Projects, People and Processes

In this post, “we” refers to Good Ventures and the Open Philanthropy Project, who work as partners.

One of the challenges of large-scale philanthropy is: how can a small number of decision-maker(s) (e.g., donors) find a large number of giving opportunities that they understand well enough to feel good about funding?

Most of the organizations I've seen seem to use some combination of project-based, people-based, and process-based approaches to delegation. To illustrate these, I'll use the hypothetical example of a grant to fund research into new malaria treatments. I use the term "Program Officers" to refer to the staff primarily responsible for making recommendations to decision-makers.

These different classifications can also be useful in thinking about how Program Officers relate to grantees. Program Officers can recommend grants based on being personally convinced of a particular project; recommend grants based primarily on the people involved, deferring heavily on the details of those people's plans; or recommend grants based on processes that they set up to capture certain criteria.

This post discusses how I currently see the pros and cons of each, and what our current approach is. In large part, we find the people-based approach ideal for the kind of hits-based giving we're focused on. But we use elements of project-based evaluation (and to a much lesser degree, process-based evaluation) as well - largely in order to help us better evaluate people over time.

Projects, processes, and people

In some ways, project-based approaches are the most intuitive, and probably the easiest method for a funder to feel confident in by default. Organizations propose specific activities to Program Officers, who try to identify the ones that will appeal to decision-makers and make the case for them. Thus, decision-makers delegate the process of searching for potential grants, but don't delegate judgment and decision-making.

I think the fundamental problem with project-based approaches is that the decision-maker generally has much less knowledge and context than the Program Officer (who in turn has much less than the organization they're evaluating). This is a general problem with any kind of "top-down" decision-making process, but I think it is a particularly severe problem for philanthropy, because:

From what I've seen, the result can often be that Program Officers recommend the giving opportunities they think they can easily justify, rather than the giving opportunities they personally think are best. This risks wasting much of the expertise and deep context Program Officers bring to the job. I think this is a major problem when trying to do hits-based giving, for reasons outlined previously.

People-based approaches are the opposite in some sense. Grants are made based on trust in the people recommending them, rather than based on agreement with the specific activities proposed. This is "bottom-up" where project-based giving is "top-down"; it delegates judgments to individuals, where project-based giving doesn't delegate judgment at all. I think the advantages here are fairly clear: the people with the most expertise and context are the ones who lead the decision-making. People-based approaches seem likely, to me, to achieve the best results when done well.

However, I also see major challenges to people-based approaches:

Process-based approaches are another approach to scaling understanding. Rather than try to evaluate each project, or defer to individuals' judgment, the funder sets up processes that try to capture high-level criteria. For example, many National Institutes of Health (NIH) grants seek to optimize on criteria such as the significance of the work, the experience/training/track records of the investigator(s), the degree to which a project is innovative, etc. Process-based approaches often (as with the NIH) involve systematic aggregation of a large number of individual judgments, reducing reliance on any one individual's judgment.

I think the appeal of process-based approaches is that they can integrate expertise and deep context into decisions more reliably than project-based approaches (which rely on the judgment of the decision-maker(s)), while also avoiding the disadvantages listed for people-based approaches: difficulty of choosing people, risks of arbitrariness and conflicts of interest, difficulty maintaining fidelity to unusual angles on giving that the decision-maker(s) might have. However, I believe that process-based approaches bring their own problems:

My current view is that process-based approaches can be excellent for funders seeking to minimize risk (of being perceived as unfair, of supporting low-quality work, of supporting work for the wrong reasons). Government funders often fit this description. But process-based approaches seem much less appealing for hits-based giving, unless they are very carefully designed by people with strong expertise and context with the specific goal of pursuing "hits."

Note that the above classifications are fairly simplified, and many funders' decision-making processes have elements of more than one.

Our current approach

Our current approach is based on the idea that people-based giving is ideal for the kind of hits-based work we're trying to do. Specifically, our ideal is to find people who make decisions as we would, if we had more expertise, context and time for decision-making. (Here "we" refers to myself and Cari Tuna, currently the people who sign off on Open Philanthropy Project grants.) We also encourage our Program Officers to take this attitude when seeking potential grantees, though they can ultimately choose whatever mix they want of project-, people- and process-based approaches for making recommendations to us.

Our ideal can be pursued at different levels of breadth. We can set particular focus areas, then try to find Program Officers who make decisions as we would for each focus area. Program Officers can then try to find people who make decisions as they would for particular sub-areas of the focus area they work in; for example, after identifying corporate cage-free reforms as a promising sub-area of farm animal welfare, we sought to support a set of people working on cage-free reforms.

The major challenge of this approach is determining which people we want to trust, and in what domains. We might find a particular person to be a great representative of our values in one area, but a poor representative in another. This is where a more project-based mentality comes in.

A fairly common dynamic with new Program Officers has been that we know far less about their field than they do, and we often learn about the field when we question the parts of a grant writeup we find counterintuitive; at the same time, we often (at first) have better-developed views on philanthropy-specific topics, such as assessing room for more funding. Our goal over time is to reach increasing common understanding with Program Officers and increasingly defer to their judgment.

One principle we've been experimenting with is a "50/40/10" rule:

The idea here is to try to stay synced up with Program Officers on enough of their work - using a "project-based" approach - to continually justify our confidence in them as decision-makers, while allowing a lot of leeway for them to use their own judgment and recommend grants that require deep expertise and context to appreciate.

Similar principles apply to how we support and evaluate grantees. Even when the main reason we're supporting an organization is as a bet on the people involved, we still find it helpful to have an outline of the projects they plan on. This helps us evaluate whether these people are aligned with our goals and whether our funds will help us do much more than they could have otherwise. But once we've determined that the proposed activities seem promising and sensible, we tend to provide support with no strings attached, in case plans change.

Ultimately, I think that our work tends to look very "project-based" in a sense: we put a lot of effort into learning about our focus areas and we ask Program Officers a lot of questions about their recommended grants, and Program Officers in turn tend to ask potential grantees a lot of questions about the specifics of their plans. But the intent of this is more to spot-check our alignment and understanding than to comprehensively understand the grants. When a particular question is hard to resolve, we tend to defer to the people with the most expertise and context. We know we'll never have the whole picture, and our goal is to understand enough of it to extrapolate the rest - by trusting the right people for the right purposes.