Why Donate to Charity
I do high-leverage work. That is finance speak for “I know which keys to press on the keyboard in the next week that will slightly improve the lives of 20,000 people for a few years.”1 And I’m very happy I currently work on a product that allows me to say this with a straight face.
I’m not unique in this – software development is a high-leverage job. It’s really cool. It also means we get paid a lot for it. I used to think that high-leverage workers deserve to be more generously rewarded for their time, but I’ve come to wonder how true that actually is.
- I would not be able to do what I do were it not for thousands – or millions – of other people doing the low-leverage work that provides the fulcrum for my work. It’s society that allows me to do my high-leverage work, so why should I personally collect the pay check for it?
- Also I won the genetic lottery to have the interest and intellectual capacity for this work. Is that something I should be rewarded for? Or is it an unfair advantage that other people should be compensated for not having? There’s nothing about my personal efforts that has given me this advantage.
- Not to mention the safe, liberal, and relaxed upbringing and education that allowed me to reach this potential. That’s another gift from society to me. Should my response be to not repay? To hoard the rewards alone?2 Sure, I pay taxes, and for a while I considered that to be enough. But I have come to a point where – despite the high taxes of my jurisdiction – I still feel like every month I have more left over than I actually deserve.
To some extent, the system we live in is shaped around this structure. I want to provide nice things and financial stability for my family, so I can’t just give away most of what I earn. And I don’t know what the right fraction to give away is.
But I do know it’s not 0.0 %. So I picked a number slightly higher than that to get started. If you’re well paid, you should too. I’m not trying to advocate any particular type of charitable donation – any donation is better than no donation. But I will say that the people at GiveWell make it very easy to donate to high-impact organisations.
Don’t think. Just start. Pick the first charity that pops into your head and set up a monthly donation. If you don’t know how much to give, start with 0.1 % and feel your way up from there.
Starting is the difficult bit. You have plenty of time to think about details after you have started.
Okay, so you you have started now?
Oh, not yet? Stop reading and start now. Then come back.
Once you’ve started (but not before that), there are some details that are worth thinking about:
- It can be beneficial from a tax perspective to go through local organisations. For example, Ge Effektivt are just as easy as GiveWell but provide a tax benefit for Swedish taxpayers – which you can think of as freeing up more money to donate to causes you have evaluated as worthwhile.
- Although 0.1 % is infinitely better than nothing, I suspect for most of my target audience it is a trifling amount. Do consider jumping up to 0.5 %, or 1 %, or 5 % as soon as you’re comfortable with the 0.1 %.
- When it comes to helping people or animals or the climate or whatever your deal is, there are still plenty of low-hanging fruit around.
The consequences of the last point aren’t obvious, and deserve elaboration. We aren’t used to evaluating the effectiveness of organisations because the market (i.e. institutional investors chasing high returns) tends to quickly take out the low-hanging fruit. This is not true for the business of helping the world.
In terms of charitable activities, this might mean looking for charities that are
- Focusing on problems that are cheap to solve;
- Use data to guide their methods;
- Have a good relationship with the key enabling people in the field;
- Do things that are easy to scale3 I.e. an additional dollar of donations gets an additional dollar of work done; and, obviously
- Don’t waste money on administration, outreach, etc.4 Don’t get me wrong. Of course the administration needs to be paid – it just doesn’t need to be bloated. Also outreach is fantastic, but I get a little upset when people don’t know their favourite charity is primarily a marketing organisation, and only secondarily help the world. Again, it’s great that those organisations exist, but they should be more honest about it.
These are some of the criteria GiveWell uses when evaluating charities, so if you agree they are meaningful criteria, you may want to go with GiveWell’s recommendations.
However, if these criteria are not meaningful to you, I suggest thinking up which criteria are meaningful to you, and evaluating charities on your own. Whatever your criteria are, there is a huge difference between good and bad charities! Take advantage of that and make your donation count.
But, again, the first step is starting to donate. For that, no evaluation is needed. Pick something and go. Optimise later.