A conversation with Joey Savoie on 11 August 2013

Participants
Joey SavoieCo-Founder and Co-Executive Director, Effective Fundraising Nick BecksteadResearch Fellow, Future of Humanity Institute; Trustee, Centre for Effective Altruism Anonymous donor

Summary
We organized this call to learn more about Effective Fundraisings overall strategy and room for more funding. We found their model promising and were considering donating. Effective fundraising is a new organization (started in July 2013) that aims to fundraise for outstanding charities. They are currently writing grants for the Against Malaria Foundation (AMF) and The Humane League (THL). They are looking for 1400-4400 GBP more GBP to operate for their first six months. We are enthusiastic about Effective Fundraisings overall strategy and their plans for monitoring and evaluation. We have some concerns about whether the co-Founders have the necessary experience to do the work effectively, but feel that there is a low overall cost to their attempt and a strong learning opportunity. The anonymous donor will be making a donation of 1400 GBP to Effective Fundraising.

Questions discussed in our meeting

We sent the following questions to Effective Fundraising before our meeting, which formed the basis for our discussion: 1. Questions about your room for more funding: a. How much money are you looking for? How much do you expect to get and are you having a hard time? 2. Questions about your strategy: a. What are the alternatives to grant writing that you considered or might have considered? Why have you chosen grant writing over other possible forms of fundraising? b. Whats the evidence that grant writing has returns of $8 for every $1 spent? How analogous is your situation to the situations where grant writing is supported by evidence? What are the qualifications of a typical person who writes grants and how do your qualifications compare? c. How much of your effort will go toward other forms of fundraising?

d. Is it possible to hire experienced, professional grant writers or other fundraisers to raise funds for your organizations? If so, why not use these methods? 3. Questions about your M&E: a. When is the earliest you would get a grant approved? When is the earliest you would get a submitted grant rejected? b. Will you be sharing the applications you have written? c. What aspects of your process are you not going to share? d. Will you have an external board reviewing your progress? Who will be on it? 4. Questions about your background: a. Do you have any relevant experience running organizations or projects?

Room for more funding

Effective Fundraising is seeking funds for its first six months of operation (July 2013 to December 2013), after which it will do a preliminary self-evaluation and assess whether to continue with its current strategy. They are seeking 4400 GBP to cover their operating costs over this period. If 1400 GBP is not raised, they will need to take time away from their mission to earn money. The remaining 3000 GBP will be covered out of the co-Founders savings if necessary. It is unclear whether the 1400 GBP would have been funded by others. The anonymous donor will make a donation covering the 1400 GBP that is necessary to allow Effective Fundraising to continue its operations over the next six months without interruptions. Effective Fundraising is not yet seeking additional funding for its next six months (January 2014 to June 2014). If they continue the project, they will be looking for approximately 1200 GBP per month.

Effective fundraisings strategy

Why grant writing?
Effective Fundraising considered a variety of types of fundraising apart from writing grants. Effective Fundraising told us that, according to research by the Institute of Fundraising, grant writing has the second highest returns on investment (8:1). Only legacy fundraisinggetting people to name a charity in their willhas higher returns, but legacy fundraising does not seem like a good match for Effective Fundraising. Legacy fundraising takes a long time for the money to pass on to charities and it requires building on existing relationships, which may be limited for smaller charities. Effective Fundraising did not choose door-to-door fundraising or street fundraising because they have lower average returns (2:1, again, according to the Institute of Fundraising), and because they require getting permits that Effective Fundraising thinks would have taken a while to get. Effective Fundraising has not vetted this research done by the Institute of Fundraising because many of the details are not publicly available, except at the price of 350 GBP. We havent looked closely either, but we think that the Institute of Fundraising reaches its conclusions by surveying a variety of

organizations about their expenditures on fundraising by fundraising method, and their returns using those methods. We do not understand how returns were attributed to different methods, though we think this is likely to be fairly unproblematic in the case of grant writing.

Will Effective Fundraising get typical returns for grant writers?

There arent specific degrees or formal credentials required to become a grant writer. Some grant writers are self-taught, and some are trained by other grant writers. Grant writers sometimes majored in English and Journalism, though some have no degrees at all. According to Effective Fundraisings interpretation of data from the Institute of Fundraising that is not publicly available, the bottom 15% of grant-writers get a return of 5:1 and the top 15% get returns of 16:1.

What would it look like in 6 months if the project wasnt working?

If 10 grants have been sent out and come back rejected, they would seriously consider ending the project.

Would it be better to hire an experienced grant writer to do this work? Is that an option?
It costs about $50,000 per year to hire a grant writer as an individual. It is also possible to hire grant writing companies that charge a flat rate and/or a portion of the amount they raise. Effective Fundraising did not know about the rates that grant writing companies charge. Effective Fundraising thought this project seemed worthwhile as experience and they didnt have the funds required to outsource grant writing. These were significant considerations supporting their decision to do the grant writing themselves.

What portion is going to AMF and what portion is going to THL?

About 50% of the effort is going into each project, though donors would have the option of restricting funding in one direction. Effective Fundraising says restrictions would be meaningful because they will institute a scheme under which unrestricted donations are given out partly in proportion to the amount restricted to AMF or THL.

What is the base rate of success for writing grants?

The base rate of grant writing success varies considerably. Grants for $10,000 to $50,000 can have success rates around 10% to 30%. Larger grants, such as grants for $1 million, have success rates around 1% to 5%.

How do AMF and THL feel about Effective Fundraisings operations?

AMF and THL are happy that Effective Fundraising is doing what it is doing. Effective Fundraising pointed out that, according to GiveWells review of AMF, there is room for improvement on AMFs fundraising operations: AMF does not seem to be as aggressive and ambitious about growth and capacity as it could be. It has operated for nine years and still has only two full-time staff members; it does not

appear to us to have built as robust a fundraising operation as it could. http://www.givewell.org/international/top-charities/AMF

Effective Fundraisings monitoring and evaluation

When is the earliest you would get a grant approved? When is the earliest you would get a submitted grant rejected?
The amount of time between applying or a grant and getting an answer varies considerably, with some grants taking 1-2 months and others taking up to 8 months. Letters of Inquiry (LOIs) are often sent to organizations before sending out official grants. Approval or rejection for these can happy more quickly. Effective Fundraising has so far sent off three letters of interest, one of which has been rejected.

Will you be sharing the applications you have written?

Effective Fundraising has not planned to, but they have not made a final decision.

What aspects of your process are you not going to share?

Effective Fundraising will not be sharing the specific grants that it is applying for or has applied for because they do not want to help other grant writers compete with them. Effective Fundraising says it plans to be very transparent on nearly all other aspects of its process.

Will you have an external board reviewing your progress? Who will be on it?
Effective Fundraising has an informal advisory committee giving them feedback and help with the grant writing process. Having an external review in 6 to 12 months is a priority, but the details have not yet been set in place.

Effective fundraisings background: what relevant experience do you have to run this project?
Joey and Xio have worked with non-profits (helped set up THINK, internships at the Centre for Effective Altruism), did a study about how people became interested in effective altruism, and are working on a study of how the effectiveness of vegetarian pamphlets for getting people to become vegetarians. Joey has some background in fundraising, and Xio has some background in sales.