Edit: A previous version of this post contained significant errors, which was pointed out in the comments. I mark and correct them in this version, but I believe my point is largely unaffected.
I originally wanted to write a comment to the forum post CEA Disambiguation, which contains further context, but I believe this warrants its own post.
The Effective Ventures Foundation (formerly known as CEA) (I'll call them EVF) runs many projects, including 80.000 hours, Giving What We Can, Longview Philanthropy, EA Funds, and the Centre for Effective Altruism (CEA), which in turn seems to run this forum.
It is very strange to learn that these organizations are not independent from each other, and the EVF board can exert influence over each of them. I believe this structure was set up so the EVF board has central control over EA strategy.
Edit: I now believe that this structure was set up to share resources like ops and oversight. It's not clear to me that this is the correct choice. I do not believe that 80k, GWWC , EA Funds and CEA are sufficiently protected from interference or legal risks.
I think this is very bad. EVF can not be trusted to unbiasedly serve the EA community as a whole, it misleads donors, and it exposes effective altruism to unnecessary risks of contagion.
An example (misleading donors):
As "Giving What We Can", EVF currently recommends donations to a number of funds that are run by EVF:
- Longview Philanthropy: Longtermism Fund
- several Funds run by Effective Altruism Funds
Through the "EA Funds Longterm Future Fund", EVF has repeatedly paid out grants to itself, for example in July 2021 it paid itself $177,000 for its project "Centre for the Governance of AI".
Another example (biased advertising):
On https://www.effectivealtruism.org/, which serves as an introduction to EA, the EVF links to its own project 80000hours, but not to the competing Probably Good.In both examples, the obvious conflicts of interest are stated nowhere. Edit: On GWWC's page, The conflict of interest is stated somewhere, but I missed it when quickly looking for it.
What should we do?
I have not thought hard about this, but I have come up with a few obvious-sounding ideas. Please leave your thoughts in the comments!
This is what I think we should do:
- I think we should break up the EVF into independent projects, especially those that direct or receive funding. Until that happens, we should conceive of EVF as a single entity.
- We need to push for more transparency. EVF's "EA Funds"-branded funds publicly disclose their spending, which is commendable! EVF's "Longview Longtermism Fund" does not. (Edit: The Fund had previously credibly committed to releasing a spending report, which I missed)
- Funds should definitely disclose their conflicts of interest.
- We should champion community-run organizations like EA Germany e.V. or the Czech EA Association, and let them step into their natural role of representing the community. GWWC members should demand control over their institution.
- We should continue the debate about EA's governance norms. In order to de-risk the community and to represent our values, we should establish democratic, transparent and fair governance on all levels, including local groups.
- We probably should rethink supporting community leaders that consolidate their power instead of distributing it.
DFTBA,
Ludwig
PS: the same consideration applies for effektiveraltruismus.de, which is run by an EA donation platform, and not by EA Germany. (Edit: The page has now been transferred. Thanks!)
Hi Ludwig, thanks for raising some of these issues around governance. I work on the research team at Giving What We Can, and I’m responding here specifically to the claims relating to our work. There are a few factual errors in your post, and other areas I’d like to add additional context on. I’ll touch on:
#1 Recommendations
With respect to our recommendations: They are determined by our inclusion criteria which we regularly link to (for example, on our recommended charities page and on every charity page). As outlined in our inclusion criteria, we rely on our trusted evaluators to determine our giving recommendations. Longview Philanthropy and EA Funds are two of the five trusted evaluators we relied on this giving season. We explicitly outline our conflict of interests with both organisations in our trusted evaluators page.
We want to provide the best possible giving recommendations ... (read more)
Hello Michael,
thanks for the thorough reply! I apologize for not contacting you for comment before publishing this post.
You're right, GWWC mentions conflicts of interest on the other page. Sorry for overlooking that and misrepresenting the facts. I don't believe the organizations actively hide their relationship. I'd like to see it mentioned more prominently anyways.
I'm looking forward to the Longtermism Fund's report, glad to hear that it's coming!
On governance/independence: I don't believe GWWC is currently facing significant pressures to act against the best interest of the community, but I'm not convinced it's well-enough protected for that to stay the case.
Overall, your answer makes me trust GWWC and EVF a fair bit more!
Really appreciated this comment. Several valuable updates for me here.
Not claiming it's your responsibility to do this, but if one thing that came out of this was EV writing more publicly about its governance structures, including this "active trustee" structure, that seems like a pretty great outcome to me.
Regarding independence of GWWC: employees working in e.g. CEA have no influence over the hiring in GWWC, and vice versa; but ultimately all sub-orgs are accountable, including in hiring decisions, to the same 5-person board of trustees. Is that correct?
Regarding recommendations: correct me if I'm wrong, but as I understand your description (and from a brief look at the recommendations page), the conflict of interest is not disclosed on the recommendations page, but rather somewhere else on the site that's not straightforwardly visible when looking at the recommendations. Why should this be the case?
- What are the main sources of your funding?
- Per our transparency page we are "funded through a combination of direct donations from members and other individuals, as well as grants from philanthropic foundations. So far our largest funders have been Open Philanthropy and the Future Fund."
- Would you consider making the main sources public, subject to their being willing (as eg Vox Future Perfect does), and if not, why not?
- Yes, they are public on our transparency page and FAQ
- What barriers would there be to receiving some or all operational support as a service from a legally unconnected org?
- The main service we receive is finance support (reconciling donations, selling shares that are donated, regranting to other organisations etc). We could contract some of that (e.g. bookkeeping) but because we are the same legal entity it makes sense to be done together. If we were to spin off (become a different legal entity) we'd need to set up a new charity in both the UK and USA (not a small feat) cancel and restart all recurring donations and bequests etc (which we're bound to lose people – especially bequests could be risky), transfer all contacts (huge privacy considerations) and IP, and do a l
... (read more)I think some of this post's criticisms have bite: for example, I agree that EVF suborgs are at significant risk of falling prey to conflicts of interest, especially given the relatively low level of transparency at many of these suborgs, and that EVF should have explicit mechanisms for avoiding this.
However, I think this post largely fails to engage with the reasons so many suborgs have federated with EVF. Based on my experience[1], members of many of these suborgs genuinely consider themselves separate orgs, and form part of EVF mainly because this allows them to be supported by EVF's very well-oiled ops machine. This makes it significantly easier for new EA projects to spin up quickly, while offering high-quality HR and other support to their employees. This is a pretty exciting proposal for any new EA project that doesn't place a high value on being legally independent.
"Breaking up" EVF could thus be very costly from an impact perspective, insofar as it makes the component orgs less effective (which seems likely to me) and necessitates lots of duplication of ops effort. You might argue that it's worth it for the transparency benefits, but I'd want to see serious engagement with ... (read more)
The one that doesn't sit well with me is EA Funds. I don't like the idea of EVF, which already has a significant influence over what gets funded in general, also having legal control and at least indirect influence over what gets funded with monies contributed by EA Funds donors. (Yes, I realize that many of the fund managers have ties to other big organizations, but at least an independent board would have the ability and power to monitor.)
I do think the greater awareness & discussion of EVF's structure and activities is one of the more positive things to come out of the Wytham Abbey discussion. It is indeed pretty weird, even if that weirdness came about for reasonable reasons.
Another conflict-of-interest vector is that EVF board members could influence funding to EVF sub-orgs via other positions they hold, e.g. Open Phil (where Claire Zabel works as a senior program officer) funds CEA (a sub-org of EVF, where Claire is a board member).
I'm hesitant about this angle. It seems to be reasonably common for major funders to get a seat on the board of nonprofits they fund, in order to give them more influence. (There was some good discussion of this elsewhere on the Forum recently, but I can't find it right now.)
I disagree with "effective" as an abstract property of an org. To me, if I think an org is effective and worth supporting/giving a large grant to, I want to support it in being MORE effective and to help it improve. Being on the board is plausibly a good way to do that (assuming that I have good judgment and perspective, obviously, which I hope senior grantmakers do!). There are obvious critiques of this, but I think that the core idea has substance and isn't just being self serving
My understanding from running the RP special projects program is you basically cannot offer anything helpful with regard to HR, legal, and finance without being one legal entity. RP special projects (such as Epoch) are thus legally the same as RP though maintain strong independence (via norms instead of laws).
It depends a lot on what you want from your service.
If you want to talk with lawyers, you obviously can get third-party services rather than hire your own in-house counsel. If you want to go over your books with an accountant, you can get third-party accountants to do that.
But if you prefer to just focus on the things you are good at and want everything handled for you so that you don't even have to worry about talking with accountants and lawyers and figuring all that out, that's where things like RP Special Projects and Effective Ventures come in.
And that's what can't be handled without the legal incorporation.
This kind of service we're trying to offer where you just don't even need to think about HR, payroll, legal compliance, finance, getting and having your own US 501c3 status, etc. is what I'm offering, but unfortunately no amount of money could ever make that service work without the legal incorporation.
So the net annual cost of overcoming those barriers are whatever it would cost for all the organizations in question to just furnish all of these HR+legal+finance services themselves and not make use of RP or EV at all. You would find your own COO / Director of Operations, hi... (read more)
The problem is laws.
You legally can't just rent/borrow a 501c3 status from a third-party... you have to be legally a part of the org with the 501c3 status to also have that status (though of course the org can give you credible promises of independence, as RP does).
Same goes for directly handling books and directly administering payroll. There certainly are third-party services that help a lot with books and payroll (e.g., Quickbooks, Sage, JazzHR, Remote... RP uses those) but they can't handle your books and payroll 100% entirely on your behalf without being legally responsible for them.
Speaking for the US:
My understanding is that books and payroll/finance can in fact be outsourced, and this is common practice. In the US, there are charitable accounting services (like Jitasa) that do all books and file most/all required financial filings for charities (this still requires some work on the charity’s end). There are PEOs (like JustWorks and Insperity) that in some cases run all of HR (and are legally responsible for it). To my understanding PEOs can be used with charitable organizations.
I think there may be some efficiency gains from centralization, like covering fixed costs (such as ~$10,000/year to pay a legal firm to register to fundraise in all US states) but they’re small or insignificant when you reach a multimillion-dollar scale. I’d imagine the all-in gains in avoiding fixed costs to be in the low tens of thousands of dollars.
At a larger scale, becoming independent could even be a cost savings! Administering lots of tiny projects can be operationally burdensome for a fiscal sponsor. There are also benefits of being independent, like being able to use your own operational processes, having a separate legal existence, etc.
That’s why fiscal sponsorship services... (read more)
Right. But OpenPhil doesn't administer Good Ventures books, OpenPhil doesn't ensure Good Ventures is compliant with relevant laws, OpenPhil doesn't hire/employ Good Ventures staff, and OpenPhil doesn't administer Good Ventures's payroll, and OpenPhil doesn't operate or provide Good Ventures's a "private foundation" or "LLC" status.
So while what you're describing is definitely a viable (if not complex) arrangement, it is not similar to the kind of arrangement I'm aiming to describe.
Similarly, RP can and does offer services (e.g., research consulting, running an event, administering a fund) on behalf of another org without legally absorbing that org, but the kind of fiscal sponsorship I'm describing that RP and Effective Ventures does require legally absorbing the org (while still credibly promising independence).
I think I should aim to be clearer that I definitely do think it will often be the right choice for an org to not seek fiscal sponsorship (or to eventually spin off from fiscal sponsorship) and become its own org with its own 501c3 status and its own board and its own books and its own payroll, but I think there are also a bunch of projects where all that overhead doesn't make sense (yet) and so fiscal sponsorship is the right play.
Thanks Ludwig for raising the conversation around governance. It's something that is important to me and we're exploring how we can improve on this (and will share later any changes we plan to make). Michael has just left another comment which covers most of what I'd say right now so I don't have much more to add other than:
1. I'd to flag that I don't believe this comment is accurate, and seems very uncharitable:
CEA was setup before there was [added:much of] an EA movement (the term "effective altruism" was invented while setting up CEA to support GWWC/80,000 Hours). In recent years, several organisations have approached EVF so they can receive the same kind of operational and legal support. Some of these organisations have met EVF's bar for impact and thus been supported, and I'm aware some are in the process of spinning out of EVF after receiving initial support getting started.
2. In my experience leading GWWC for the past 2.5 years the EVF trustees have never "exerted influence" over our strategy.
During this time I have received helpful input from trustees (mostly working with Toby as our a... (read more)
On the suborgs not getting enough attention: I don't know UK corporate law, but at least in my home jurisdiction, I believe non-profit boards can create committees of the board that can (1) include non-members, yet (2) exercise most of the full board's powers to the extent delegated by the full board, as long as (3) a majority of the committee members are board members. So, at least where I live, EVF could establish a five-person committee for each suborg: three Board members + two non-Board members who are unique to that suborg. That committee could perform the bulk of board functions for the suborgs, and each suborg would gain two new board-type people to pay attention to it whose energies were not spread out among all the suborgs. That should give some of the advantages of each suborg having its "own" board without actually messing with the legal structure.
I guess the low-hanging fruit is that a five-person board is probably too small for an organization like EVF, and should probably expand to nine (or at least seven) over time.
Hello,
Thanks for your work and this reply.
1. Yes, seems like an unsupported belief I had. I added a pointer to your comments to the beginning of the post. At the very least, the board continues to uphold their influence over the community and EVF suborgs.
2. That's great to hear! I did not expect them to use their power, but they clearly are able to, if they wanted to.
3. In my view, if GWWC wants to be a community organization, it should be controlled by the community. From a governance perspective, GWWC is as much a community as IKEA's members program. Of course, the GWWC community exists socially, but it does not empower members to shape the organization.
This comment makes me feel like we're living on different planets.
The quote above (emphasis mine) reads like a strawman; I don't think Michael would say that they always make the right call. My personal view is that individuals steering GWWC will mostly make the right decisions and downside risks are small enough not to warrant costly governance interventions.
To be clear, the point isn't to act in the community's favor, the point is acting in a way that benefits the good. (It's possible this is what you actually mean and I'm misunderstanding).
That's true, but before the brand "Effective Altruism" existed, there was no reason why starting an organisation using that name should have made the founders beholden to the will of every single participant in this community - you'd need to conjecture a pretty unreasonable amount of foresight and scheming to think that even back then the founders were trying to structure these orgs in a manner designed to maintain central control over the movement.
If you or me or anyone else wanted to start our own organisation under a new brand with similar goals to CEA or GWWC I don't think anyone would try to stop us!
Hi — I think this post overstates the level of program-level centralisation here.
The EVF and CEA US boards provide overall oversight and governance of the projects and their executive directors, and will occasionally step in to change something important. But they have largely delegated program-level responsibility to each project’s executive director, who each set their own strategy for how to best have a positive impact on the world.
In practice, those strategies do differ: to give a couple of examples, CEA and 80,000 Hours have pretty different approaches to cause prioritisation; while Asterisk (a CEA US project) published a very critical review of What We Owe the Future (a book written by an EVF project lead and board member). The boards also very much want EA work to flourish outside of the EVF and CEA US governance structures — many of the grants made by the EA Infrastructure Fund support this work.
This is, alas, false.
Even for the subset of EA Funds spending that is public[1], 3/4 funds (1,2,3) haven't published a grant report for roughly the past year. ETA: This is incorrect/misleading. EA Funds isn't publishing grant reports anymore because they now have a public grant database. I support this change and regret the error.ETA: The potential for conflicts of interest with intra-EVF grantmaking isn't a problem I'd previously thought about here, but seems like an additional reason why EA Funds should not be making secret grants (or at least, why it should commit to not making secret grants within EVF).
I believe the exact proportion that is public vs secret has not been disclosed, though would be happy to learn I was wrong about that.
I take a more middling approach -- I don't think incompletely disclosed funding is bad per se, but it needs some clear and published guardrails, such as:
(1) This isn't the CIA budget; one should be able to share some information (even: "mental health support for an individual EA -- $5,000"). For instance, for an applicant who is concerned about future job prospects, it should usually be possible to release most of the typical information other than the grantee's name or other potentially identifying information.
(2) I get the need for sometimes using more relaxed conflict-of-interest standards in a smaller community, but the standards should be considerably tighter in evaluating an grant with an undisclosed recipient.
(3) At a certain dollar amount, there needs to be an explicit finding that either (1) enough information can be disclosed to adequately achieve the goals of transparency and accountability; or (2) the reasons for the grant are compelling enough to justify the transparency/accountability costs. In other words, past that dollar amount, there should be an explicit recognition that the bar is higher for minimal-disclosure funding than it is for disclosed funding. That... (read more)
With regards to effektiveraltruismus.de: The site has just been transferred to "Effektiver Altruismus Deutschland (EAD) e.V." (can be seen in the Imprint/Impressum already and will be mentioned in a newsletter that we will probably send later today). Donations will still be managed by Effektiv Spenden (officially knows as "UES – Gemeinnützige GmbH für effektives Spenden") since EAD can't do that at the moment (from a legal perspective and also from a technical/operations perspective). We already mention who is handling the donations on top of the donation... (read more)
I'd like to bring up a further question: What would happen to 80000hours' budget if CEA were to go bankrupt? What would happen to donated money being held by EVF through EA Funds?
Setting up your own legal entity is a lot of work. When we where setting up AI Safety Support I was surprised that we could not find anyone to offer EVF-type services to us. After we got our legal stuff set up, AI Safety Support is not offering this service to other orgs.
Asking that every org is it's own legal entity is very costly and also would not solve any of the problems around power centralisation. I think this post is brining up a good point.
... (read more)I'm very thankful for EVF and associated orgs, and as referenced by others, it's understandable how/why the community is currently organized this way. Eventually, depending on growth and other factors, it'll probably make sense for the various subs to legally spin off, but I'm not sure if this is high priority - it depends on just how worried EAs are about governance in the wake of this past month.
I will say, conflict of interest disclosures are important but seems like they may be doing a lot of work here. As far as I can tell[1], leadership w... (read more)
Who sits on the board of the Effective Ventures Foundation?
(Typo)
In your link here:
The comma is included, which makes the page go to an error site.
DFTBA :)