EA - A short comparison of starting an effective giving organization vs. founding a direct delivery charity by Joey

Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: A short comparison of starting an effective giving organization vs. founding a direct delivery charity, published by Joey on January 11, 2024 on The Effective Altruism Forum.CE has recently starteda new program to incubate Effective Giving Initiatives (EGIs). Although this is a sub-category of meta charities, I think it has some interesting and unique differences. I expect a decent percentage of people who are interested in the Effective Giving Incubation Program are also considering founding a charity unrelated to effective giving, so I wanted to write up a quick post comparing a few of the pros and cons of each - as I historically have had a chance to found both.A brief historyAbout ten years back, I co-founded Charity Science (later renamed Charity Science Outreach) to raise money for effective charities that had extremely limited marketing and outreach. We used GiveWell and ACE recommendations, selecting AMF and THL specifically as the targets. We did several experiments, diligently keeping track of the results of our time spent and the results.After a couple of unsuccessful experiments (e.g., grant writing, which raised ~$50k in 12 FTE months), we hit some successes with peer-to-peer fundraising (e.g., supporting people donating funds for their birthdays). Depending on how aggressively you discount for counterfactuals, we raised a decent amount of money (in the several 100,000s). Although this was pretty successful, we pivoted to founding a direct charity where our comparative advantage was strongest and could bring the most impact and handed off the projects.Eight years ago, some of the same team members (and a few new ones) founded Charity Science Health. This was a direct implementation charity focused on vaccination reminders in North India. We got a GiveWell seed grant and became a reasonable-sized actor over the course of three years, reaching over a hundred thousand people with vaccination reminders at a very low cost per person (under $1).The trickiest part of this intervention was to (cost-effectively) get the right people to hear about the program, as the signup costs were about 70% of the entire program cost, and targeting was extremely important. A few interventions we tried did not work (mass media, government partnerships), and a few worked well (hospital partnerships, door-to-door surveys). This project eventually merged with Suvita after the founders left to run other projects (including Charity Entrepreneurship itself).In many ways, I feel starting an effective giving org was very useful for later starting a direct implementation charity, as many of the skills overlapped, and it was a less challenging project to get off the ground. In the rest of this post, I'd like to pull out the main takeaways that can be learned from these projects and would be cross-applicable to those considering both career options.Odds of successFounding any project carries a risk of failure. Failure in the case of an effective giving org would most commonly mean spending more than what gets raised for effective charities. Failure with a direct NGO can result in the people you are trying to help being harmed, making the stakes higher and there being more of a downside. In general, founding an Effective Giving Initiative I would expect to have higher odds of success. There are just more points of failure for a direct NGO.It could struggle with fundraising (an issue equally important in EGI) and implementation even if fundraising succeeds. In my view, this, among other factors, makes EGIs have higher odds of success than direct NGOs.Net impactThe net impact is tricky to estimate, as the spread is considerable, even within pre-selected CE rounds. This also means that personal fit could overrule this factor. My current sense is that a direct charity has a higher...