EA - The case for transparent spending by Jeroen W

Link to original articleWelcome 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 case for transparent spending, published by Jeroen W on December 15, 2022 on The Effective Altruism Forum.ContextRecently, the purchase of Wytham Abbey came in the spotlight: The purchase by Effective Ventures of a (15 million pound?) manor house. On Twitter and on the forum, people have held extensive discussions on whether the expense was justified. I personally was very surprised, which is why I made a forum post requesting an explanation. (Currently, I’m still slightly sceptical but I’m happy I now understand the reasoning behind it a lot better.)Because of the purchase, the idea that Effective Ventures/CEA should be more transparent about large expenses has been brought up more often. I agree with that idea, and try to defend it here.I added footnotes/links when I have a source for the (counter) argument. They may have been made regarding a different formulation of my proposal or a slightly different proposal, but are nonetheless worth mentioning. I sometimes rewrote arguments and may have misunderstood their original meaning, so don’t interpret my rewritings as the original authors’ intentions. I just want to credit where I got the ideas from. I have no experience at all with funding projects, so there might be practical things I’ve overlooked.My proposalAll spending above a certain threshold by EA organisations should be publicly explainedThe threshold should be high enough so it doesn’t take away too much time from grantmakers/employees (ex. $500k, 1 million pounds)The more concerned people might be about the expense, or the more influential the expense is, the more time and effort should be put into the explanationThe public explanation should be some kind of cost-benefit analysis and clearly state the reasons for the purchase including positives, potential negatives and counterfactuals in layman's terms. Precise numbers are admirable but not always necessary. “Worst case” and “best case” scenarios with some kind of probability distribution might be helpful.The explanations should be published within a reasonable timeframe (ex. within a month after the purchase/grant is made, every quarter,...). This timeframe should be made clear so that people can expect when to get an explanation of something. The sooner after the purchase, the better.The EA organisations could be: Effective Ventures and the organisations that fall under it (CEA, 80,000 Hours, Forethought Foundation, EA Funds, Giving What We Can, The Centre for the Governance of AI, Longview Philanthropy, asterisk, non-trivial, BlueDot Impact), Open Philanthropy, GiveWell, Animal Charity Evaluators,... I think the case is the strongest for Effective Ventures and CEA since they represent the EA movement, so they should be held to the highest standards.I haven’t reviewed every organisation. Some might already do a great job. For example, I get the impression that GiveWell and Open Philanthropy do a better job at explaining grants than EA Funds does (except for EAIF they often only use one sentence, even with million dollar grants).I’m highly confident some variation of my proposal should be done if the grant is made using individual/small donations, I think it’s reasonable to claim you owe explanations to your donors. The case is less strong when the donor of the grant is just one or two people (like with Wytham Abbey/Open Philanthropy), but I’m still quite confident it’s important in those cases too. You may not owe an explanation to individual/small donors, but rather to the EA community as a whole.Should this be some kind of official rule every EA organisation must follow? No, but I’d be happy to see some organisations (especially Effective Ventures/CEA) try it out. Different organisations can try different thresholds and use different rules for their public explanations.Similar propos...