Tag: sales

Is Effective Altruism Funding Constrained? A Case for Fundraising

Correction: I wasn’t 100% clear on the definition of funding constrained. I stand by my claim that EA orgs should at the margin think about fund raising more.

Is Effective Altruism Funding Constrained?

I posed this question to few folks at EA Global 2018 and got almost exclusively “No’s” in response. Many claimed that charities that work on AI risk are talent constrained— for example they weren’t sure MIRI could hire many more people if their funding 5X’d. I made the counterclaim that surely GiveWell was funding constrained, and was told that they weren’t because of their relationship with Good Ventures and OpenPhil. I’m not sure this is the case.

Good Ventures started with an endowment of $8.3 billion, which is no doubt a lot of money. Annual giving to US charities alone is approximately $400 billion. So even if GV/OpenPhil/GiveWell gave away all of that money tomorrow, EA giving would amount to less than 5% of annual giving by US charities.

Perhaps taking this relative approach isn’t exactly what EAs normally mean when they say funding constrained. But considering that the United Way—the largest charity in the US—gives away $3.5 billion per year, it’s probably time to start considering how to take share from organizations with good intentions but bad execution.

Fundraising likely receives too little attention from EAs because many are more technically oriented and fundraising feels at best fluffy and at worst like sales and marketing. As anyone who has worked in an engineering culture knows, sales is not respectable, at best it’s a necessary evil. Marketing is where buzzwords come from. Given these sorts of aesthetic predispositions, it’s not that surprising EAs have neglected trying to take share from less effective organizations.

But that doesn’t mean it’s the optimal strategy. Especially considering the low hanging fruit of simply copying the most effective fundraising strategies that look a lot like B2B enterprise sales motions. There are strategies that look more like marketing than sales which I may explore separately, but given the cost of sales is predominately time this is a place where EAs with sales aptitude could put in direct work and generate big results.

What Effective Fundraising Would Look Like

Direct Corporate Social Responsibility

Many Fortune 500 companies give away lots of money to causes that are somehow connected to their business and the communities they work in. These large causes have to be approved by very senior executives who are used to making decisions based on businesses cases that show ROI. Winning over CHROs and then the rest of the executive team would by no means be easy. Based on experience I’d guess it would take over a year of conversations.

The initial step would be to have folks with sales aptitude to try to book appointments with junior folks in a few target firms’ Corporate Social Responsibility departments and have big names from EA organizations give presentations.

Indirect CSR

Most F500s have some list of approved charities that they’ll match donations to. The list was created so that there would never be a PR scandal about an organization accidentally matching a donation to a terrorist group or similar. The strategy here would be to first get on those lists, but then to also try to shape criteria going forward for other orgs to get on the list (and perhaps for staying on the list). Those criteria would include effectiveness metrics to benefit EA orgs and steal share.

Government Grants

Getting government grants is a sales process I’m mostly unfamiliar with, but lots of people are and USAID gives away lots of money that EAs aren’t accessing right now.

Why Take Market Share?

EAs may generally be underconfident about their ability to deploy more money effectively, but surely we should be more confident that we can deploy a large share of global charitable giving more effectively than the least effective decile of charitable dollars which are actively harming people and communities. Additionally, creating a fundraising side of EA gives folks with sales and marketing aptitude a role in the community outside of earning to give. On the whole, taking market share from ineffective organizations would at least reduce harm caused, create new opportunities for EA orgs to deliver today, and more optimally utilize the human capital of the EA community.

 

Why All New College Grads Should Try Sales

As college seniors who don’t yet have job offers and don’t know what to do with their lives start the annual gauntlet of getting their first real job, I have a suggestion that is broadly applicable and will lead to above average outcomes:

Go work in sales at a Fortune 1000 company.

Reasons why:

You don’t know what you want to do.

Good, sales jobs don’t require you to know how to do anything specific except have structured conversations. College students who don’t know what they want to do tend to go into finance, consulting or law, so your competition is less fierce.

All jobs require some amount of sales skills.

Want to get anything done in a large organization—you have to sell it, so the skills you learn in your first sales job will translate into any job you have afterwards.

Things about large sales orgs:

They hire a lot.

Large sales orgs hire hundreds or thousands of entry level salespeople per year. Your odds are simply better at getting a sales job than they are for any other function.  

They aren’t looking for experience.

Sales orgs won’t be looking for job experience. A lot will privilege sports or club leadership experience, but they know you won’t have sold before.

There’s a lot of training. Way more than anywhere else.

Since they know you won’t have any experience, sales orgs are one of the few places that spend a lot on training recent college grads. When you look at learning and development budgets for F1000s, there are two major categories: sales training, which goes primarily to salespeople like you, and leadership training, which goes to people with 10+ years of experience.

How it could work out:

Some people are naturals.

Here’s the good news: if you’re naturally great at sales, then you now have a job that you’ll find easy and enjoy. You’ll likely be on the fast track to leadership.

A lot of people can get good.

Not naturally a rockstar? That’s ok! Lots of people get good because of the massive investment F1000s put into developing sales skills.

It’s highly compensated.

If you’re good at selling, regardless of how you became good, you’ll make in the low six figures consistently. Sales compensation follows a power law, so if you’re really good you can have a $1m year before you’re 35.

If it doesn’t work out:

You’ll learn at least two businesses deeply.

You will have learned the business of your employer AND you’ll know the ins and outs of your customers’ business. Consider your time spent in sales as a hands on Intro to Business course.

You’ll learn to fail.

A lot of smart college kids have never really failed at anything. Entry level sales gigs give you the opportunity to fail on a daily basis. And if you aren’t succeeding in the role, you’ll now have experience of slowly failing at a relatively important thing.

You’ll have a foot in the door to a large org.

This organization has spent a lot of time and money on you already, they’d certainly prefer to rotate you into a position where you can be successful. This will likely be in marketing or customer success.  

In the end:

You’ll either find a highly paid job, a different job at your employer or customer, or at the very least will have bought a year or so of getting paid reasonably well to figure out what you want to do with your life. It beats freelancing or waiting tables.

Why Firms Are Relying More On Inside Salespeople

The topic of a recent piece I wrote for BTS, reflects the fact that the division of labor, specialization and ops research is making its way to sales–a function often enthrall of itself as more art than science.

Firms are shifting to inside sales because their customers want it—many buyers prefer to communicate over the phone and email, are used to handling meaningful business virtually, and don’t want the interruption of a sales rep coming to their workplace.

On the organizational side, through specialization and lack of unnecessary travel time, sales organizations see big productivity gains. Inside sales reps are able to spend a higher percentage of their time having meaningful selling conversations with customers, and any field reps that remain can focus on those buyers and deals that really do require face to face interactions and skip those that are unwarranted (or even unwanted).

Read the whole thing if you wonder how it’s different than the traditional inside/outside split, want to know what will happen to field reps, or want to do this for your own organization.