Rational Altruist

Adventures of a would-be do-gooder.

Category: Philanthropy

The best reason to give later

I’ve written about saving vs. giving before, focusing on the issue of interest rates vs. returns on good deeds. But for now, I think there is a much more compelling reason to save: there is a very good chance that the best giving opportunities we can identify in the near future will be better than the best giving opportunities we can identify this year.

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What is the return on giving?

Suppose I have $1 to spend and I want to use it to make the world as rich as possible.  How far can my dollar go? Can I use $1 to to make the world $2 richer? $50 richer? $1000 richer? It’s hard to know what to even expect a priori, and people seem to have widely varying estimates. Let’s call this figure the return on giving. This seems like an important number, and I’ve seen lots of implicit speculation. I think it would be great to have much more explicit discussion, though it seems worthwhile to first clarify what exactly we are talking about. Read the rest of this entry »

The efficiency of modern philanthropy

Summary: The most important inefficiency in philanthropy may be the philanthropist’s desire to make decisions that look good in retrospect.

In financial markets, if you encounter an investment opportunity which looks like it will significantly outperform the market, it is reasonably safe to conclude that either (1) finding the opportunity required some special ability, info, disposition, or connection you have that others lack, or (2) you are mistaken about the goodness of the opportunity, or there are associated costs.

We might ask: to what extent is the same thing true in philanthropy? If it looks to me like a cause is obviously important, but others are ignoring it, does that mean that I’m overlooking something they know? Of course, there is a spectrum of possibilities. In general I should ask: how hard should I expect to have to search before I can expect to find something important that others have overlooked?

Holden from GiveWell has recently commented on this question. His conclusion, roughly, is that while there are probably still neglected high-impact causes, you should expect to have to do a lot of effort to identify them. In particular, one can’t appeal to simple a priori arguments about what people are likely to miss and expect to thereby find great neglected opportunities. Read the rest of this entry »