“I don’t consider us to still be dating”

From So You Want To Run A Microgrants Program by Scott Alexander.  I have long been interested in the effectiveness of the charitable impulse.  I admire it but long experience has jaded my perspective as to whether all, most, or even much of charity, beyond the person-to-person level, is systematically effective. 

There is just an enormous Hayekian Problem of Knowledge issue which gets in the way.  Millennium Villages Project is not atypical of the mismatch between good intentions, massive effort and little result.  Also, here.  

In terms of economic development, the answer is that most aid programs fail in the aggregate.  There are always those who benefit, even if they are only local grifters, but the question is whether the time, money, talent and energy generated the value expected and whether that value was greater than some other use of that time, money, talent and energy.  The answer is almost always no.  Which is the same answer with most social programs.

There is an immense movement around effective altruism which seeks to address this record of failure.  They do a lot of interesting things but I am not certain I have seen any convincing evidence of a material upgrade in effectiveness.  

Scott Alexander undertook a microgrants program to distribute $250,000, very much informed by the effective altruism movement.  As usual, he is knowledgeable, frank in his description of the learnings and surprises and articulate.  An excellent piece.

While I remain in admiration of those who do sincerely try and make a positive difference, I stick with the overall conclusion I arrived at years ago.  In a world of uncertainty, both individual and collective, the best progress is made from free exchanges in a competitive market.  

Some (among dozens) of the gems in Alexander's account:

I’ll be honest. I know a lot of you are VCs. You read and support my blog, and I appreciate it. Some of the grant money I distributed came from VCs, which was very generous. But I always imagined you guys as kind of, you know, wandering into work, sipping some wine, saying “Hmmm, these guys have a crypto company, crypto seems big this year, I like the cut of their jib, make it so,” and then going home early. I owe you an apology. VC-ing is a field as intense and complicated and full of pitfalls as medicine or statistics or anything else.

[snip]

(8) You will suffer heartbreak

I’d been on a couple of dates with someone a month or two before the grants program. Then in the chaos of sorting through applications, I forgot to follow up.

Halfway through the grant pile, I found an application from my date. It was pretty good, but I felt like it would be too much of a conflict of interest. I sent them an email: “Sorry, I don’t feel like I can evaluate this since we’re dating”.

The email back: “I don’t consider us to still be dating”. This remains the most stone-cold rejection I have ever gotten.

[snip]

All miserable slogs eventually become pleasant memories (eg high school, travel, medical residency). I can already sense the same thing happening to ACX Grants. I’m proud of what we accomplished, and with the pain fading away and only the fruits of our labor left, I feel like it was good work.

But if you’re wondering whether or not to start a grants program, the most honest answer I can give is “I tried this once, and now I’m hoping to invent an entirely new type of philanthropic institution just to avoid doing it again.”

Well worth a read.