TLDR: The shortest version of this argument is very simple: your expectations for an organization should be higher where their budget and staff size are higher. In other words, we should have different expectations for a 20-person organization with a $1.5 million budget than a 2-person $150,000 budget organization. 

While this seems pretty clear in the abstract, I find that people tend not to update nearly enough on this when they should. For example, I often see people comparing the total research output of two organizations, yet when I ask about it, they will not know the yearly budget or staff size of either. This is a big problem. As a movement, we want to support efficient and effective organizations, not just organizations that are the biggest, most salient or currently the highest funded.  
 

Budgets and staff

When considering how impressive an organization's output is, one useful framing is the following:

1) What has this organization accomplished over the year (perhaps pulling this information from an annual report)

2) How much budget and how many staff would I expect the organization to need to do what they are presently doing.”

It is easy to then look up an organization’s budget or staff size and adjust your conclusions accordingly. If the budget and staff size are much lower than expected, you end up being impressed with the organization. On the flip side, if the organization and its budget are much higher than expected, it makes sense to be less impressed with the organization. Budgets are often public or findable, as are the organization's activities over the last year, so it is quite possible to compare them. 

To pick on my own organization as an example, you could think about the actions and activities of Charity Entrepreneurship/AIM over the last year. Most significantly, we’ve launched ~13 charities, built out our 2 other new programs (grantmaking and research training), and laid the foundations for a fourth program (our Founding to Give incubator launching early next year). 

Intuitively, what might you expect a reasonable budget and/or staff size to be in order to accomplish this work? You do not need to have an amazing sense of organizational budgets to do at least a rough estimate. I am pretty sure that if AIM/CE achieved these outcomes with an annual budget of $100k, everyone would (rightfully) think that is an amazing deal, and perhaps one that is too good to be true. On the other side, if it cost us $20 million, I expect people would generally (again rightfully) be a lot less excited. 
 

Comparative size

Another way to get a sense of this is to look at comparative size. If you have a bunch of donation options you are considering, you can map out their comparative size and think about how they directly trade-off. 

For example, let’s take a hypothetical funding proposal I receive for something costing $450k. I know the average seed grant for the CE incubated charities is about  ~$150k. This means that a useful way of assessing the value of the funding proposal is to think of this as the equivalent of three seed grants. Thinking about the proposal in this way is crucial: it’s easy to compare two funding applications 1:1, or at least not adequately scale expectations with the scale of difference in funding ask. If I was not careful, I think my default would be to compare that $450k application 1:1 vs one of the seed grants when this is not the accurate point of comparison at all. This is true even if I am only covering a portion of the funding, as the net funding is still typically pulled from sources that fund other promising projects. This difference in expectation can be even more dramatic with organizations that have budgets that are different by orders of magnitude. 

In theory, organizations with ~2x the budget should produce about ~2x the output. There are, of course, reasons in practice to believe that output does not scale quite so linearly with increases in resources. However, these reasons crucially fall on both sides of our possible expectations, suggesting a linear increase in outputs is a reasonable base expectation. Perhaps cofounder staff tend to be stronger than later hires, thus resulting in less output per budget with bigger organizations. On the flip side, principles of specialisation and economies of scale from the for-profit world suggest we might expect growth in outputs to outpace increases in budget size.
 

Why this matters

Personally, I tend to find that smaller organizations are effectively penalized by people not really having a sense of what the costs of a given organization are in comparison to each other, or not adequately factoring in this information when comparing outputs. 

Grantmakers and donors being more sensitive to organizational size could lead to a more effective marketplace for donations. I’d expect people's exact judgments on how growth output and resources correlate will vary a lot depending on breadth vs depth intuitions and several other such differences. Regardless, having more direct comparisons and explicit consideration of resources relative to impact should lead to more informed donation choices.  

P.s. If you found this interesting, you may want to check out Ambitious Impact's Impactful Grantmaking Training Program or our Charity Start-Up Incubation Program.