effective altruism Archives - Michael Dello-Iacovo

A case study of technical (energy) policy reform from outside government

Lessons from 1.5 years in energy consumer advocacy

Disclaimer: Views expressed are my own and do not represent Energy Consumers Australia.

This post has not been peer reviewed. I spent 11 hours on it and used AI heavily throughout the research and writing process. Most of the time was spent working on the spreadsheet and Guesstimate cost benefit analysis. You can see a copy of my initial Claude prompts here. If the topic is of interest, I can see myself revisiting this in the future and going deeper.

See the post on the Effective Altruism Forum to make or view any comments.

Who might this be relevant for?

People with technical backgrounds in regulated industries (energy, telecommunications, water, finance)
People interested in climate change as a cause area but who want to work outside traditional environmental advocacy
People looking for earning-to-give opportunities that also offer meaningful direct impact
Anyone considering how to have policy impact from outside government

Introduction

In mid-2024, I took a role as an Executive Manager of Advocacy and Policy at Energy Consumers Australia (ECA), the independent national advocate for residential and small business energy consumers in Australia. I recently left after 1.5 years.

This role was primarily about earning to give and career development (it’s for-purpose work, but didn’t seem anything like top recommended charity levels of impact) — specifically, leveraging my resources sector background to build expertise in energy policy given its relevance to data centres and therefore AI. But I also had opportunities for direct impact that I didn’t fully anticipate going in.

This post covers what I learned about a theory of change that may be impactful in other EA cause areas: technical policy reform through regulatory systems that are surprisingly accessible to outsiders. I’ll use a rule change request I wrote and lodged as a case study, attempt a rough impact estimate, and share lessons that might be useful for others considering similar work. You should skip over sections you’re not interested in.

What is Energy Consumers Australia?

Energy Consumers Australia is a small non-profit (~25 staff) funded through levies on energy consumers (~$1 AU per household per year). Its mandate is to advocate for the long-term interests of residential and small business energy consumers in Australia’s National Electricity Market.

ECA has a unique position: it has a “seat at the table” with key decision-makers, including the Energy and Climate Change Ministerial Council (state and federal climate change ministers), the Australian Energy Market Commission (AEMC), the Australian Energy Regulator (AER), and the Australian Energy Market Operator (AEMO). This gives its voice more weight than most advocacy organisations.

A quick primer on rule changes

Australia’s electricity system operates under the National Electricity Rules — a detailed regulatory framework that governs everything from how networks plan infrastructure to how wholesale energy markets operate. These rules have the force of law but are easier to change than legislation. Technically, they’re a form of “delegated legislation” — Australian Parliament has delegated rule-making authority to the AEMC, which can make and amend rules within the framework set by the National Electricity Law.

Any organisation or individual can lodge a rule change request, which the AEMC must consider and provide a formal response. With the right idea, analysis, and stakeholder engagement, a single organisation or person could theoretically change the rules.

This is unusual. In most policy domains, changing the rules requires either convincing legislators (hard), mobilising public pressure (slow), or working from inside government (limited access). The National Electricity Rules represent a relatively straightforward path to having impact that doesn’t exist in many other sectors.

Case study: The Integrated Distribution System Planning rule change

The problem (this is inside baseball, skip if you don’t want the detail)

Australia’s distribution planning rules date from an era when electricity flowed one way — from large power stations to passive consumers. The rules focus on annual maximum demand: ensuring there’s enough capacity to meet peak usage (usually, the hottest day of the year when air conditioners are working the hardest, and likely a cloudy day when rooftop solar is at its lowest output).

But the grid has changed dramatically. Over 4 million Australian households now have rooftop solar. Household batteries and electric vehicles are proliferating. The grid is no longer one-way; it’s a complex, bidirectional system where consumers are also producers.

The current Distribution Annual Planning Reports that networks must produce each year have several problems:

Wrong focus: They’re centred on maximum demand, even though the grid is underutilised most of the year and increasingly constrained by minimum demand (when solar generation exceeds consumption).
Poor visibility: Networks lack requirements to transparently share information about low-voltage network capacity, hosting capacity for solar, or where constraints exist.
Misaligned planning horizons: Distribution planning uses a 5-year horizon, while the Integrated System Plan for transmission looks 20+ years ahead. An efficiently planned network should plan further in advance.

This results in inefficient investment decisions in EV chargers, mid-sized batteries and solar, underutilised consumer solar and batteries, and an inefficiently planned network resulting in consumers paying more than they should for network infrastructure.

This matters because distribution networks — the local poles and wires connecting homes and businesses to the grid — account for around 35% of household electricity bills. The total regulatory asset base of Australia’s electricity distribution networks is over $82 billion, which consumers effectively pay for. Getting the rules right for how this infrastructure is planned, built, and operated has enormous implications for consumer costs and for Australia’s ability to integrate the solar panels, batteries, and electric vehicles that are central to decarbonisation.

The intervention

I wrote a rule change request (supported by a team) proposing to replace the existing Distribution Annual Planning Report with an Integrated Distribution System Plan (IDSP). Key features included:

A longer planning horizon aligned with the national Integrated System Plan
Requirements for networks to publish hosting capacity maps and constraint information
Data sharing standards to improve visibility of the low-voltage network
Community and stakeholder engagement obligations
New utilisation metrics to track whether networks are using existing infrastructure efficiently

The process took about 4 months from initial concept to lodging in January 2025. This involved multiple rounds of collaboration with my colleagues at ECA, as well as extensive consultation with industry stakeholders including AEMO, AEMC, and AER.

Stakeholder engagement for subsequent phases — responding to consultation papers, meeting with stakeholders, and attending public forums — took ~2 additional months throughout 2025.

Reception and current status

The rule change received 30+ stakeholder submissions and substantial engagement. In October 2025, the AEMC published a directions paper with three policy options for consultation, all of which address most of the core problems identified in our proposal. The most important decision-maker, the AEMC, appears largely on board with the direction of reform.

I currently estimate 80% probability that the rule change is implemented in a form similar to the directions paper, given it’s late in the consultation process and we’ve heard from the decision maker. We’ll know for sure by around mid-2026.

Stakeholder engagement: Five principles

A rule change request is half technical analysis, half stakeholder engagement. These are five principles of stakeholder engagement that I think generalise beyond energy policy:

1. Map your stakeholders

Identify who has influence over the decision, who is affected by the outcome, and who can help or hinder your proposal. In our case, this meant networks, retailers, consumer groups, state governments, and the market bodies themselves.

2. Build your evidence base

Ask stakeholders what problems they face with current rules. Their stories strengthen your case. We spoke with community energy groups, installers, and aggregators who had direct experience with the inadequacies of current planning processes.

3. Test early and often

Get feedback on your proposal while drafting. Refine before you submit. We shared early versions with key stakeholders and incorporated their feedback, which both improved the proposal and built buy-in.

4. Understand the opposition

For those who disagree, ask: what would need to change for them to support you? Some networks were concerned about compliance costs. Understanding their constraints helped us design transitional arrangements. Some gave us ideas we hadn’t thought of.

5. Get out the vote

Supporters need to actually support. Many who would benefit from our rule change never made a submission. Formal submissions carry weight in regulatory processes, so actively encouraging supportive stakeholders to participate matters.

Attempting to measure impact

Why this is hard

Measuring the impact of policy advocacy is difficult (see Coefficient Giving’s write up on the challenges of evaluating policy work here):

Benefits can accrue over decades
Attribution is complex (would this have happened anyway?)
The counterfactual is unclear (I made a lot of judgement calls in this analysis)
Implementation details matter enormously, which advocates lose control of over time

I’ve tried to be transparent about the significant uncertainty while still attempting a rough estimate.

The internal costs of undertaking the work were relatively low (1.5 FTE for 6 months * overhead costs) so I’m hand waving them away.

A back of the envelope calculation for impact

I’ve created a spreadsheet version of this here. I also attempted a Guesstimate version here. Some numbers in Guesstimate are different because I’m more explicitly using a 90% confidence interval. I’m familiar with CBAs, but haven’t done one this complex myself before.

There are two primary sources of benefits and one primary source of costs I’m modelling here. The benefits of improved planning are enabling more benefits of distributed energy resources (DER — and therefore consumer savings) and reducing network costs (and therefore increasing consumer savings). The cost modelled is in the cost of compliance by networks (and therefore consumer costs).

Given the existing estimate for the benefits of DER was done through to 2040, 2026 to 2040 is the time period I’ve used for this analysis.

There would also be unquantified emissions reduction co-benefits from better integration/higher adoption of renewable energy resources (see Appendix A for how I would have done this if I had more information).

Enabling more benefits from DER

Several analyses have estimated the economic benefits of better integration of DER in Australia:

Baringa Partners estimated that efficient DER integration could avoid $11 billion in network investment by 2040
IEEFA’s meta-analysis found potential economic benefits of $19+ billion by 2040 from optimal DER integration

These figures represent cost savings (avoided network investment, reduced wholesale costs) which are ultimately consumer benefits given these costs are passed on. For this calculation, I’ll use the $10-19 billion range and attempt to estimate the fraction attributable to improved planning rules:

Factor	Estimate	Rationale
Total potential benefits	$11B-19B NPV by 2040	Baringa/IEEFA
Fraction attributable to better planning rules	1-5%	Planning enables but doesn’t directly create savings
Probability of implementation	80%	Based on current progress
Value of 2-year acceleration	~13.3% of total	Would likely have happened eventually (2 years / 15 years)
Benefits due to ECA	$12M-101M	$11B-$19B * 1-5% * 80% * 13.3%

Reduced network costs

Energy consumers (residential and business) pay for the cost of the distribution network through their energy bills. $23 billion of electricity was supplied to households by retailers in 2024-2025. ~35% of this was distribution costs. So household consumers paid $8.05 billion in distribution costs in 2024-2025.

Factor	Estimate	Rationale
Reduction in costs due to better planning	0.1% to 0.5%	Best guess
Reduction in annual cost	$8M to $40M
NPV over 2026-2040	$84M-$417M	Annuity factor of 10.37 (see spreadsheet)
Reduction in costs due to ECA	$9M to 45M	Multiplied by probability of implementation and value of 2-year acceleration

Compliance costs

Complying with the requirements of this rule change has a non-zero cost for distribution networks, which is ultimately passed on to energy consumers. I’ll directly subtract these costs from the benefits.

I estimate approximately 1-2 additional full-time equivalent staff per distribution network service provider (DNSP), ($180-360k) plus modest IT and data costs (~$50k per DNSP), totalling roughly $3-5.3 million annually across the 13 DNSPs in the National Electricity Market.

Over 2026-2040, this represents ~$31-$55 million in NPV terms. Scaled by the probability of implementation (80%) and the value of acceleration of 13.33% (because I’ve assumed the costs would have eventually happened as well as the benefits), this gives ~$3.3-5.9 million in expected compliance costs. These costs are what seem most plausible given my experience, but I’m quite uncertain about them.

Combined estimate

Category	Lower	Upper
DER benefits	$12M	$101M
Network cost savings	$9M	$45M
Compliance costs	-$6M	-$3M
Net total	$15M	$143M

For my personal contribution (~25% attribution as primary author and project leader, with the rest to ECA colleagues and external collaborators):

Range: $4-$36 million in expected consumer savings

Note we should also assume that there’s a decent chance that the second-best candidate for the job would have done similarly as well.

Caveats

I want to be clear about what this calculation does and doesn’t show:

The actual impact depends heavily on implementation details still being determined
I may be motivated to overstate both my contribution and the total value of the project
The counterfactual is uncertain — industry had recognised the need for distribution-level planning and data reform for at least 5 years (for example)
I made some assumptions that I haven’t discussed, such as assuming that the benefits of the rule change are evenly distributed over 2026-2040 (they may be front-loaded, for example)
Be aware of survivorship bias — not all rule change requests are successful or even conclude fully in line with what was lodged
The upper end seems (surprisingly and suspiciously) high for ~6 months of focused work
This analysis also likely makes the precision seem higher than it is

I’m not sharing this as a confident impact claim but as an illustration of the potential leverage available through technical policy reform. It’s also an interesting exercise that I’d encourage others to explore for their own work — just don’t overcorrect based on a BOTEC.

Note also that these are benefits experienced by, in global terms, well-off Australians. $1 of benefits to an Australian is on average less valuable than $1 of benefits to someone in a developing nation, or even just more specifically targeted at Australians in hardship.

Discussion

Some of the numbers in this BOTEC are doing a lot of work without a lot of certainty. The fraction of DER benefits attributable to better planning rules (1-5%) seems safe based on my experience and intuition, but I have low confidence on it.

The probability of implementation being 80% implies that the political will already existed. It’s interesting to me that despite the need for the change being identified for at least 5 years, it did not seem like anyone else was going to start the process in the foreseeable future. This is tied to the next assumption — how much did our lodging of the rule change accelerate the process. AEMC can’t lodge their own rule change requests, but another stakeholder could have.

From my discussions with people in the sector longer than me, it does seem like this is just genuinely a reform that many people wanted but no one got around to prioritising. No one else was working on it, so we accelerated the reform by at least a year, and maybe much more. There is also likely some value in locking in a better version of this reform as a consumer advocate body, relative to perhaps if an industry interest group had lodged a similar rule change.

There is a challenge I’ve experienced in consumer advocacy where the costs of reform tend to be relatively known, while the benefits tend to be relatively unknown. Reform often creates benefits that were unexpected. We expect better planning and more availability of network data to have this potential, but it makes it more difficult to sell the story on a purely cost benefit analysis framework.

I stand behind the ‘qualitative cost benefit analysis’ we conducted as part of the rule change request (page 20 onwards of this), and for what it’s worth, the sector seemed broadly convinced. We didn’t attempt a quantitative cost benefit analysis when lodging the rule change request partly because even with more effort it would have been flimsy.

What surprised me: A different theory of change

Coming from animal advocacy, I expected impact to come through familiar channels: public campaigns, mobilising constituents, and convincing legislators. What I found in energy policy was different. Most of my impact came through relatively non-public, non-exciting work:

Rule change requests
Technical submissions to consultations
Advisory and working groups
Direct engagement with regulators

This isn’t because public pressure doesn’t matter in energy (climate change and cost of living have been top election issues here for years), but the specific architecture of Australia’s energy governance creates unusual opportunities for outsiders to have direct influence through technical channels.

The National Electricity Rules represent an opportunity for small, non-industry/non-government actors to create substantial change that doesn’t exist in many other sectors. Any organisation or even individual can lodge a rule change request which the Australian Energy Market Commission must consider. With the right idea, analysis, and stakeholder engagement, any one person could in theory change the rules and influence the Australian energy sector, but the power and influence that your organisation holds clearly matters a lot.

I looked for some statistics on how many rule change requests end up resulting in rule changes to get a sense of the success rate. 548 rule change requests have been initiated. It’s hard to say how many of them were successful without spending more time, because AEMC doesn’t publish statistics on this, and some of the requests get merged into others. Also, not all rule change requests survive the consultation process intact. It could end up being quite different to what was originally proposed. A little over half of rule changes that have been initiated have commenced (incorporated in the live rules). Overall, I’m reminded of a hits-based giving approach.

Why this might generalise

The broader lesson is: understanding the specific architecture of a policy domain matters enormously for theory of change.

Some questions worth asking about any policy area:

Are there formal mechanisms for outside input (like rule change requests)?
Who actually makes decisions, and what evidence do they rely on?
Is the domain more technocratic or more political?
Where are the leverage points that don’t require legislative change?

Regulatory systems vary widely in how accessible they are to outside influence. Some are essentially closed; others, like Australia’s energy rules, have built-in pathways for external proposals.

Is consumer advocacy neglected from an EA perspective?

Consumer advocacy generally is almost certainly not neglected from an EA perspective, in my view. Consumer protection, fair pricing, and market efficiency are important but not obviously underfunded relative to their importance.

However, consumer advocacy as a vehicle for other cause areas — especially climate change — might be underrated.

The consumer frame can align diverse stakeholders around reforms that also serve climate goals. When I argue that better distribution planning will reduce costs for households, I’m building a coalition that includes people who don’t necessarily prioritise climate but do care about electricity bills. The same reform that saves consumers money also enables faster, cheaper decarbonisation.

However, there are some situations where consumer advocacy may conflict with environmental goals. For example, transitioning away from coal to large and small-scale renewables happens to be cheaper for consumers, but what if it wasn’t? Switching to time-of-use pricing might help with grid decarbonisation, but it might increase bills for some.

Reflections and lessons

On the work itself

Understand institutional architecture before choosing interventions. I could have spent more time trying to influence energy policy through public campaigns. Instead, the rule change pathway offered a more direct route to systemic change.

Technical credibility matters. Rule change requests are evaluated on their merits. Having a PhD (even in an unrelated field) and developing genuine expertise in energy policy may have helped my proposals be taken seriously.

Relationships compound. The stakeholder engagement I did for this rule change built relationships ECA and I will carry into future work. Australian energy policy is a relatively small world; reputation and trust matter.

Patience is required. The rule change process takes 12-18+ months. The benefits, if they materialise at all, will accrue over decades.

On career

This role served multiple goals simultaneously:

Earning to give: Competitive salary in a mainstream policy role
Career capital: Developing expertise in energy policy and regulatory systems
Direct impact: Opportunities like this rule change

The combination feels compelling to me. Many EA career paths frame earning to give and direct impact as separate tracks. But roles in regulated industries can offer both — plus skills relevant to areas like AI governance.

Energy expertise and career capital specifically may become more valuable as AI scaling continues. Data centres are major electricity consumers, and questions about energy infrastructure, grid reliability, and sustainable power sources are increasingly relevant to AI development.

Conclusion

The key lessons I’d highlight:

Technical policy reform from outside government can be a viable theory of change in certain regulatory contexts. Some regulatory systems are surprisingly accessible to outsiders with good ideas and stakeholder engagement skills.
Understanding institutional architecture matters. The specific pathway to change varies enormously across policy domains. Invest in understanding how decisions actually get made.
Stakeholder engagement is half the work. Technical quality is necessary but not sufficient. Building coalitions, understanding opposition, and ensuring supporters actually participate are equally important.
Consumer advocacy can be a vehicle for other goals. Framing reforms around consumer benefit can build coalitions that advance climate and other objectives.
Earning to give and direct impact aren’t mutually exclusive. Roles in regulated industries can offer both.

I’m grateful to my colleagues at ECA for the opportunity to do this work, and to the many external collaborators in the energy sector who engaged constructively with our proposals.

I’m happy to answer questions or discuss further in the comments, and also welcome feedback. I’m particularly interested to hear from people working in the policy space, and whether any of this does/doesn’t resonate. I can also write more deeply about what we specifically did during the project if it’s of interest and use to people.

For context on why I’m leaving ECA — a new opportunity came up that offers continued development as an energy policy expert, strong earning-to-give potential, and the chance to work directly on emissions reduction in Australia.

Appendix A: How to estimate the benefits of reducing emissions

Electricity generated from rooftop solar has a much lower carbon footprint than electricity generated from the grid (as a mix of coal, gas, wind, solar, hydro, and other), though this effect will decrease over time as wholesale generation decarbonises anyway.

The AEMC now formally values emissions reduction in its rule-making using the interim Value of Emissions Reduction (VER), as set out in their March 2025 guidance. The VER starts at $80/tonne CO2-e in 2026 and rises to $420/tonne by 2050 (in 2023 dollars). I could use this to estimate the benefits from this rule change in terms of emissions reduction by enabling more solar generation and battery storage (so solar energy can be used at more carbon intensive times like in the evenings).

I didn’t end up including this in the main analysis because I couldn’t get it to a point that I was comfortable with, but here’s how I would have done it. The main missing link is knowing how much CO2-e we’d expect to be reduced due to distribution-level DER and what percent of that could be attributed to better planning.

Better planning enables additional emissions reduction through:

Reduced curtailment: Rooftop solar output is being increasingly constrained due to minimum system load and voltage issues. Better visibility of the ability of the network to host DER enables more efficient siting and reduces wasted generation.
Faster deployment: Hosting capacity maps and clearer connection processes accelerate DER installation.
Optimised locations: Transparent constraint information enables community batteries and EV charging infrastructure to be placed where they deliver most value.

I estimate these improvements could increase DER effectiveness by 2-4% (actual analysis would be better, obviously), so I’d multiply the value by 0.02 – 0.04. I’d then multiply this by $80/tonne CO2-e (or maybe integrate it over time to reflect the decreasing emissions reduction value of rooftop solar over time), then multiply it by 80% (for probability of implementation from now) then by 13.33% (for the value of 2-year acceleration).

Note that in some cases the emissions reduction benefits could effectively be passed on to consumers negating the benefits for this analysis, but not necessarily, and not necessarily all of the benefits.

Why I Will Never Have a Child – Antinatalism and ethics

I don’t ever want to have a child. I haven’t been private about this, but I haven’t really been public either. I talked about why I don’t want to have children, and why I think it would be unethical for me to have a child.

[https://www.youtube.com/watch?v=7oKLAwkLRFk]

Donation pledge update

As of the 31st of August, 2016, I have pledged to donate all of my income each year over $45,000 Australian for the rest of my life to what I believe is the most effective charity/cause. That’s the short version, but I’d like to say a few more things.

Why are you making this public?

I recently heard a quote (and sadly I can’t remember where so I can’t give due credit – edit: found it) that it’s more selfish to donate and not tell anyone than to donate and tell everyone. By telling people you donate, you encourage giving norms, which encourages other people to donate. Imagine if, over the course of my life, I encourage just 1 other person to do the same. I’ll have doubled my impact.

Also, there is the very real possibility that, if I kept this as a pledge internally, or didn’t pledge at all, my values will drift over my life, and eventually I’ll stop caring to donate.

I keep a very transparent list of my donations here, and encourage others to do the same.

That’s a lot of money! Aren’t you worried?

Not really. As I’ll discuss below I think this would make me much happier than spending the money on myself. Plus $45,000 probably gets you further than you think once you take out excessive holidays, fancy houses, cars, clothes, restaurants, movies etc. And on an income of $45,000, I’d still be in the richest 1.3% of the planet.

Anyway, about $4,000 saves a life at the Against Malaria Foundation, 60 cents reduces one year of animal suffering if donated to an Animal Charity Evaluators recommended charity, and a donation to an existential risk organisation like the Future of Humanity Institute has a meaningful chance at reducing the risk of human extinction. It’s pretty hard to spend too much money on myself once I realised that.

Where do you think that money will go?

I think the answer to this question will change very often, so I won’t answer it in full here. At least in the near future it will probably just go to whichever charity I think is the most effective at reducing the suffering and maximising the pleasure experienced by conscious minds (including non-human animals, insects, and even AI if it turns out to be sentient). In the future I might decide that, say, political lobbying is more effective, so I remain open-minded.

What’s the catch?

Well, if the cost of living dramatically increases, I probably won’t make large sacrifices to maintain the pledge. There are practical and selfish reasons for doing this. The practical reasons are that, sometimes you have to spend money to make (and donate) money. If I were going for a job interview and thought I’d need a suit to land the job but I was about to go over, I’d probably buy the suit.

Also, there’s the risk of burnout. I don’t feel like I’m in any danger of burning out because I’m so motivated to make a difference, but a lot of smart people have told me that living a certain way is difficult to maintain. Donating a medium amount over a life is certainly better than donating everything for 3 years then giving up.

My current living costs are about $20,000 per year, so I really don’t see this happening any time soon. Plus I’m going to allow the cap to grow with inflation.

Wait, $20,000 a year? So you plan to blow $25,000 on yourself each year?

Not quite. I still donate as much as I can, the $25,000 is just to allow for changing circumstances.

Should I do the same?

Maybe. I guess you should ask yourself what you want in life. If it’s to make a positive difference, this is probably one of the best ways of doing so. If it’s for yourself to be happy, I’d actually argue you should still make a pledge. Anecdotally, I am much more happy after I first made a smaller pledge last year, and I feel no regret or worry about doing this today. I feel like I’m making a real difference, and that feels good.

Also, someone earning $100,000 a year is only marginally more satisfied than someone earning $50,000 a year. An individual earning $100,000 but giving half would arguably be quite a bit happier than someone who just earned $50,000 a year too. At about $40,000, other factors, such as health, relationships and a sense of purpose contribute more to happiness than income.

Have you ever felt like you have to work harder so you can buy more ‘stuff’? This is a concept called the ‘hedonic treadmill’. You can keep buying stuff and not really increase your happiness.

As I say, it did take me 18 months between hearing about such pledges and making this one. I would definitely encourage making a smaller pledge (Giving What We Can have suggested 1% for the first year), and increasing that if (or when) you’re convinced it’s manageable/makes you happier.

Any tips for saving money?

Totally. Toast sandwiches are delicious and are one of the cheapest meals per calorie (don’t use dairy butter though folks).

But seriously, Mr. Money Mustache is a great blog on reducing your spending in creative ways and investing wisely.

Budget yourself, and just don’t spend money on crap you don’t need.

I still think you’re kind of weird

Perhaps, but I think it’s a good weird. Plus, more and more people are doing this!

Expert opinion or simple model: Which is better?

I saw a very interesting talk at work today about decision making in oil and gas businesses, and thought it had some pretty neat applications for decision making in general. I’d just like to summarise the research by David Newman who is studying his PhD at the University of Adelaide in the Australian School of Petroleum. He has 35 years experience in the oil and gas industry and in decision making. Unfortunately I don’t have full references for a lot of the work due to the format of the presentation and have tried to provide credit where possible.

The premise is that oil and gas projects (the exploration, development, drilling and production of petroleum) struggle to achieve promised economic outcomes in hindsight. Research has shown that a good predictor of outcomes is the level of front end loading (FEL), or exploration, feasibility studies and analysis, completed at the final investment decision (FID), when the full blown project is given the final go-ahead.

The value of FEL is well known and many individuals and companies advocate its use, but in reality it is not used or used poorly. More commonly, expert opinion is used. A common situation is expert opinion overruling a work of analysis because they claim that this project in particular is somehow ‘different’ or ‘unique’ compared to other projects.

As we know from research in the non-profit sector, expert opinion is very often wrong, and is not a substitute for data and analysis, and so it is no surprise that it holds little value in other industries as well.

However, Newman proposes that expert may be a viable substitute if and only if it passes 4 tests:

Familiarity test – Is the situation similar to previous known examples?
Feedback test – Is ongoing feedback on the accuracy of the opinion good? If evidence is received that expert opinion is not working for the given situation, immediately review. This is notoriously difficult for projects with multi-year lifespans, such as oil and gas projects and charity programs.
Emotions test – Is there a possibility that emotions are clouding the expert’s judgement?
Bias test – Is there a possibility that the expert is succumbing to some kind of bias? It is hard to be a dispassionate expert on an issue.

There is a belief that data and models are only better at predicting outcomes than expert opinion if they are complex and advanced. Meehl’s work shows that even simple models are better than expert opinion in the majority of cases. 60% of comparisons showed that the simple model was better, and the majority of the remaining 40% showed something close to a draw.

To understand the phenomena at play, Newman and his colleagues interviewed 34 senior personnel from oil and gas companies with an average of over 25 years experience in the industry. The personnel were a mix of executives (vice president level or equivalent), managers and technical professionals (who were leaders in their own discipline).

The survey data showed that ~80% saw FEL as very important, ~10% as important, with none saying it was not important.* However, none of those surveyed use the results from FEL as a hard criteria. That is to say, none are willing to approve or reject a project based on FEL data alone. Many used FEL as a soft criteria, in that it guided their final decision, but had no veto power. The results of this survey are not statistically significant due to small sample size, but according to Newman may be seen as indicative.

Interestingly, the executives tended to rate their understanding of the technical details of projects higher than the actual technical experts. Either the executives are over confident, the technical staff are under confident, a combination of both, or, seemingly less likely, the executives really are more competent in technical matters.

Newman proposes the following set of solutions to overcome the problems discussed here.

Apply correction factors to predict likely outcomes based on FEL benchmarking (comparison to other projects). This is difficult in oil and gas due to the differing nature of projects, and is expected to be a problem in charity programs as well. It might be worthwhile looking at programs that have done similar work in an attempt to benchmark, or at least previous programs within the same organisation.

Benchmarking can be a checklist to score against a certain criteria. For example, a dispassionate outsider can be brought in to answer pre-determined questions and provide an assessment based on data (and only data, without interpretations) from the team. They might also rate individual categories as poor, fair, good or best.

The adjustment factors will vary significantly between different types of projects, however the table below provides an example for two factors, cost and schedule, which have been rated by an external auditor. If the schedule has been rated as poor, as in the schedule pressures are likely applying pressure and biasing results (being behind schedule makes staff more likely to say the project is complete), you should adjust the appropriate data by a scalar of 1.1-1.5 (or inverse). My interpretation of this is that if long term costs are expected to be $100/week, and the scalar of 1.4 is selected due to the project being behind schedule, the true cost should be estimated as $140/week. The ranges are examples only, and the ideal values for a given type of project can only be determined through extensive analysis of that type of project, which can make this type of analysis difficult to be meaningful if substantial data isn’t available.

	Cost	Schedule
Best	0.9 - 1.15	0.9 - 1.15
Good	0.95 - 1.2	0.95 - 1.25
Fair	1.0 - 1.3	1.05 - 1.4
Poor	1.05 - 1.45	1.1 - 1.5

Apply post-mortem analyses, or reviews of projects after completion.

Apply pre-mortem analyses. This involves asking everyone involved in the project to imagine that the project has concluded its life, and a disaster has occurred. They are then asked to propose why the project failed. This increases the chances of identifying key risks by 30% (no source beyond Newman for this unfortunately, but it’s a huge result). The reason being that it legitimises uncertainty, and makes staff more likely to think of obscure lines of thought or things that might be considered rude to bring up under different circumstances. Calling a team members work a risk would be uncomfortable in other situations.

I’d be interested to see some of these techniques being applied in non-profits and EA organisations more if they aren’t already, especially the pre-mortem technique. If the data is to be believed then it is a highly effective exercise. Also interested to hear your thoughts as to how they could be applied, or whether you think they are useful in the first place.

Again, there are several references to the work of other researchers that I would love to have referenced, however was unable to as the reference was not provided.

*In my personal opinion, the way these surveys are structured may lead to some bias themselves. For example, the 4 choices for this part of the survey were ‘very important’, ‘important’, ‘neutral’ and ‘not important’. It doesn’t seem likely that anyone perceived to be an expert would say a concept known to be important is important.

Peter Singer’s 70th birthday

This post is a bit of a plug, but it’s for a great cause so I’m ok with that.

As you might know, the Effective Altruism Adelaide group is hosting Peter Singer, Australian moral philosopher, for a presentation and Q&A about his work on the 13th of April. Peter has made massive contributions to the field of ethics through his work on poverty, animal rights and in co-founding the Effective Altruism movement.

July the 6th is Peter’s 70th birthday, and for an early birthday present we are hoping to raise an enormous amount of money for one of the most effective charities in the world, the Against Malaria Foundation. Peter himself has donated $100 to the cause, but imagine his surprise when he finds out we have raised tens of thousands of dollars for a cause he is so passionate about.

$25,500 worth of donations are being matched by anonymous donors, so this is a great way to double your impact as well.

So why not make a small contribution to show how Peter has affected your life through his work. As for me, he’s literally changed my life.

NB: If you’re interested in the Against Malaria Foundation’s effectiveness, they are estimated to be so effective that they can save a life for on average less than $4,000 AUD. A$40,500 achieved = 12,000 nets bought = 22,000 people protected = 44 ENTIRE villages protected.

Causality in altruism

You might hear stories of someone who influenced someone else to be vegan or to donate 100 dollars and then claimed to have caused X animal lives to be saved or $100 to be donated, which are very good things indeed. But the person who donated that $100 can also claim responsibility for donating that money, because they were an integral step in the outcome, without which the money wouldn’t have been donated.

But if both parties are claiming full responsibility for causing $100 to be donated, shouldn’t that imply that $200 was donated? So who can claim responsibility here? Are they both equally responsible? Is it reasonable to say that they were both fully responsible after all? Or is it, as many things are in the real world, much more complicated than that? This is important if we, as individuals and organisations interested in maximising impact, are going to be rigorous about measuring the impact of individuals.

A friend once told me a story that poses an ethical riddle. It goes like this:

A married woman had been growing bored. Her husband wasn’t paying her attention anymore, and had stopped treating her well. She started sneaking away at night to go and sleep with other men across the river from her house. There was a bridge but she took the ferry to reduce the risk of being seen. One night, she went across the river but the man whom she had arranged to sleep with didn’t show. She went back to the ferry, but the boat master had heard of what the woman was doing from a friend and didn’t want to ferry her anymore. The woman, desperate, went across the bridge, where a drunken man killed her in a fit of rage. Whose fault was it that the woman died?

Another, more complicated riddle is presented:

There were four men in a military camp in the middle of the desert. Three of them hated the fourth, John, and wanted to kill him, but they wanted it to look like an accident. One day, when it was John’s turn to go on patrol, one of the others took his chance and put poison in John’s water flask. A second soldier, not knowing what the first had done, poured out John’s water and replaced it with sand. The third then came and poked small holes in the bottle so its contents would slowly leak out. When John was halfway through his patrol and looked for a drink, he realised his flask was empty, and he died of thirst. Who killed John?

In safety, there is a concept known as the ‘root cause’. For example, take the Air France Flight 4590 in 2000 which involved a Concorde plane outside Charles de Gaulle International Airport in France. The plane crashed, killing all crew and passengers, and some bystanders on the ground. Was it the crew’s fault? No, because the plane’s engine had caught fire shortly before take-off. So was it the fault of the engine manufacturers?

No, as it was revealed that a tyre had ruptured during take-off which hit the fuel tank, which resulted in the flame. This in turn was caused by a piece of metal found on the runway, which had fallen off of another airplane that day. This led back to the operator who had replaced that particular piece of metal, who had incorrectly installed the piece. This was interpreted as the root and primary cause of the accident.

But even so we can go back further. Someone must have trained this operator – did they do a bad job? Is it the fault of the management of that company for not putting the correct practices in place to eliminate the occurrence of such events? Maybe someone had just upset the operator and he wasn’t thinking straight.

If we go back to our first example and apply the root cause logic, that suggests that the woman died because of her husband. But this is an uncomfortable result, as the one who is most at fault is surely the man who actually killed her. Some might argue that the root cause is really just the drunken man, but it has to be said that all individuals in that story played an integral part in the woman’s death.

It might even be argued that the man was not thinking straight. What if he was drugged through no fault of his own? To be clear here, I don’t mean to imply that each player in this chain of events should be held responsible, or indeed be ‘guilty’, but they did play an unknowing role.

Bringing this all back to the original question, I confess I don’t have an answer. But I’m convinced that the answer isn’t as simple as we think, and if we want to be rigorous about measuring the impact that individuals have through an action or over their life, we should consider this further. At the very least, we should define very clearly what we mean when we say “I/we caused $100 to be donated.”

Effective Altruism and Ethical Science

This piece was co-authored by Robert Farquharson and myself in response to what we believe is a key misconception about moral relativism, especially in the context of Effective Altruism.

Introduction
Peter Singer’s practical ethics argues that we have a remarkable opportunity and moral obligations to help those less geopolitically fortunate than ourselves. This has formed the basis for the Effective Altruism (EA) movement. What makes this model of philanthropy different to previous versions is the focus on effectiveness: EA takes a rigorously quantitative approach to assessing and engaging in ethical behaviour. The results have been more than interesting. As it turns out, saving a life or seriously reducing global poverty (see Peter Singer’s The Life You Can Save) is surprisingly within our reach, giving us cause for hope. Our philanthropic missteps, however, are lamentably all too human. There are many cases of well-meant charitable causes that have, upon analysis, been found to cause more harm than good. By approaching these moral problems with the clarity and rigour of the scientific method, EA combines “the heart with the head”. This better equips us to avoid future missteps, and maximise the positive outcomes we can achieve. As the argument goes, we can and should do the most good possible.

EA has not been embraced without criticism. A prominent counterargument EA receives is that it has no grounds to comment on an objective view of ethics. Science is about measurement, and morality is about values, so we commonly perceive these as independent realms. After all, how can we measure morality? What facts about the world tell us what we should value? This is particularly problematic because, often enough, even members within the EA community itself will concede this point. People who are already dedicated to improving human well-being according to the best available evidence are unwilling to defend the moral objectivity of such a cause, preferring instead some version of moral relativism. Perhaps we can measure something about what we think about morality, but who’s to say that it can be universalised? Many of us are resigned to this kind of subjective, context sensitive view of morality, particularly when it comes to cross-cultural claims. What seems right to me may not seem so to you, but that’s okay. What’s right in our culture isn’t always going to be right in another culture, and it would be presumptuous at best to impose that view on others. Or so the argument goes.

The aim of this piece is be to discuss this line of criticism. First, the misconception that science has nothing to say about morality will be addressed. There are moral facts to be observed, these facts are just psychological and physical facts, about the world and the conscious creatures within it. Second, a double-standard that is often applied to potential objective claims to morality will be highlighted. A common rebuttal is that a science of morality can’t be fundamentally based on an assumption lest it become ‘subjective’ after all. However, most if not all other scientific domains operate in just such a way, and yet their philosophical and scientific credentials are never in doubt. Being objective is the not the same as being absolute, self-justifying, or unchanging.

It is our view that EA’s integrity as a movement precisely relies on making such objective claims to moral facts, e.g. that not all charities are equal. Being a fledgling, but promising form of a moral science, it is thus crucial for EAs to clear the air on the superiority and validity of the movement’s theoretical commitments. Responding to these criticisms could have implications for our understanding and discourse surrounding morality beyond just the EA community.

We will say here that, as a community, focusing on the ethical obligations over the opportunity that EA presents is potentially not the most effective way to encourage people to become effective altruists, but it is an important concern that we have decided to address here. This should by no means be an introduction to EA if you haven’t heard of it before! I’d recommend one of the many EA books out there, or this TED Talk by Peter Singer.

The Argument from EA

In The Life You Can Save, Peter Singer proposes 3 premises:

1) Suffering and death from lack of food, shelter and medical care are bad.

2) If it is in your power to prevent something bad from happening, it is wrong not to do so.

3) By donating to aid agencies, you can prevent suffering and death from lack of food, shelter and medical care, at little cost to yourself.

If you agree with these premises, then Singer’s conclusion is that by not donating to aid agencies, you are doing something wrong. At the very least, you’re missing an opportunity to do something right. By breaking the logic down into these steps, it is hard to argue with, or to claim that individuals can have different ‘versions’ of morality that are equally as valid. However, while the third premise seems straightforward to most people, the first two are tougher to swallow. Accepting the third leads to a simple matter of calculus, some aid agencies just don’t prevent suffering and death as well as others. The numbers sell most people on the effectiveness clause. But why is altruism good, and why must I help? Isn’t suffering just subjective?

The Measure of Morality: Suffering, Wellbeing, & How to Find Them.

Philosopher/Neuroscientist Sam Harris invites us to imagine the ‘Worst Possible World’ (WPW). The WPW is hellish, where every conscious creature experiences the worst possible misery it can for as long as it can. Think burning alive, but that is the only conscious experience you will ever have. This is a bad state of affairs, if the word ‘bad’ means anything at all. The pain and misery being suffered in the WPW, and conversely the happiness and flourishing that we relish in this world, are realised as experiences in consciousness. This makes them subjective in one sense, in that they can’t exist in the absence of a conscious subject ‘feeling’ them. However, this doesn’t make judgements about their character merely subjective, in the sense of always ‘relative’.

If you think that pain, misery, and suffering, are merely subjective tastes, and are unsure why you shouldn’t value those states instead of things like love, laughter, and satiety, you’re thoroughly confused. Conscious experience is, by its very nature, already and immediately coloured with a certain kind of character. If you’re not sure whether or not a child dying famished and diseased is having a conscious experience on the negative end of the spectrum somewhere, you’re not playing by the same rules. The only philosophical assumption you need to make here is that suffering the worst possible misery you can for as long as you can is, indeed, the minima of conscious experience. The starving child is hovering somewhere near this minima.
Once we accept this superficial fact about the nature of conscious experience, we can honestly admit that any changes that lead us away from the WPW are what we mean when we say ‘morally good’. Whatever reprieve we can offer the inhabitants of the WPW, however small, would potentially be the clearest case of a moral behaviour there is. If it’s within your power, at little to no cost to you, merely offering a 10 minute window of painless respite for the immiserated sufferers of the WPW is something you ought to do. Singer’s drowning child example leans on the same principle. To leave the dying children of the developing world in such a state of persistent misery, when we could easily do otherwise, is a moral failing.

So, notions of good and bad, right and wrong, have everything to do with the changing character of experience in conscious creatures. Every moral judgement comes down to how much and in what direction an action changes the conscious experience of some agent. Bringing someone closer to the worst possible misery they can experience is movement in the wrong direction. Again, if you’re unsure about this, try and find a conscious merit in dying from forced starvation.

With changes in consciousness as our basis, we can begin measuring those changes. If we know anything about consciousness at all, we know that it correlates meaningfully with brain states. Brain states are just a kind of physical state though, and thus completely amenable to objective inquiry. Some things lead to those brain states which cause experiences of pain, misery, and suffering, while others lead to the brain states that correlate with euphoria, heightened self-esteem, and the rest of the positive emotions we all crave. Importantly, it’s possible to measure these causal relationships scientifically. That is, we can measure how some actions or social constructs regularly and reliably move conscious experience in particular directions. Our goal is to move towards well-being, loosely defined as having much of one’s experience situated on the positive end of the conscious spectrum.

To sum, if our notions of morality are about experiential changes in conscious creatures, and the manner in which those changes occur are amenable to scientific inquiry, we can measure morality just like any other physical quantity. Moreover, EAs regularly do this. There is an important distinction to make between the character of the experiences themselves, and the things that reliably lead to them. A dangerous kind of moral relativism sneaks in when we confuse these two things. There are many ways to move our conscious experiences, but there will be a fact of the matter about which things move them in what direction. Science has, in fact, a lot to say about morality.

The Big Lebowski Response

While most people are convinced by this consequentialist notion of changes in conscious experience, there is a recalcitrant meme that is often cited in reply. Just like the scene in ‘The Big Lebowski’ where the Dude says, “Yeah, well, you know…that’s just, like, your opinion, man”, we often hear that it’s just all relative. Who’s to say I should value experiences like love, euphoria, compassion, and all the rest? Alternatively, who’s to say that my versions of justice and fairness are the same as yours? And, finally, what gives you the right to enforce your version on me? Science is perceived as not just silent on these issues, but in principle incapable of addressing them.

To quote a critic, “The point is this: Effective Altruism, while very welcome, is not an “objective” look at the value of philanthropy; instead it is a method replete with philosophical assumptions. And that’s fine, so long as everyone realizes it”. The problem, it seems, is that nothing ‘objective’ can be based on a ‘philosophical assumption’. If it isn’t truly objective, it’s just your opinion, and therefore lacks any normative force that actual sciences would have. This is plainly false.

Everyday Empiricism

To address the first point regarding the relativity of subjective experience, it’s easy to see how this form of response would be absurd when you transpose it into any other scientific domain. For example, take physical health and medical science. There is nothing in modern health science that can tell you why you ought to value being alive or free of disease, with absolute self-justifying or ‘scientific force’. However, we just do value these things. At the base of medical science are the ‘philosophical assumptions’ that being alive is better than being dead, and consequently, that the goal of medicine is to mitigate and prevent things that cause premature death. Once we all accept this, we can investigate the objective, causal relationships between certain physical quantities and their consequences with regards to how they move us towards that goal. If the Dude were to come to you with a gangrenous leg and say, “Who are you to say you’re healthier than me? That’s just your opinion, I don’t value being free of disease and pain”, we’d dismiss him as either simply ignorant of the facts, or of unsound mind.

We’ve all come to the conclusion that sensible adults value not dying prematurely of preventable ailments, and we don’t need to be medical professionals to know that such a value statement is a good thing. We ought to value being alive, and nothing within medicine ‘scientifically’ justifies that. Finding right and wrong answers about medicine only becomes possible once we all agree that this is what we mean by ‘health’, and that we value it. The objectivity and scientific validity of medicine is never brought into question because of this foundational dependence on a ‘philosophical assumption’ though. So, by assuming that seeking out intrinsically positive conscious states, and avoiding negative ones, as our broad and loose goal set in the moral domain, we’re not doing anything different to the other sciences.

The second point on relativism speaks to the fact that different people or cultures talk about ‘morality’ in different ways. Things like ‘justice’ mean different things in different places, and even in the same place but at different times. It seems like we’re all zeroing in on the same meta-principles, but the devil is very much in the detail. Again, we can look at physical health as a useful analogy.

Take Jasmuheen, an advocate of ‘breatharianism’. She claims that she survived for years on very little to no food or water, but was nourished by “pranic energy” instead. Ostensibly, she’s talking about the same thing my local GP and dietitian are talking about, like ‘health’, ‘energy’, and ‘nourishment’. These are words they use too. What has science got to say about which version of health and nourishment I should value? Quite obviously, a lot.

When asked to demonstrate her claims for a TV experiment, Jasmuheen agreed to live in a hotel room, watched by a security guard to ensure she consumed no food or water, and was regularly monitored by a professional doctor. After 48 hours she was presenting symptoms of acute dehydration, stress, slurred speech, weight loss, and high blood pressure, to name a few. In other words, exactly what medical science predicts will happen if you stop consuming actual nourishment. After 4 days the experiment was abandoned on the advice of the doctor, as kidney failure and death were likely to follow, and the results were broadcast for everyone to see.

Who’s version of health should we value? Demonstrated by the physical consequences, consuming “pranic energy” isn’t as nourishing as terrestrial food and water. Notice that at no point are we obliged to humour Jasmuheen or breatharianism as offering a potential ‘alternative framework’ for physical health. It isn’t just about our opinions. The universe is not forgiving in this way; at least 3 incidents of breatharian followers died after trying to emulate Jasmuheen. The breatharian is talking about the same meta-principles, like health and nutrition, they’re just wrong about how to move towards them.

It isn’t dogmatic or imperialist to say that breatharianism is dangerous, and to point out the obvious; it is not conducive to health and well-being. We as a community, either directly or via the state, are perfectly able, if not obliged, to intervene with clear conscience, the same way we ‘dogmatically’ intervene and tax cigarettes, or vaccinate our children. Once we’re honest with ourselves about what our goals are, there will be evidence to suggest the best and worst ways of achieving them. Following the evidence wherever it may lead is anathema to dogmatism. If someone thinks their infant dying of preventable diseases is a good thing, we simply don’t have to take them seriously. Similarly, if they think exposing their baby to a dangerous disease is an alternative way to inoculate them, we don’t need to indulge their ignorance.

It’s important to notice that we all engage in this kind of empirical scepticism constantly; we’re all everyday empiricists. When I call a plumber to fix my pipes, it’s because I trust they have the relevant expertise to achieve the goal of ‘good plumbing’, i.e. flowing water out of my taps, and having no leaks. Knowledge of the facts of plumbing is what separates me from them. I don’t pretend to know an ‘alternative framework’ for good plumbing, nor do I argue with the valuation that good plumbing entails a lack of leaks. When my faucet spews water I don’t tell guests, “Who are you to say your plumbing is better than mine? To me, good plumbing is about water coming from as many places at once as possible”.

There is no difference when it comes to the domain of morality and the promotion of wellbeing; not all positions are equal. Others may be using the terms ‘morality’, and ‘well-being’. However, the question is not, “what do those things mean for them?”. If they don’t think morality has something to do with changing conscious states for the better, they’re like the weird plumber who values leaks, and we have to admit that openly. The more important question is, instead, “how well are those things working out for them?”. How satisfied are the weird plumber’s customers? On the other hand, if they do value conscious wellbeing, but they think systematically subjugating an entire gender is a possible route to that end, for example, they’re like the breatharian. They’re talking about the same meta-principles, but simply confused about the facts. Again, we have to admit this openly.

For EA’s, this is most relevant when the effective ways to do good are convoluted and counterintuitive. But just because these solutions are hard to find, or intuitively unpalatable, does not mean that there is no answer at all or that we shouldn’t try to find one. For example, an ethical shopper might avoid goods produced in sweatshops so as to not support the exploitative workplace practices. In Doing Good Better, William MacAskill explains that this is well intended, but is not the most effective way to help workers in developing nations, and can actually cause more harm than good. How? The sweatshop jobs are actually the most desired in some countries. The other jobs require hard labour and are lower paid, and for some the choice is between working in a sweatshop and unemployment. Boycotting sweatshops can eliminate these jobs. Furthermore, sweatshop goods tend to cost less than those produced elsewhere, so one is usually better off buying the sweatshop shirt and donating the savings to a charity that helps the poor. This is just one of the endless examples of counterintuitive ways to maximise well-being.

The Absolute/Objective Conflation

Emphatically, this is not to say that there aren’t or won’t be many equivalent ways to be moral, or to promote well-being. There is no ‘one’ way to be healthy, or to have good plumbing either. Similarly, in light of new evidence and technology, both those definitions could change in the future; they are not absolute. For example, living to a ripe old age of 40 was considered healthy in the past, but with further advances in modern medicine and gerontology, living to 150 could be a modest goal for many people alive today. It just amounts to admitting that once we declare our goals honestly, there are also many ways not to achieve them, and we don’t have to be afraid to admit this. What’s healthier, eating a cucumber or a stick of celery? The answer to this question, if there is one, is probably trivial. That doesn’t undermine the objectivity of dietetics and nutrition. The inability to decide which of the two vegetables to eat for breakfast doesn’t make the distinction between food and poison any less real or consequential though. That is, tough questions we can’t answer yet don’t relegate the easy answers to merely being ‘low hanging fruit’ in an otherwise incomplete or problematic theory. Depending on what they specifically eat, a meat eater may be just as healthy as a vegetarian (think vegetarians who only eat potato chips), but that doesn’t mean we have to elevate breatharianism to the same plane. Having many ways to eat healthily is pluralism, claiming every way of eating is healthy is relativism.

The same goes for morality. There could be many ways to restructure our societies to better promote well-being, but this doesn’t detract from the fact that there will also be many ways to do the reverse. Indeed, we already know that there are many ways to do the reverse; for example, humanity frequently engaged in the slave trade. Pluralism is not the same thing as relativism, nor is being objective the same as being absolute, or unchanging.

The Promise of EA

We don’t suffer any illusions of relativism in most domains of our lives because we value evidence. We update our confidence in particular beliefs to correspond with the weight of the evidence in favour of them. It is this incursion by the scientific method into the realm of morality that makes EA what it is, and allows it to speak from an objective viewpoint, despite its philosophical assumptions. We value subjective well-being as the basis of morality in the same way we value physical health or good plumbing, and the science of well-being can’t begin until we’re similarly honest about that fact. EA is honest about this, and the measurements have already begun.

The separation of science and measurement from the realm of values and morality is a language game we don’t often play. It will be to the detriment of the entire global population if we continue to play it with perhaps the most important question we can ever ask: how can we grow and flourish together, for the well-being of all conscious creatures and the planet that sustains them? There may be multiple right answers, but we have to unapologetically admit that there will be wrong ones too. EA is in a position to lead the way on an empirical project of well-being, it just needs to embrace it.

By Robert Farquharson and Michael Dello-Iacovo

How effective is face to face fundraising?

Recently I did some work for Charity Science on the effectiveness of a number of fundraising methods, with a focus on face to face (F2F) fundraising, which involves ‘door to door’ or ‘on the street’ solicitations for donations, with a focus on acquiring monthly donations. The benefits of monthly donations over larger, once off donations are they provide a steady stream of income that is more reliable, and can be used to maintain base operations in times of financial struggle when individual donations are thin.

I performed a brief literature review, and I have posted some of my notes below. If you are with a charity and are considering whether to undertake F2F fundraising, this may be a good starting point.

Reasons for lapse: The case of face-to-face donors (Sargeant & Jay 2003)

F2F fundraising experienced a significant amount of criticism in its early days. This paper concludes that donors are largely satisfied with the recruitment process and lapse mainly because of changing financial circumstances than feelings of having been pressured into supporting, despite media claims.

69% of survey participants were aware of the charity before the recruiter approached them, and 54% were familiar with their work. The paper concludes that this means there is a ‘substantial degree of brand awareness but rather less understanding of services and programs’. I disagree slightly with the wording here – while the sample size is high enough that the difference is likely statistically significant, 54% is not substantially less than 69%.

Over 60% of participants said that they agreed to talk to the recruiter because they were friendly and unthreatening. Lapsed supporters (those who has signed up for monthly donations but had since stopped) were significantly more likely to have been under some pressure of time than remaining active supporters.

Those that felt pressured into offering support were significantly more likely to lapse than those who weren’t, but this doesn’t necessarily imply causality (donors who would have lapsed anyway may claim they felt pressured). Those that were impressed by what the recruiter had to say were significantly less likely to lapse, but again, for the same reasons, this doesn’t imply causality. It is interesting to note that the difficulty and length of time taken to offer support did not appear to play a major role in reasons for lapsing.

The general consensus in the literature is that around half of donors recruited through F2F will lapse after 1 year, with an average length of support of around 5 years, which can be used to estimate your return on investment per donor acquired.

The paper says that F2F reaches a younger donor audience, but younger donors appear to show a higher lapse rate, partly due to lower average income.

Most donors appear to prefer quarterly communications from the charity. 14% of active donors state they would be happy to not hear from the organisations they support at all. It is interesting to note that lapsed supporters are significantly more interested in acknowledgements for their gift (23% compared to 13%). This may indicate that those donors who lapse are likely to care less about intrinsically doing good and more about getting some kind of recognition of their support. The majority of lapsed and active supporters (around 80%) prefer to hear about the work the charity undertakes, with less (around 55%) interested in how their money has been used in the past, and less still (around 25%) interested in other ways they can support the organisation.

Of the remaining active supporters, about 73% indicated they had about the same level of commitment to the charity compared to when they first started giving. This sounds low, but around 22% said they were more committed, compared to 5% that said they were less committed.

The most startling conclusion was that there is no significant difference between lapsed and active supporters in the trust they put in the charity. That is to say, trust does not appear to play a role in the reason for donors lapsing.

It was noted that, of the lapsed donors, about half expected that their support would last for a year or less when they first signed up. When asked whether they would support the charity again, 66% of lapsed supporters said that they would, which supports the idea that donors lapse primarily due to changing financial circumstances than anything to do with their feelings towards the charity. I would caution putting too much faith in this conclusion though, as survey participants like to rationalise their past choices and have incentive to lie in a survey to save face. People generally don’t want to say that they stopped donating because they decided they would prefer to spend the money on themselves, even in an anonymous survey.

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Applying relationship management theory to the fundraising process for individual donors (Waters, 2008)

This paper aimed to measure the relationships that non-profit organisations develop with their donors and examine the differences between levels of giving.

Major gift donors were more likely to have stronger trust, satisfaction and commitment with the organisation than the annual gift donors did. Donors who gave multiple times to an organisation rated their relationship with the organisation as being stronger than the one-time donors did. The paper appears to argue for more resources being spent on donor stewardship and relationship management strategies (including F2F and related activities) to increase donations. I’m not particularly impressed by the above conclusions, as they say nothing of causality. In a sense, it seems obvious that someone with stronger trust and commitment will be donating more to the charity. What would be more useful is a longitudinal study that demonstrates the effects of increasing levels of stewardship over time. In Waters (2008) (summarised below), there is more reference to the fact that increased donor relations and stewardship can result in increased donor loyalty, though I’m still not convinced on causality.

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Factors influencing the break even probabilities of agency recruited low value charity donors (Bennett 2013)

This paper examined the factors that may affect the likelihood of a donor recruited through F2F reaching the financial break even point within a certain period of time, defined as the point when a supporters total donations exceeded the recruiting agency’s fee, induction costs and annual donor maintenance costs.

Interesting to note that apparently a number of agencies refund a proportion of their fee if a donor cancels within a certain period, usually 12 months (Sargeant & Hudson 2008), which should improve the economics of such a test.

“In 2009, the average value of each standing order acquired through F2F agency employee solicitation was 90 pounds per annum (Quigley 2010), while the average fee paid to external agencies varied between 80 and 160 pounds per donor (Jones 2010).” Other costs the client charity incurs include the costs of printing and mailing a welcome pack to the new donor, processing the standing order, entering the donor into a database, phoning them, printing and mailing regular newsletters etc. According to the paper, it seems that, even for a 5 year donor, the costs can quickly add up to a loss for the charity.

According to the Professional Fundraising Regulatory Association (PFRA 2011), the fee paid to an external agency will be recovered within 8-16 months on average if a new donor can be persuaded to give 10 pounds a month. Including additional costs, the expected break even point is 26-28 months.

Another consideration is that regular donors may be more likely to make additional ad hoc contributions such as donations in response to direct mail/email appeals or other requests and donations. On a related note, according to Fleming and Tappin (2009), a lower value of monthly contribution for a donor is correlated with a higher rate of retention.

The author suggests that the conversion of low value regular donors into higher value supporters is a critical field of research, but one that has not been covered to date.

According to Sargeant 1998 and Aldrich 2000, regular donors rarely support a charity for more than 6 years, possibly due in part to one becoming ‘overfamiliar’, bored or disinterested with the charity, which is an interesting claim.

One concern with asking people to just give a small amount is that it may make people less likely to donate a lot, and can remove feelings of guilt one might have about declining a tougher ask (MacQuillin 2011).

The paper advocates segmenting a charity’s donor relationship management policies to better target and serve low value donors. “The present study demonstrated that many of the low value supporters most likely to break even within 4 years and/or to uplift their standing orders shared certain characteristics; notably a strong sense of obligation, relationship proneness, involvement with the charity’s cause, low personal inertia, satisfaction with the charity, willingness to accept incentives, and a tendency to experience ‘warm glow’ when making donations.”

Therefore charities can implement measures to specifically nurture these tendencies for low value donors. An example might be making it easier for people who donate for ‘warm glows’ to feel the warm glows, e.g. “via the transmission of profuse congratulatory messages when issuing thanks for gifts.” When asking for extra money, thanking donors for being ‘compassionate’ can increase gifts by as much as 10% (Hudson 2011).

Incentives such as invitations to parties appear to be effective ways to increase donation levels, which suggests that investment into these incentives may be worthwhile. Examples of such incentives can be found in Bennett 2007.

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Benchmarking charity performance: Returns from direct marketing in fundraising (Sargeant et al 2006)

The paper presents the results of a study of 150 UK charities, and indicates the ROI that can be achieved through each of the marketing tools/techniques used. They suggest that most charities lose money on donor recruitment activities and that the overall returns from direct marketing activities are comparatively low compared to other forms such as major gift, trust and corporate solicitation, which, according to the paper, “can often generate over 10 pounds for every 1 pound of investment. (see Sargeant and Kaehler 1999)”

Door drops and off-the-page advertising perform poorly in terms of ROI compared to alternative media. Direct response TV appears promising, but has a high cost per donor which reflects the high levels of up-front investment.

F2F cost per donor compares favourably with other cold recruitment strategies and promotes longer-term committed giving.

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Measuring stewardship in public relations: A test exploring impact on the fundraising relationship (Waters 2009)

This paper suggests that donors favour reciprocity (gratitude of charity for donations), responsibility (keeping promises), reporting and relationship nurturing, and that they have a significant impact on how donors evaluate their relationship with the charity. Spending more time on donor relations and stewardship can result in more donor loyalty according to O’Neil (2007), though I’m still not convinced on the causality here.

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Conclusion

Overall, F2F fundraising is a good way to build public awareness of your charity and develop a base income and group of supporters, though the returns are generally lower than other forms of marketing such as major gift, trust and corporate solicitation.

If you have any thoughts or comments, feel free to leave them below. If you’d like a more targeted analysis of fundraising for your charity, please get in touch and I’d be happy to help out.

References

Aldrich, T. (2000). Reactivating lapsed donors: A case study. International Journal of Nonproﬁt and Voluntary Sector Marketing, 5(3), 288–293.

Bennett, R. (2007). Giving to the giver: Can charities use premium incentives to stimulate donations? Journal of Promotion Management, 13(3/4), 261–280.

Fleming, M., & Tappin, R. (2009). Face to face donor cancellation rates (attrition): Establishing a benchmark. International Journal of Nonproﬁt and Voluntary Sector Marketing, 14, 341–352.

Hudson, S. (2011). Telling donors how much others have given brings in more. Third Sector Online,6 July 2011. Accessed August 24, 2011, from www.thirdsector.co.uk.

Jones, M. (2010). Charity donors ‘pay fundraisers’, BBC News, 26 August 2010. Accessed August 25, 2011, from http://news.bbc.co.uk.

MacQuillin, I. (2011). A nudge in the wrong direction, UK Fundraising, 9 June 2011, pp. 1–5. Accessed August 18, 2011, from www.fundraising.co.uk.

O’Neil, J. (2007). The link between strong public relationships and donor support. Public Relations Review, 33(1), 99–102.

Professional Fundraising Regulatory Association (PFRA). (2011). Face to face fundraising. London: PFRA. Accessed August 24, 2011, from www.pfra.org.uk.

Quigley, R. (2010). Revealed: how fees for high street ‘chuggers’ are eating up the millions you donate to charity. Mail Online, 27 August 2010. Accessed August 25, 2011, from www.dailymail.co.uk.

Sargeant, A., & Hudson, J. (2008). Donor retention: An exploratory study of door to door recruits. International Journal of Nonproﬁt and Voluntary Sector Marketing, 13(1), 89–101.

Sargeant, Adrian and Juergen Kaehler (1999), “Returns on Fundraising Expenditures in the Voluntary Sector”, Nonprofit Management and Leadership, 10(1), p.5-19.

Sargeant, A. (1998). Donor lifetime value: An empirical analysis. Journal of Nonproﬁt and Voluntary Sector Marketing, 3(4), 283–297.

Why I became an Effective Altruist

My story

Over 2015 I’ve become increasingly involved with a social movement called Effective Altruism. Inspired by a friend who recently wrote a post about how and why she became an Effective Altruist, I decided to do the same. Let me take you on my whirlwind journey over the last 12 months.

Since late 2012, I decided that I wanted to dedicate my life to making the world a better place. I didn’t want to just make it a little better, I wanted to go all the way. I decided the best way for me to do that was to finish my degree in geoscience and work my way up through the energy industry, changing the environmental practices from within. I finished in 2014, and was hired straight out of university. My employers told me I could start as soon as I liked. I’d been thinking about going on a volunteer trip for a while, and decided to do that before I started working, as it may be my last chance. I went to Nepal for 5 weeks, where we built a medical centre. My attendance on the trip cost me around $5,000 including flights and expenses.

Some part of me started to feel uncomfortable. Something didn’t seem right. I would be making over $7,000 a month in my new role. Wouldn’t it make more sense to start working straight away and donate my earnings, which would pay for someone else to do the same work, and then some? A lot of people told me I was crazy, and I believed them for a while.

I finally found a TED talk by Australian moral philosopher Peter Singer which really resonated with me. I realised there was a whole community of people who thought as I did, that sometimes the best thing to do is a little unconventional, but that it should still be done.

Wanting to get involved, I sent Peter Singer an email asking how I could. Being such a famous and important man, I never expected a reply. 30 minutes later, for some reason I decided to check my junk mail (which I never did, but now always do). Imagine my surprise when I saw a very prompt email from Singer suggesting that I start up the first Effective Altruism chapter in Adelaide. I was put in touch with Louise Pfeiffer, who had just moved to Adelaide from Melbourne and was involved with the EA chapter there. We quickly got to work and founded The Life You Can Save Adelaide chapter.

What is Effective Altruism?

By now you might be wondering what Effective Altruism actually is. It’s a large and decentralised movement, so the definition varies. But in my mind, an Effective Altruist is someone who:

Is open minded about the most effective ways to do good. Once they find the most effective ways, they do them.

For some, this means aiming to earn a high salary to donate as much of it as they can to the most effective charities and causes. For others, it might be doing direct work for particular causes, such as research into the most effective charities or starting a highly effective non-profit. A common theme is that EAs often pledge to donate a percentage of their income. I myself have pledged 12% of my income, though I hope to give a lot more.

I haven’t pledged higher because some part of me wants to one day start my own company, and potentially make and give even more money. Some donate a kidney to strangers. Zell Kravinsky, who donated a kidney to a stranger, said:

“Statistically, it’s a 1:4000 chance that I will die from the procedure to donate the kidney that I do not even need. Therefore to withhold a kidney from someone who would otherwise die means that I value my life 4000 times more than them.”

There are a lot of other considerations which make the calculation less simple than that, such as risk of chronic complications from a kidney donation that don’t lead to death, or the chance that the kidney won’t take. In any case, I haven’t donated my kidney, and I’m not sure that I will. But there are a lot of other ways that people can do good, at significantly less risk to their own safety.

GiveWell is an organisation that rates the effectiveness of charities (often called a ‘meta-charity) and produces a (small) list of the world’s most effective charities. Of those rated so far, the most effective, the Against Malaria Foundation, is considered to be so good that a donation of $3,400 will save 1 life on average. AMF provides anti-malarial bed nets to rural locations to reduce the incidence of malaria.

Conclusion

Over the year we’ve given presentations about Effective Altruism to over 100 people, and will be giving many more in the new year when our Run for Effective Altruism kicks off in April. (If you’re in the Adelaide region and want us to give a presentation to your community group or business, get in touch!) Some people believe that you can’t spend most of your life working for others without being miserable, but I’ve never felt more happy and fulfilled. I paraphrase Charlie Bresler, co-founder of The Life You Can Save here, and it’s a little cheesy, but it’s true.

“The life that I saved was my own.”

So do I regret going to Nepal? It was an incredible experience – I met a lot of great people, learned a lot of things and had a lot of fun. In hindsight, the decision between working and volunteering wouldn’t have been easy. The value was probably more in the personal development side of things than the work I was actually doing, though it was still good and important work. Unfortunately, since I was in Nepal there has been a series of major earthquakes which devastated the country. Many of the buildings in the village where I was working have fallen down or been damaged. While disaster relief is not as effective as some other causes, like poverty relief, due to my high paying job I was able to donate a significant sum to Oxfam who were the most effective charity doing aid in Nepal, and likely did more good through that than if I had returned to help.

Doing Good Better book review

For anyone sleeping under an asteroid lately, a new movement by the name of Effective Altruism is slowly taking the world by storm. Put simply, EA involves thinking critically about which causes and charities to support. It may seem strange, but the differences between charities can be enormous, and it’s not just about overhead and transparency.

For example, it costs around $40,000 AU to train a guide dog to care for a blind person. Giving a person the ability to get around is a great thing to do, but a $60 donation to the Fred Hollows Foundation is enough to cure someone of blindness in a developing nation. For the cost of training one guide dog, we could cure over 600 cases of blindness. For some, this raises concerns about whether it’s ok to say one charity or cause or life is worth more than another. But in reality, by not undertaking this comparison, you are saying that one life is worth more than 600 others. We have a remarkable opportunity to save a lot of lives by just changing how we think about charity. If you’re still not convinced, I gave a presentation about this recently which introduces these ideas.

This year has seen a number of Effective Altruism books being released, including The Most Good You Can Do by moral philosopher and co-founder of EA, Peter Singer, which is a good introduction.

I recently finished reading Doing Good Better by William MacAskill, which dives into some of the less obvious ways that people can maximise the good they can do throughout their lives. I’d like to take a bit of time to summarise the key themes of this book and give my thoughts.

Will MacAskill. Image taken with permission from http://www.effectivealtruism.com/press/.

One new idea floating about is that it’s possible to do a lot of good by working for a company that might typically be seen as unethical, such as a bank or finance company, rather than working directly for a non-profit. This is because, by working for a non-profit company, you are likely taking the job from someone else, almost as equally skilled as you, and so the marginal good you do is small. However, by working for a bank, you could earn a high salary, which you can donate to an effective charity. If you earn enough, you could donate enough to pay for the salary of several non-profit staff that otherwise wouldn’t have had jobs if you didn’t donate that money. EAs call this ‘earning to give’. That’s not to say that everyone should drop everything and work for the most evil corporation to earn a lot of money, just that it is another option. Some causes, like artificial intelligence research, are more talent constrained than funding constrained, so in some cases working for a non-profit is still better than donating to them.

One activity that is often seen as a way of ‘greenliving’ is buying local produce, but unfortunately, the benefits of buying locally are often overstated. On average, only 10% of the emissions from food come from the transport, while 80% comes from the production. The effect of this is so strong that it is more effective to cut out red meat and dairy of one’s diet one day a week than to buy entirely locally produced food. This isn’t to say that buying local isn’t a good thing to do, just that there are easier ways to reduce one’s carbon footprint. This counterintuitive nature is a common theme with reducing carbon emissions. Leaving a phone plugged in for a whole year is equivalent in carbon emissions to having one hot bath, and leaving the TV on for the year is comparable to driving a car for just two hours.

MacAskill proposes an even more effective way of reducing emissions. Carbon offsetting involves paying someone to reduce or avoid carbon emissions or to capture carbon, for example planting a tree. This isn’t a new concept, though one carbon offsetting charity, Cool Earth, is particularly effective at this. Using analysis by William MacAskill and 80,000 Hours, even with the most conservative estimates it would only cost around $135 for the average Australian to offset their carbon emissions – for a whole year.

People often tout catching a train as being a more environmentally friendly way to travel between cities. However, trains are usually significantly more expensive than flights for long distance travel, so you’re almost certainly doing more good for the environment by flying somewhere and donating even half the savings to a carbon offsetting charity. Not to mention the time you’d be saving, which if you were serious, could be used to do even more good for the environment.

MacAskill also discusses the possibility of offsetting one’s meat consumption. Charities such as The Humane League distribute advertising material to convince people to eat less meat, thereby reducing animal suffering and environmental damage. It costs about $100 to convince someone to stop eating meat for one year (or the equivalent reduction over multiple people). If this is the case, would it be possible to donate $100 to such a charity rather than go vegetarian, and be able to say it’s the moral equivalent? What if you donate $200 a year, but eat meat. You’ve essentially convinced two people to be vegetarian for the year. Is that better than eating meat but not donating?

Permission for use of image granted by The Humane League.

MacAskill’s conclusion is “I don’t think so. There’s a crucial difference between greenhouse gas emissions and meat consumption: if you offset your greenhouse gas emissions, then you prevent anyone from ever being harmed by your emissions. In contrast, if you offset your meat consumption, you change which animals are harmed through factory farming. That makes eating meat and offsetting it less like offsetting greenhouse gas emissions and more like committing adultery and offsetting it, which we all agree it would be immoral to do.”

I’m not completely convinced by this. Let’s try a thought experiment. Say that being vegetarian costs an extra $500 a year compared to eating meat, due to the food being more expensive (to be clear, it’s not, a vegetarian diet can be substantially cheaper). You might have two options. Option A is to eat meat, save $500 and donate it to an effective animal advocacy charity. Option B is to be vegetarian, thereby losing the $500 you might have otherwise donated. Would it really be acceptable to take option B and let so many more animals die because you refuse to eat meat? Now this is just the trolley problem. You’re changing who lives and dies in that situation to minimise death, so why not this one?

Now let me be slightly contradictory and say that, while I think eating meat and donating $100 to The Humane League would be morally equivalent to being vegetarian, I don’t think that really excuses the meat consumption. We’re not in the world of this thought experiment, so ideally one should be vegetarian and donate to effective charities. Foreseeing potential criticism, I myself am vegan and donate to The Humane League.

Related to this are vegans who regularly go out for fancy meals. If you are spending $500 more than you reasonably need to on meals per year, I would argue that is potentially less ethical than a meat eater who only eats cheap meals and donates $500 to The Humane League every year. Morality doesn’t begin and end with whether or not you eat meat. But after all this, I still believe that eating less or no meat is one of the easiest ways people can change their lives to do a lot of good. I appreciate that this is all quite controversial, so I invite you to leave your thoughts or criticism in the comments below.

On a related vein, MacAskill argues that ethical consumerism probably isn’t as good as we think it is. If it costs $30 to buy an ethically produced shirt, and only $5 to buy one produced in a sweatshop, you’re probably doing more good by buying the sweatshop shirt and donating the $25 savings to an organisation that advocates for workers rights. In fact, it’s widely agreed by economists that sweatshops are, overall, good for poor countries. They are steady sources of income for many people in developing nations, and they probably wouldn’t otherwise have jobs. By boycotting sweatshops, we just make things worse.

In Will’s words, “We should certainly feel outrage and horror at the conditions sweatshop labourers toil under. The correct response, however, is not to give up sweatshop-produced goods in favour of domestically produced goods. The correct response is to try to end the extreme poverty that makes sweatshops desirable places to work in the first place.”

When it comes to choosing a career, Will cautions against ‘following your passion’, which is a common piece of career advice. This is bad advice for two reasons. One is that most people don’t have passions that fit the world of work. The second is that your interests change. It’s ok to realise after finishing a degree or working in a career for 10 years that it’s not what you really enjoy or are good at, and to move on. The idea that people should know what they want to do for the rest of their life by the age of 18 is ludicrous.

Considering the amount of time people spend working over a career, they spend comparatively little time thinking about what the best career for them really is. An organisation called 80,000 Hours is seeking to combat this by providing advice on finding personal fit for a career and reviewing careers for how much positive impact people can have within one. 80,000 is the number of hours the average person will spend working, yet most people spend substantially less than 1% of that time thinking about their career itself.

The 80,000 Hours team. Image taken with permission from https://80000hours.org/.

Doing Good Better talks about so many things that I could never cover them all here, but hopefully I’ve given you a taste. I highly recommend it, and look forward to hearing your thoughts.

Until next time.