Written to a new grantmaker.

Most value comes from finding/creating projects many times your bar, rather than discriminating between opportunities around your bar. If you find/create a new opportunity to donate $1M at 10x your bar (and cause it to get $1M, which would otherwise be donated to a 1x thing), you generate $9M of value (at your bar).^[1] If you cause a $1M at 1.5x opportunity to get funded or a $1M at 0.5x opportunity to not get funded, you generate $500K of value. The former is 18 times as good.
- You should probably be like I do research to figure out what projects should exist, then make them exist rather than I evaluate the applications that come to me. That said, most great ideas come from your network, not from your personal brainstorming.
- In some buckets, the low-hanging fruit will be plucked. In others, nobody's on the ball and amazing opportunities get dropped. If you're working in a high-value bucket where nobody's on the ball, tons of alpha is on the table. (Assuming enough donors or grantmakers will listen to you to fund your best stuff.)
- I talk about "10x opportunities" and "1x opportunities" for simplicity here. It might be better to focus on goodness. Like: our bar is one unit of value per dollar. An opportunity to generate 10M units for $1M is exciting: it creates a surplus of 9M units. In "10x" mindset, it's twice as good to spend $2M at 10x as to spend $1M at 10x. That's true but that framing can mislead you into thinking like the goal is spending money rather than the goal is generating goodness.
- (Money is not a monolith. Some kinds of money/donors are much better than others, per dollar. For example, often your marginal opportunities for flexible/savvy donors are better than those for donors who are not open to weird stuff or have random constraints. And tax considerations make money for nonprofits cheaper than other kinds of money. You should have different bars for different kinds of money/donors.)
Adverse selection is extremely important.
- Mostly this is winner's curse and a related phenomenon.
- - Winner's curse is: if you think X is better than your peers do, that's evidence that X is not as good as you think. Could opportunities like X get funded without you? If so, then the worlds where you're counterfactual for funding X are just the worlds where nobody else wanted to fund X. Insofar as the others might have information that you don't,

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Julian Hazell

Julian Hazell

Julian Hazell

Julian Hazell