We started Effective Fundraising as an experiment in fundraising for the most effective charities We believed that testing this idea would be a good learning experience for both us personally and the effective altruism (EA) movement as a whole. We have run Effective Fundraising for 5 ½ months while publicly posting monthly updates and keeping detailed information about our progress and spending in our blog. This is our six month review of Effective Fundraising explaining our progress and our current stance on fundraising and grant-writing.
Our current stance on granting-writing
We have applied for three different types of grants: private foundation grants, government grants, and Google grants. We have sent out 33 applications and from this we got a fairly low response.
We got two Google Grants ($240,000 per year of online ads) which we are not including in our analysis because they are Google programs that can be acquired by any registered charity as long as they meet fairly basic requirements. As such they are not representative of grant writing and should be evaluated separately. We also secured a spot on Google’s new App, “One Today,” which provides people with a platform to donate $1 to any charity of their choice. This program was similar to Google grants in that one only needed to meet some fairly basic requirements. We won one grant that was worth $10,000 for THL which although not record in our charts currently we do count as a successful grant.
Aside from this, one foundation was interested but then did not come through, a few outright indicated their disinterest, and the vast majority never responded to our applications.
We have not got all the results back yet but currently feel confident in saying that grantwriting was not successful at raising as much money for top charities as we wanted. In fact, it was significantly less effective than we had anticipated. We have interviewed multiple professional grant-writing consultants and they said that you should expect a 20% success rate and some cited much higher rates. When we asked what their source was for this they said it was simply their experience. This evidence is not as rigorous as we would like but it was the best we could find.
There are many possible reasons for this result, which we will elaborate on below.
Three possible explanations for our relative lack of success.
Many foundations have a preference for charities and people they know personally. We and our charities had relatively few of these connections. This might have been a very large factor in our low grant application success rate.
Another possible explanation is us being inexperienced grantwriters, given that we got substantially better at grants (as noted by us personally and our volunteers) over time. It seems quite likely we would send in weaker grants than people with years of experience.
Grant readiness of charity
There are some reasons that the charities we chose were trickier to fundraise for than other possible charities. We discuss this in much more detail in this blog post.
The benefits of this experiment
Studies that show no effect are just as important as studies that show an effect, because they improve our knowledge about reality. As such, Effective Fundraising grant-writing was a successful experiment even though it was not successful in terms of direct impact.
Why admitting failure is crucial
We learned that being able to admit failure is a necessary and rare component to running an experiment or startup in nonprofits. We have worked for many organizations with many failed projects who have never admitted their failure, publicly or internally. This leads to a lot of wasted money as the nonprofit continues accepting donations while accomplishing little to nothing. The EA movement is very quick to point out that “regular” nonprofits do this, but in our experience EA organizations are no exception to this problem. We are one of the first EA organizations to publicly admit significant failed experiments (aside from GiveWell) but we are definitely not the first to have actually failed.
Part of why we think we are able to do so is because we took our psychology into account. One reason it’s hard to admit a failed experiment is because you may be uncertain or unhappy about your other options. In fact, most people don’t even have a Plan B. Effective Fundraising grants had a clear idea from the beginning what our Plan B was if the experiment didn’t work so that if it didn’t we knew we’d still be secure and happy.
Another method we used was transparent public commitments. We announced to multiple people in public forums that if after 20 applications or after one year we had not raised $50,000, we would stop grant-writing. Studies have shown time and again that if other people know about your goals, you’re more likely to follow through.
How this experience has changed our view on grant-writing
Although we feel our experiment was far from conclusive we are somewhat confident about the following beliefs:
Our current thoughts on fundraising in general
We think that our experiment gives some evidence that fundraising is less promising than it seemed before. However, since grant-writing is quite different from other fundraising methods we do not think it changes our prior much. We still think that it would be worth experimenting with different types of fundraising as we expect they could yield very different results. More explanation and possible plans for this can be found here.
Compiled update on grants sent
This is the full update of grants sent. In total we sent 25 applications and letters of inquiry; 8 exploratory letters; and got 2 Google Grants, and 1 One Today. Exploratory letters are like letters of inquiry but directed at foundations that state that they are not looking for applications. These might not seem very promising but we actually made most of our headway in this area.
Compiled information on budget
Our main cost was staff (about 90%) but because of our personal spending habits we were able to keep this very low ($500 each per month). The full nominal cost of the project was very low at $6200. Full spreadsheet details of our budget can be seen here.
How money was raised
We spent $2200 of our personal funds and received $4000 of donations that would have not otherwise gone to the charities we were fundraising for. These were the only donations we accepted. We spent very little time on personal fundraising but got many offers of donations via our website and personal connections. Thank you to all those who have offered funding support.
It has been mentioned that the largest cost of this experiment was not just the monetary cost, but the counterfactual cost of my and Xio’s time. It is hard to measure the value of one’s time as it depends largely on what they would have done otherwise. One way to get a rough lower bound for the counterfactual cost would be to estimate how much money we would have donated ourselves to the charities we were fundraising for if we had done earning to give.
Given our cost of living and current income earning potential we could have donated $25,000 if we had worked the 6 months we put into Effective Fundraising. This is part of why we set our yearly fundraising goal at $50,000 as this was how much we expected to collectively donate doing one year of earning to give. This puts the full cost of this 6 month experiment closer to $31,000 of which a majority would have gone to GiveWell recommended charities.
Compiled update on time-spent
We kept careful track of our hours to ensure we knew where all of our time was being spent. We found this personally useful, and it allowed us to see areas of improvement as well as let others see and understand where our hours went.
A public display of where the hours go in an organization is very informative and we strongly recommended it to anyone who wants to improve productivity and transparency. (We used Manic Time.)
Effective Fundraising will not be applying for grants in the near future but may continue to fundraising via different methodologies. We are still considering which fundraising methods we will use, and whether fundraising is stronger than our other options. As always, we would welcome any comments, advice, or feedback on this.
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