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: EA is a Career Endpoint, published by AllAmericanBreakfast on the AI Alignment Forum.
The EA movement has a lot of money. Why is it so hard to launch good projects?
We can shed light on this by comparing EA grantmakers with for-profit firms. They have a list of investment projects. Each offers an expected rate of return: in dollars for for-profit firms, and in altruistic utilons for EA funders. Firms and EA Funders will invest their capital in projects offering return superior to the hurdle rate or cost of capital.
The hurdle rate for a for-profit firm is the expected rate of return on an investment in the stock market. If the best investment project available offers a 9% rate of return, but the stock market offers a 10% rate of return, then the firm will not invest in the project. Instead, they should return it to shareholders as a dividend. Otherwise, they will underperform the market, and shareholders will sell the stock.
For EA funders, the investment decision is a little tricker.
First, they are constrained by their mission. For example, the mission of EA Infrastructure Fund reads, in part:
While the other three Funds support direct work on various causes, this Fund supports work that could multiply the impact of direct work, including projects that provide intellectual infrastructure for the effective altruism community, run events, disseminate information, or fundraise for effective charities.
Money is fungible. In theory, so are utilons. But if you donate to EA Infrastructure Fund, they are not going to use it to fund direct work, and they are not going to return it to you as a dividend if they can't find a use for it.
So they have to find mission-aligned projects. They could simply give out grants in descending order from highest-value/most-mission-aligned to least. This might result in throwing away cash on risky/low-value projects that aren't aligned with their mission. Past a certain point, that seems unwise.
So they need to set a hurdle rate, similar to the one that for-profit firms must consider. A minimum threshold of value, security (non-riskiness), and mission alignment. They need to set the bar and hold it firmly in place.
Determining where to set the bar is another challenge. If they set it too low, they'll throw away money. If they set it too high, they'll have money sitting around with nothing to do. This isn't necessarily bad, though. They can save it for the future, in hopes that more high-quality projects will appear later.
It might seem like they could just use that extra money to invest in developing more high-quality projects. Perhaps they could create a school or workshop to help low-quality projects turn into high-quality projects.
However, that in itself is a project. If they had a great idea for how to go about it, a strong team committed to the idea, and access to whatever outside resources they needed to make it a success, then it might be a high-quality project and surpass the investment bar. If not, though, they would reject that idea along with the rest. They money would sit around unspent.
What makes a project high-quality isn't just the idea itself. "A project to generate higher-quality EA projects" is the barest whisp of an idea. The concept needs to be much more specific, with a fairly detailed plan, a team of demonstrated excellence and clear ability to succeed fairly well organized and committed to it. That's not something you typically put together with one blog post.
So EA funders shouldn't lower the bar just because they can't find adequate outlets for their money right now. That would mean they never set a bar in the first place. There's also not an obvious way of finding more high-quality projects. Finally, there's no guarantee that the influx of wealth into the movement will last. Saving that money for the right opportu...
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