Numerous EA organizations use a “multiplier” model in which they try to leverage each dollar they spend on their own operations by fundraising multiple dollars for other effective charities. My strong impression is that the number of donors who give to effective charities doing direct work is much larger than the number of donors who give to organizations that fundraise for effective charities doing direct work. I would like to understand why this is the case.
Below, I’ve listed some of the most common objections to the multiplier model I’ve heard in the EA community, and in my own experience pitching The Life You Can Save (where I work) and other multiplier organizations. I’ve put each of these objections as its own comment, please upvote if it applies to you. If you have a substantively different objection to the multiplier model, please add your own comment.
- I don’t believe the multipliers that fundraising organizations report (e.g. because they don’t appropriately adjust for money that would have been donated counterfactually, rely on aggressive assumptions, or ignore the opportunity cost of having people working at the multiplier organization)
- I feel an emotional “warm glow” when I give to charities that do direct work, but not when I give to multiplier organizations
- Multiplier organizations typically raise funds for a lot of different charities, and I only care about money that’s raised for the charity with the highest absolute impact
- There aren’t multiplier organizations available in the cause areas I care about
- I think multiplier organizations are significantly riskier than organizations doing direct work
- I think multiplier organizations have provided leverage in the past, but think that going forward the marginal multiplier will be lower than the average multiplier
- I’m generally skeptical of the multiplier model because it seems too good to be true
Thank you! This was exactly the sort of thoughtful explanation I was hoping for.
For what it’s worth, in my experience at TLYCS it takes a lot more than just a website to move money. When I look at the things that seem to have driven our growth over the years, a lot of it is simply having the capacity to do basic things like communicate more with donors. And the relative steadiness in TLYCS’s multiplier (between 9x and 13x from 2016-2019) as expenses more than tripled suggests that there’s not a huge difference between the marginal multiplier and the average multiplier (and that if anything, the marginal multiplier might be higher).
I do think your “step function” argument is getting at something interesting (though I’d say you’re overestimating the availability and willingness of large donors to fund these transformative initiatives). There have definitely been discrete steps up in TLYCS’s history, most recently last year when we had a major launch of the updated book, overhauled our website, and more than doubled both money moved and expenses. The investments paid off: this year expenses will be down slightly and money moved will be up a lot, so the multiplier will break out ... (read more)
For what it's worth – Giving What We Can also noticed a bump in pledges that came from The Life You Can Save book relaunch (and people specifying that is how they found out). There's often spill over like this that isn't directly tracked by the organisation doing the multiplying.
I think this depends on the particulars of the charities. Your donations might only impact them through whether or not they go to an extra region, which might happen only at funding thresholds. Many of their impacts are also random, e.g. most bednets don't save lives, and most deworming pills are used on children without worms.
What you seem to be describing is risk-aversion,... (read more)