mine that don’t necessarily reflect the views of the Open Philanthropy Project as such, though they have factored into our decision-making.
Last year, we wrote about 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?
(The full post is here; note that it is on the GiveWell website because we had not yet launched the Open Philanthropy Project website.)
In brief, our answer was to consider both:
- An overall budget for the year, which we set at 5% of available capital. This left room to give a lot more than we gave last year.
- A benchmark. We determined that we would recommend giving opportunities when they seemed like a better use of money than direct cash transfers to the lowest-income people possible, as carried out by GiveDirectly, subject to some other constraints (being within the budget indicated above, having done enough investigation for an informed decision, and some other complicating factors and adjustments).
This topic is particularly important when deciding how much to recommend that Good Ventures donate to GiveWell’s top charities. It is also becoming more important overall because our staff capacity and total giving has grown significantly this year. Changing the way we think about the “bar for recommending a grant” could potentially change decisions about tens of millions of dollars’ worth of giving.
We have put some thought into this topic since last year, and our thinking has evolved noticeably. This post outlines our current views, while also noting that I believe we failed to put as much thought into this question as should have in 2016, and are hoping to do more in 2017.