Let's say you're going to donate some money, and plan to put some time into figuring out the best place to donate. The more time you put into your decision the better it's likely to be, but at some point you need to stop looking and actually make the donation. The more you're donating the longer it makes sense to go, since it's more valuable to better direct a larger amount of money. Can you get the benefits of the deeper research without increasing time spent on research? Weirdly, you can! About five years ago, Carl Schulman proposed (and ran the first) "donor lottery".

Say instead of donating $1k, you get together with 100 other people and you each put in $1k. You select one of the people at random (1:100) to choose where the pool ($100k) goes. This turns your 100% chance of directing $1k into a 1% chance of directing $100k. The goal is to make research more efficient:

  • If you win, you're working with enough money that it's worth it for you to put serious time into figuring out your best donation option.

  • If you lose, you don't need to put any time into determining where your money should go.

This isn't that different from giving your money to GiveWell or similar to decide how to distribute, in that it's delegating the decision to someone who can put in more research. Except that it doesn't require identifying someone better at allocating funds than you are, it just requires that you would:

  • Make better decisions in allocating $100k than $1k

  • Prefer a 1% chance of a well-allocated $100k to a 100% chance of a somewhat less well-allocated $1k.

If you come at this from a theoretical perspective this can seem really neat: better considered donations, more efficient use of research time, strictly better, literally no downsides, why would you not do this?

Despite basically agreeing with all of the above, however, I've not participated in a donor lottery, and I think they're likely slightly negative on balance. There actually are downsides, just not in areas that the logic above considers.

The biggest downside is that it makes your donation decisions less legible: it's harder for people to understand what you're doing and why. Lets say you're talking to a friend:

Friend: You're really into charity stuff, right? Where did you decide to donate this year?

You: I put my money into a donor lottery. I traded my $10k for a 1% chance of donating $1M.

Friend: Did you win?

You: No, but I'm glad I did it! Let me explain why...

There are a few different ways this could go. Your friend could:

  1. Listen to your explanation at length, and think "this is really cool, more efficient donation allocation, I bet EA is full of great ideas like this, I should learn more!"

  2. Listen to your explanation at length, and think "maybe this works, but it seems like it could probably go wrong somehow."

  3. Not have time or interest for the full explanation, and be left thinking you irresponsibly gambled away your annual donation.

I think (b) and (c) are going to happen often enough to outweigh both the benefit (a) and the benefit of the additional research. And this is in some sense a best case: your friend thinks well of you and is likely to give you the benefit of the doubt. The same conversation with someone you know less well or who doesn't have the same baseline assumption that you're an honest and principled person trying to do the right thing would likely go very poorly.

The other problem with that conversation is that you're not really answering the question! They're trying to figure out where they should donate, and are looking for your advice. Even if they come away thinking your decision to participate in the lottery makes some sense, they're unlikely to decide to participate the first time they hear about the idea, and so do still need to decide where to give. It's much better if you can explain what charity you picked, how you were thinking about it, and be able to answer followups. Importantly, I think this is better than explaining the donor lottery at illustrating EA thinking and helping people figure out if learning more about EA is something they'd enjoy.

I also have two smaller objections to donor lotteries:

  • If with some research you have a good chance of identifying better donation opportunities than "give to GiveWell or EA Funds", I'd be excited for you to do that and write up your results. I think you'd likely influence other funders enough that the time investment would be worth it, and you'd learn a lot. If this goes well you get the benefit of winning a donor lottery without having to actually win!

  • When I was earning to give I was in a position similar to someone who had won a donor lottery, in that I had enough money to allocate that it would be worth putting in substantial time deciding what to do with it. But in practice I didn't end up putting in that much time, the time I did put in didn't shift my views, and I ended up donating to the same places I expect I would have if I'd been donating much less money.

(I think the tradeoffs were less against donor lotteries in 2016 when they were first proposed, because there were many fewer people working full time on how to allocate EA money.)

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this sounds like it hinges on calling it a lottery and explaining just enough to a friend to cause problems rather than a pithier summary or a longer discussion.

Over on FB I asked Jeff to quantify his estimates and he very kindly said

so I think the arguments about legibility and influencing others are kind of a red herring, Jeff just doesn't think donor lotteries create much value.

How big do you think the effects are?

(Before writing this I thought most people thought the benefits of the additional consideration were relatively low, but it was still worth doing because the downsides were also low?)

Depends on who wins. I know at least one person who won the lottery and then planned to donate to LTFF, which I thought was a total waste and if that was what they were going to do they should have donated to LTFF in the first place. But I think Timothy TL's uses were plausibly 10x EV what would have happened otherwise, even if one of them ultimately had little impact and the other I don't know anything about.  Admittedly that was back when funding was scarcer and there were no regranting programs, but I don't think those have 100% covered everyone who could direct medium sized amounts usefully.

I should note I don't participate in donor lotteries, for reasons not covered here. I definitely don't think everyone should do them. But I do think there's a place for them.

Okay, but what's your estimate for the expected value across potential winners in today's environment?

If the expected value is high, then I think it's a big loss that almost all of these people who could be improving funding allocation will instead lose the lottery.

which I thought was a total waste and if that was what they were going to do they should have donated to LTFF in the first place

I don't understand what was wasted. Do you estimate the costs of running the lottery to be significant?

I don't think there are any extra financial transactions, if you would donate from the same platform in both the lottery and non-lottery cases. (In both cases you donate to EA funds / GWWC, and they then donate it to the org, so 2 transactions)

You: My initial thoughts were Charity X or Y, for maybe-naive reasons x and y. I ended up going with Z instead because Person P thought it was better. [If P described any reasoning you may summarize it here]. My reasons for going with P's decision are complicated and weird and not very applicable to your own choice of charity; if you've got a bunch of time we can discuss those, but otherwise it's not worth it IMO.

If you're a hardcore donor lottery person, losing and having the winner donate it all to a charity you think is harmful is still fine. P could be seriously embarrassing to be associated with!

In theory, yes, but I don't think it has ever happened in practice.

It has happened that you never find out P because the winner doesn't reveal their recommendations, though