Room for more funding

Room for more funding (abbreviated RFMF^[1]) is a concept that is commonly used in discussions of effective giving and high impact philanthropy. It is related to the question of how a given charity can effectively absorb additional funds and the cost-effectiveness of the additional activities that the charity will undertake with these additional funds. It is an application to charitable giving of concerns about scalability. It can also be thought of as an application of the principle of marginalism to understanding the effect of charitable donations.

People in the effective giving movement have argued that it is often the case that a charity's best and most cost-effective programs are already fully funded and the programs for which additional funding will be used are less effective, hence a person seeking to do the most good with his/her money should take the "room for more funding" question seriously. An extreme example of this is smallpox eradication: although the smallpox eradication program was a great success, it has no room for more funding because it has already accomplished its purpose.^[2]

Discussions of room for more funding

• The concept was introduced and given public prominence by charity evaluator GiveWell.^[3][4] They have published a detailed guide on room for more funding^[3] and have a number of blog posts on the topic.^[5][6] GiveWell employee Holden Karnofsky has also discussed room for more funding in guest posts for Tactical Philanthropy^[2] and the Stanford Social Innovation Review.^[7]
• An article by Jacob Pekarek for the Expositor, a publication of Trinity University, has a discussion of room for more funding, attributing the idea to GiveWell.^[8]
• Charity evaluator and effective giving advocacy group Giving What We Can states on its website that the room for more funding question is a key part of its methodology for evaluating charities.^[9]
• The Chronicle of Philanthropy has discussed room for more funding in a blog post.^[10]
• Animal Charity Evaluators uses RFMF to evaluate animal rights charities.^[11][12]

The room for more funding principle in action

In November 2011, charity evaluator GiveWell removed VillageReach and Nurse-Family Partnership from its list of top-rated charities because GiveWell staff felt that the two charities, while still excellent, did not have any room for more funding, largely because of the success the charities had at receiving donations, much of it due to GiveWell's recommendation.^[13] In response, Alex Tabarrok of Marginal Revolution wrote:

When was the last time that a charity or evaluator told you that due to successful fund-raising there are now more urgent needs elsewhere? Impressive.^[14]

In November 2013, GiveWell removed Against Malaria Foundation from its list of top-rated charities based on similar considerations. GiveWell staff said that they would not recommend AMF as a top charity until AMF managed to commit the bulk of its currently raised funds to bednet distributions.^[15] Giving What We Can disagreed with GiveWell and continued to recommend them.^[1] On December 1, 2014, AMF was added back to GiveWell's top charity list as the concerns about effective use of additional funds were resolved.^[16]

GiveWell's 2015 blog post describing their top charity recommendations had an extensive discussion of the room for more funding situations of their top charities for different levels of execution.^[17]

See also

• Effective altruism
• Earning to give
• Venture philanthropy

References