Before we created the Funds, we had begun to see increased interest in systems which helped donors pool their resources to give more effectively. Examples include [donor lotteries](http://effective-altruism.com/ea/14d/donor_lotteries_demonstration_and_faq/), and the [EA Giving Group donor-advised fund (DAF)](http://blog.givewell.org/2016/12/09/staff-members-personal-donations-giving-season-2016/). 

In addition, a sizable portion of the effective altruism community donates in accordance with expert recommendations. [GiveWell’s charity recommendations](http://www.givewell.org/charities/top-charities) move considerable amounts of money from donors who follow their recommendations. We were hearing from donors who wanted to get recommendations for a wider range of causes than charity evaluators could provide.

The Effective Altruism Funds meet both of these needs by allowing donors to pool their resources together, to be used for grantmaking by experts in a variety of areas.

Why did you create Effective Altruism Funds?

When thinking about how to donate most effectively there is some discussion about whether you should donate only to the one thing that you think on balance will do the most good or whether you should split your donation. When it comes to splitting between charities Effective Altruism Funds is attempting to solve this dilemma by pooling people's money and having an expert decide but what about choosing whether to donate 100% of your money to one cause area or split it across our funds?

On the one hand, if you think one cause area has the highest expected value (the amount of good that can be achieved multiplied by the probability of achieving that good) then there are strong arguments for only donating to that one area because you think that is where the highest positive impact can be achieved. [This article](http://reducing-suffering.org/why-maximize-expected-value/) goes into greater depth on expected value and why it's important.

On the other hand, as [this article explains](http://measuringshadowsblog.blogspot.com/2015/08/multiplicative-factors-in-games-and.html) it could be that different cause areas act as multipliers on each other meaning it is important to maximise all areas. For example, it could be important to both ensure the continuation of our species by focusing on the [Long-Term Future](https://app.effectivealtruism.org/funds/far-future) but also to make sure that future is favourable by improving the way [we treat animals](https://app.effectivealtruism.org/funds/animal-welfare).

As [this post points out](http://effective-altruism.com/ea/m3/how_we_can_make_it_easier_to_change_your_mind/) it may be important to donate at least a small amount to all the different cause areas as a way to reduce the biases we have to different cause areas perhaps because we identify with particular communities or identities (such as being vegan) or don't want to lose status associated with changing our minds.

How you think about these different arguments may affect how (and if) you split your donations between the different cause areas but it is an important area to think about before you donate.

Should I split my donation between the funds rather than donate only to the one I think is best in expectation?

There are many reasons donors might choose to donate elsewhere instead of to the Effective Altruism Funds. Here are a few examples:

### They have inside information on promising opportunities

Donors may think that their donations will have a higher expected value than donations made through the Fund if they think they have better information than Fund managers in specific cases. For example, a donor might have inside information on a particular cause or organization, or an unusually strong personal network, such that their knowledge and access to expertise would provide them with an advantage.

### Their preferred opportunities aren't available

Donors might not want to donate through EA Funds if opportunities they wish to support are not represented by the current Funds. For example, there could be no Fund for the cause area they are focusing on, or their values could differ enough from those of the Fund managers that the Funds' donations might not represent their values. For example, donors with strong views on the value of saving lives versus the value of improving lives may choose to allocate their donations directly to charities that work in one area or the other.

### They prefer to donate through a non-EA-Funds mechanism

Behind the scenes, the structure of EA Funds operates similarly to a [donor-advised fund](https://en.wikipedia.org/wiki/Donor-advised_fund) (DAF) with the Effective Ventures Foundation (EVF) operating as the DAF. While this setup has a number of advantages, it also requires placing trust in EA Funds to donate the funds as intended. In addition, there may be unexpected edge cases that would require EA Funds' discretion to resolve. Donors that are not comfortable with this level of trust in EA Funds should consider donating through another mechanism.


Why might some people choose not to donate to Effective Altruism Funds?

We are a 501(c)(3) tax-exempt organization in the United States and a registered charity in England and Wales. This means that we can provide all of the tax benefits of a donor-advised fund without the associated fees. We can also use our infrastructure to negotiate for lower fees in processing donations and to create a more seamless user experience.


Why do donations to EA Funds go to Effective Ventures and not a separate donor-advised fund (DAF)?

You get all the tax benefits you would with a DAF, but with lower fees. DAF fees can range between [0.35% and 2% of your donations](https://www.philanthropy.com/article/What-Donor-Advised-Funds/156495), whereas the EA Funds will not charge any management fees. To donate to a DAF, you also need to contribute a minimum of $5,000. There is no minimum donation to EA Funds, although we recommend a minimum of $20 (since credit card companies often deduct a fixed fee, which can dilute the impact of small donations).

Our Funds also benefit from the expertise of fund managers. who work to ensure that money goes toward high-impact opportunities. Using your own DAF, you would need to consult similar experts or conduct your own charity research.


How are Effective Altruism Funds different from donor-advised funds (DAF)?

We think some donors will find that Effective Altruism Funds is the highest-impact donation option available to them for one or more of the following reasons:

__1\. Comparative advantage__

To make an effective donation, individual donors must spend significant time answering all of the following questions:

1. Which problem areas are most important?
2. Which interventions are likely to make progress in solving those problems?
3. Which charities executing those interventions are most effective?
4. Which charities have a funding gap that is unlikely to be filled elsewhere?

Time spent answering these questions takes away time from activities that are likely to be comparatively advantaged for most individual donors, such as earning money to donate or improving their skills for the future. 

However, answering these questions *is* the comparative advantage of our Fund managers. The Funds are managed by experts who spend a large proportion of their working time - sometimes even all of it - thinking about how to allocate money to achieve the most good. 

These experts also have strong networks of contacts throughout key communities (effective altruism, global health, animal advocacy, etc.), which is highly valuable in identifying and evaluating new opportunities.

__2\. Due diligence__

Many of the most promising opportunities for impact involve taking risks; a project with a high expected value might still end up having little to no impact, or even causing harm. The managers at each Fund, as well as operations staff at the Effective Ventures Foundation, make use of their knowledge and experience to assess projects and identify risks.

__3\. Coordinate funding for new opportunities__

If a promising new organization needs a certain amount of funding to get off the ground, they may struggle to do so by attracting many small donations; it's unlikely that many individual donors will all conduct enough research to feel comfortable supporting an organization without a strong track record.

Our funds allow individual donors to pool their money together and have it allocated by experts who *do* have the necessary time and background to research and evaluate new organizations and projects.

__4\. Save charities' time__

Providing information to donors often takes up large amounts of time for charities' senior management, especially at smaller organizations. While there are benefits to these interactions, they can easily become excessively costly. By communicating with charities on behalf of many donors, our funds can reduce these costs.

__5\. Support the spread of information__

The funds don't just make grants: they also publish information about the individuals and organizations they've chosen to support, explaining the reasoning behind their grants. This information may prove useful to other individual donors or grantmaking organizations.

Why not just donate to individual charities?

### Benefit from expertise
Each of our Funds focuses on a set of problems that are important, tractable, and neglected. They’re managed by experts in their respective fields. 

### Get lower fees
We use automation to keep our running costs low, and we don’t charge any fees for using the Funds. The only fees are those applied by payment processors, and we’ve negotiated for lower processing fees so that more of your donation goes directly to charity.

### Play to your comparative advantage
Our Fund managers spend thousands of hours a year thinking and learning about how to use money to do the most good. Donating to Effective Altruism Funds allows you to take advantage of their work instead of trying to replicate it yourself. 

### Be part of a community
We are building a community of people focused on effectiveness and eager to solve the world’s most pressing problems. By joining the community and pooling our donations, we can coordinate more effectively.

### High-leverage opportunities
By pooling our resources, we can also fund certain high-leverage opportunities that are only possible with larger sums of money. For example, we can fund early-stage charities that might need substantial support to get off the ground, or even encourage the creation of new charities by showing that money will be available to fund them. Together, we can have a greater impact than we could as individuals. 

### Help to measure movement growth
When more people donate to EA Funds, or use the platform to support individual charities, it helps EA Funds keep track of the movement's growth and priorities. Understanding the spread of effective altruism by requesting information from dozens of charities would be very difficult; a centralized donation platform makes this much easier. 


Why donate to Effective Altruism Funds?

Effective Altruism Funds was conceived by staff at the [Centre for Effective Altruism](https://www.centreforeffectivealtruism.org/) (CEA). It was inspired by [the donor lottery run by Carl Shulman and Paul Christiano](http://effective-altruism.com/ea/14d/donor_lotteries_demonstration_and_faq/) and by [Nick Beckstead’s EA Giving Group donor-advised fund](http://blog.givewell.org/2016/12/09/staff-members-personal-donations-giving-season-2016/) (DAF). 

The project was further developed while CEA staff were taking part in [Y Combinator’s](https://www.ycombinator.com/about/) three month start-up incubation program, where we received advice from successful entrepreneurs on building useful products for the effective altruism community.

At the end of 2020, Effective Altruism Funds began to [operate independently of CEA](https://www.centreforeffectivealtruism.org/blog/giving-what-we-can-and-ea-funds-now-operate-independently-of-cea/), and is now a separate project though both EA Funds and CEA are part of the [Effective Ventures Foundation](https://ev.org/).

What is the history of Effective Altruism Funds?

Effective Altruism Funds help you give effectively and efficiently. They currently consist of four Funds which cover a set of problems that are [important, tractable, and neglected](https://concepts.effectivealtruism.org/concepts/importance-neglectedness-tractability/). They are managed by experts in the field who pool the community's donations and research high-value donation opportunities.

[You can make a donation here.](https://app.effectivealtruism.org/donations/new)

