EA - The current limiting factor for new charities by Joey

The Nonlinear Library: EA Forum

Welcome 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: The current limiting factor for new charities, published by Joey on March 19, 2024 on The Effective Altruism Forum.TLDR: we think the limiting factor for new charities has shifted from founder talent to early stage funding being the top limiting factor.We have historically written aboutlimiting factors and how they affect our thinking about the highest impact areas. For new charities, over the past 4-5 years, fairly consistently, the limiting factor has been people; specifically, the fairly rare founder profile that we look for and think has the best chance at founding a field-leading charity. However, we think over the last 12 months this picture has changed in some important ways:Firstly, we have started founding more charities: After founding ~5 charities a year in 2021 and 2022 we founded 8 charities in 2023 and we think there are good odds we will be able to found ~10-12 charities in 2024. This is a pretty large change. We have not changed our standards for charity quality or founder quality - if anything, we have slightly raised the bar on both compared to historical years.However, we have received more and stronger applications over time both from within and outside of EA. We think this trend is not highly reliable, but our best guess is that it's happening.Side note: This does not mean that people should be less inclined to apply. We now have a single application system that leads to opportunities in both charity founding, for-profit founding, and high-impact nonprofit researchsimultaneously.Secondly, the funding ecosystem has tightened somewhat inseed and mid-stage funding. (Although FTX primarily funded cause areas unrelated to us, their collapse has led to other orgs having larger funding gaps and thus the EA funding ecosystem in general being smaller and more fragile.)The result of this is we now think that going forward the most likely limiting factor of new charities getting founded will be early and mid-stage funding. (We are significantly less concerned about funding for our charities once they are older than ~4 years). This has influenced our recent work onfunding circles (typically aimed at mid-stage funding),Effective Giving initiatives, making ourseed funding network open to more people, as well as our recent announcement launching theFounding to Give program (this career path makes more sense the more founder talent you have relative to funding for charities).If I were thinking about the most important action for the average EA forum user to consider, I would consider if you are a good fit for the seed network (website,prior EA forum writeup).Thanks for listening. To help us out with The Nonlinear Library or to learn more, please visit nonlinear.org