Our Grantmaking So Far: Approach and Process

We’ve written previously about our approach to choosing focus areas for the Open Philanthropy Project, and we’ve described the advantages that working within causes (as opposed to being open to making grants in any area at any time) has for grantmaking. To date, however, we haven’t said much about our grantmaking process itself.

As part of my role at Open Philanthropy, I manage the logistics and overall process of how we make grants. In this post, I’ll describe the approach we use to grantmaking within our focus areas, and outline our current process for deciding whether or not to make a particular grant.

For our first couple of years, grantmaking has not been the top priority for the Open Philanthropy Project; so far we have focused most highly on selecting cause areas and building internal capacity (see our most recent update and this blog post for more on how we’re thinking about balancing these with grantmaking). As such, the approach and process outlined in this post are both fairly preliminary — we expect them to change and mature somewhat as we gain more experience as a grantmaking organization.

This post describes:

• Our approach to making grants
• The decision process we use for individual grants
• Similarities to and differences from other foundations
• Some of the tradeoffs involved

March 2017 update: Since this blog post was published, our process has largely stayed the same, but we wanted to note a few changes:

• 50/40/10 rule: In keeping with the philosophy described below, we believe that the best way for us to make outstanding grants is to build trust with program officers who are experts in each area we work in, and rely heavily on their judgment in their own area. The “50/40/10 rule” is a formalization of this idea. It works as follows:
  • At least 50% of each program officer’s grantmaking should be such that Holden and Cari understand and are on board with the case for each grant.
  • At least 90% of the program officer’s grantmaking should be such that Holden and Cari could easily imagine being on board with the grant if they knew more, but may not be persuaded that the grant is a good idea. (When taking the previous bullet point into account, this leaves room for up to 40% of the portfolio to fall in this bucket.)
  • Up to 10% of the program officer’s grantmaking can be done without meeting either of the above two criteria, though there are some basic checks in place to avoid grantmaking that creates risks for Open Philanthropy. We call this “discretionary” grantmaking. Grants in this category generally follow a different, substantially abbreviated approval process. Some examples of discretionary grants are here and here.
• Internal writeup template: Since this post was published, we have begun using a more formalized template for grant investigators to write about each grant, rather than just a list of questions.
• Our thinking about openness: As described in a previous blog post, our thinking about openness and information-sharing continues to develop and change. The main substantive change that relates to this post is that we no longer write in detail about every grant we make. Instead, we add basic information about almost all grants to our grants database, and are more likely to write in more detail about grants that are larger, or that we expect to be more controversial or more interesting to our audience.

Our approach to making grants

Our approach to making grants within causes is fairly different from the approach we use to choose which causes to work in. When selecting causes, we believe that thinking about importance, neglectedness, and tractability is a good way for us to identify areas where we can have the greatest impact. We have applied this framework by considering many different areas at a shallow level, investigating the areas that looked promising in more depth, and then selecting focus areas.

In theory, we could use a process like this all the way down to evaluate subfields, organizations, or grant opportunities within a cause, but we feel this would be unnecessarily unwieldy and time-consuming. Indeed, the aim of cause selection is to choose focus areas that a staff member can understand and keep up with in a more holistic, informal-judgment-based way.

We aim to have at least one person on staff who is deeply familiar and highly engaged with each of our focus areas. For some focus areas, such as those with few existing organizations and little existing infrastructure, we think it’s possible to do this by having a generalist staff member get to know the cause. In other fields, we aim to hire specialist program officers with pre-existing knowledge of and networks in the cause (for example, Chloe Cockburn on criminal justice reform and Lewis Bollard on farm animal welfare). Our program officers are immersed in their focus areas: they know the key issues, arguments, and relevant pitfalls, and are well-connected to major organizations and other funders in the area. This lets us make grants in a manner that is both more informed and more flexible than might otherwise be possible. Because we aim to base decisions mostly on the judgment of a person who is highly informed, we are able to make grants where there is not an easily demonstrable evidence base.

Once a program officer is established in their cause, there are a few ways grant opportunities may come to their attention. In many cases, we find out about grants passively, when others within a cause alert us of organizations or projects that match our interests within the space and are seeking funding. Our experience so far with these kind of grants, and our impression that this is a common way for funders to be connected with funding opportunities, make us especially interested in communicating clearly about our interests and priorities within our focus areas.

In other cases, program officers may reach out more actively to identify potential grants. This happens more often when we have a specific project or unusual angle on a cause that we would like to fund.

Once the program officer is aware of a grant opportunity, it is up to them to decide whether or not to pursue it. To a large extent, this is based on their own judgment of what is likely to produce positive results in their field. With that said, our feeling so far is that there are a couple of ‘molds’ grants can fit into that we find particularly compelling:

• A person or organization working in the space who stands out to us as especially competent and/or aligned with our values, with a reasonable-seeming idea but insufficient funding. When the person or organization is strong enough, we don’t want to worry too much about whether their idea looks strong to us; rather, the idea is mostly evidence that they don’t have all the funding they can productively use.
• Proposals that build capacity or ‘fill holes’ in the space. Our focus areas are generally fields that we believe should be better-resourced and more fully developed than they presently are; as such, we’re excited about funding projects or organizations that are conspicuously lacking, especially if they provide infrastructure for the field that could enable further growth. We generally try to have a model of what sorts of organizations could exist (for example, see our general model for policy areas), and compare it to what sorts of organizations do exist. Examples of grants motivated by this kind of thinking are our grants to the Future of Life Institute (which supported the first dedicated round of academic grants in a new field) or the Blue Ribbon Study Panel on Biodefense (which supported a panel of experts to consider and report on ways to strengthen U.S. biodefense).

We are also more likely to find a grant promising if either of the below is true, though we generally weigh these factors much less heavily:

• The grant provides us with an unusually good opportunity to learn about the cause or organization, or to test a hypothesis (some of our early thoughts on ‘giving to learn’ in this post).
• The grant lets us begin to build and test a working relationship with an organization that we would consider working with more intensively, if the grant went well.

A final important question is whether the grantee is likely to receive funding from other sources, if not from us. In some cases, we may actively reach out to other funders who we believe might be interested in the project, or we may choose to fund only part of the requested amount, in the hopes that other funders will join in. (Taking this approach also lets us test our hypothesis that the grant would not be funded without our support.)

Note that none of the criteria above require that the work we’re supporting have a strong track record or a demonstrable evidence base; we expect to have to exercise informed judgment to determine which grants meet these criteria, rather than relying on formal requirements.

Our decision process for individual grants

The overall process we use to decide whether or not to make a grant is outlined here.

In brief, the person leading investigation into the grant (‘grant investigator’, usually but not always a program officer) goes back and forth between the potential grantee and the Open Philanthropy team in several stages. At each stage, the grant investigator digs further into the details of the proposed grant and discusses remaining uncertainties or concerns with senior Open Philanthropy staff.

Early on, the focus is on getting the basics of the proposed grant. Without spending much time (either their own or the grantee’s), the grant investigator tries to answer questions such as:

• Why should we make this grant? What’s special about it, how does it relate to our overall strategy and to key needs in the space?
• How much funding is sought? What could be accomplished at different levels of funding? What will the funding mostly pay for?
• What is the grantee’s timeline? When do they need to hear back, and when would it be helpful for them to hear back? What is their target for (a) a decision (b) putting out a public announcement involving our support (c) getting the funds?
• What are other potential revenue sources for this project?
• What would we expect/hope for from this grant?
• What are potential risks or downsides of this grant?
• How does the grantee feel about sharing information publicly?

If the grant investigator is still interested once they have an initial idea of the answers to these questions, they write up what they know (or present it in a meeting) and seek signoff to express what we call “strong interest” in making the grant. “Strong interest” means that we are comfortable with both the grant investigator and the potential grantee putting additional time into discussing the grant, preparing materials, etc. We try to avoid situations where a grantee puts a lot of time into making the case for a grant that we aren’t interested in; that’s why we have a formal requirement of checking in with the team before we have much information about the grant.

Once the grant investigator has signoff to express strong interest, they begin to settle on the details of the grant with the grantee. They might revisit any of the above questions which have not yet been resolved, address suggestions or concerns of ours, or discuss which of several proposed variations on the grant we’re most interested in funding.

In order to recommend that a grant go ahead, the grant investigator needs signoff from both Cari Tuna and Holden Karnofsky (President and Executive Director of the Open Philanthropy Project, respectively). We sometimes also involve another staff member who is responsible for intensive questioning and evaluation of the case, but their formal signoff is not required. The extent to which Holden and Cari involve themselves in a grant decision depends on the focus area, grant size, and the level of trust they have built with the grant investigator. As we wrote when we hired our first cause-specific program officer, our aim over time is to build a high level of trust toward grant investigators. Eventually, we hope that Holden and Cari will only feel the need to spot check a claim or two, or raise questions about a grant to ensure they’ve been considered, with most decisions based primarily on the grant investigator’s judgment.

Overall, we believe that keeping the number of decisionmakers as small as possible allows us to make grants at a high level of sophistication that would be difficult to reach if the case for each grant needed to be understood by a larger number of people. The more trust we build with a given grant investigator, the more capable we become of quickly making decisions that require a high level of knowledge, context and sophistication. And the more we can do this, the more we can make grants that are based on long-term, risk-tolerant thinking and don’t rely on easily verifiable evidence, while still being highly informed.

We try as much as possible to avoid requesting that grantees spend large amounts of time preparing documents for us, especially in the early, exploratory stages of discussion. In some cases, we may request that the grantee prepare a short proposal or similar, or they may send us materials they have already prepared. In general, we spend more time and investigative effort on larger grants, and are more willing to make larger requests of the grantee in these cases.

Similarities to and differences from other foundations

As far as we know, the process laid out above is structurally fairly similar to how many other foundations work, with expert program officers leading most decisions.

However, we believe that there are a few aspects of our approach that are somewhat more unusual:

• We put a great deal of time and thought into selecting our focus areas, as well as into selecting program officers to lead our work in those areas. (The former is more unusual than the latter.) We believe that careful choices at these stages enable us to make grants much more effectively than we otherwise could.
• The primary decision-makers work closely and daily with grant investigators, and are checked in with more than once throughout the investigation process. This contrasts with some other foundations, where a Board or benefactor reviews proposed grants at periodic meetings, sometimes leading to long timelines for decision-making and difficulty predicting with confidence which grants will be approved.
• We prioritize information-sharing to a degree that we haven’t seen at any other foundation. This includes publishing notes of our conversations with experts and grantees as much as possible, writing publicly about what grants we are making (including fairly detailed discussion of why we are making each grant and what risks or potential downsides we see), and making posts like this one. We’ve written previously about some of the challenges that we face in being as transparent as we’d like to be. We continue to think that the net benefits of taking this approach are high.
• As part of this, instead of requesting proposals or applications from grantees, we do the reverse: we write (and publish) our own summaries of the grants we make. We feel this is a more natural division of labor. When grantees are responsible for preparing writeups, they often need to spend large amounts of time preparing documents and tailoring them to different funders with different interests. With our approach, grant decisions are made based primarily on conversations or shorter documents, while the funder (Open Philanthropy Project) is responsible for creating a written description of the grant laying out the reasons it is attractive to us.

Tradeoffs

The process laid out above can be consistent with very small or very large amounts of investigation, and there are tradeoffs around how much to do. The more investigation we do, the more of our scarce staff capacity we use, and delays in decision-making can also cause problems for grantees trying to plan their activities. In particular, the more we decide to trust the grant investigator, the less investigation we generally need to do.

We have rough working guidelines that suggest putting more investigation into grants when they are larger and higher-stakes. A public version of these guidelines can be found here.

We’re excited to be turning more attention to grantmaking in 2016 and beyond, and look forward to learning more about how to be an effective funder (and sharing what we learn).

A note on ‘recommending’ grants
During our early work on the Open Philanthropy Project (previously called GiveWell Labs), we did some preliminary grantmaking. These grants (example) were usually made by the foundation Good Ventures, at the recommendation of GiveWell.

As of mid-2015, most Open Philanthropy grantmaking comes from a dedicated donor-advised fund (DAF). The legal structure of this fund is such that Open Philanthropy itself does not exert final control over whether a given grant is made or not. Instead, we recommend the grant to the organization that houses the DAF, which then decides whether or not to accept the recommendation.

We use phrases like “Open Philanthropy made a grant of…” when grants are made from the Open Philanthropy DAF at our recommendation.