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Carl_Shulman comments on Announcing the 2017 donor lottery - Effective Altruism Forum

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Comment author: Carl_Shulman 17 December 2017 06:26:08PM *  3 points [-]

The point of a donor lottery is to help donors move to an efficient scale to research their donations or cut transaction costs. But there are important diminishing returns to donations if those donations are large relative to total funding for a cause or organization. So it is possible to have a pot that is inefficiently large, so that small donors risk not plucking low-hanging fruit. If the odds and payouts were determined by the unknown level of participation, then a surge of interest could result in an inefficiently large pot (worse, one that is set after people have entered).

$100,000 is small enough relative to total EA giving, and most particular causes in EA, not to worry much about that, but large enough to support increased research while reducing the expected costs thereof. If a lottery winner, after some further consideration, wants to try to lottery up to a still larger scale they can request that. However, overly large pots cannot be retroactively shrunk after winning them.

We just want to be really careful about unintended incentives?

One of the most common mistakes people have on hearing about donor lotteries is worrying about donors with different priorities. So making it crystal clear that you don't affect the likelihood of payouts for donors to other causes (and thus the benefits of additional research and reduced transaction costs for others) is important.