EA - What might FTX mean for effective giving and EA funding by Jack Lewars

Link to original articleWelcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: What might FTX mean for effective giving and EA funding, published by Jack Lewars on November 15, 2022 on The Effective Altruism Forum.FTX's demise is understandably dominating EA discussion at the moment. Like everyone in the community, I’m primarily just really sad about the news. A lot of people have been hurt; and a lot of funding that could have been used to do a staggering amount of good is no longer available.I’m also aware of the dangers of publishing reactions too quickly. Many of the facts about FTX are not clear. However, the major effect of recent events on EA funding seems fairly unambiguous: there is substantially less funding available to EA today than there was a week ago.Accordingly, I think we can lay out some early food for thought from the last year or so; and hopefully start an evolving conversation around funding in EA, and effective giving more broadly, as we learn more.(P.s. Much of what is below has been said before but it seems helpful to summarize it in one place. If it’s your work I’m drawing on, I hope you see this as validation of what you saw that others didn’t. I’ll link to you where I can!)We need to aim for greater funding diversity and properly resource efforts to achieve thisSaying “we should diversify our funding” is almost cringingly obvious in the current circumstances. But a lot of the discussion about funding over the last year seemed not to acknowledge the risks when ~85% of expected funding is supplied by two pots of money; and when those pots are effectively reliant on the value of 2-3 highly volatile assets. Even when these issues were explicitly acknowledged, they didn’t seem to influence the way funding was forecasted sufficiently - discussions rarely seemed to consider a future where one or both sources of funding rapidly declined in value. We may find out in the coming months that grantees didn’t consider this risk sufficiently either, for example if they bought fixed assets with significant running costs.Funding diversity is important not just to protect the overall amount of funding available to EA. It’s also vital to avoid a very small number of decision-makers having too much influence (even if they don’t want that level of influence in the first place). If we have more sources of funding and more decision-makers, it is likely to improve the overall quality of funding decisions and, critically, reduce the consequences for grantees if they are rejected by just one or two major funders. It might also reduce the dangers of money unduly influencing moral and philosophical views in a particular direction.In short: it's still important to find new donors, even if the amount of existing funding is very large in expectation.Of course, it is significantly easier to say we should diversify than actually to diversify. So what could we do to try to mitigate the risks of overly concentrated sources of funding?Bring more donors at every level into EAIt seems wise to support organizations that can broaden the funding base of EA. Recently, there has been a move to prioritize securing major donors (and, in some extreme cases, to suggest that anything attracting small donors is a waste of time). Seeking more super wealthy donors is a sensible move (see below), but there is a reasonable case for seeking more donors in general at the same time. More donors in EA means more reliable, less volatile funding overall. Additionally, even if the amounts they give seem trivial by comparison, small donors can still make a difference, for example by funging dollars back to larger donors, who can then give more to things that are less popular, more technical or higher risk.To this end, we should celebrate, encourage and (most importantly) fund the wide range of projects that attract effective givers - pledge organizations (One for th...