Edit 27/10/21: See these posts 123 for the next steps in this project. The post below was originally published on 09/01/20.
At Founders Pledge, we are considering launching a long-term investment fund for our members. Contributions to this fund would by default be invested, potentially over centuries or millennia to come. Grants would only be made when there’s a strong case that a donation opportunity beats investment from a longtermist perspective.
This idea was prompted in large part by recent research in the EA community, most notably Phil Trammell’s initial work on patient philanthropy and Will MacAskill’s forum post and the ensuing discussion on outside-view longtermism.
We have just started this investigation, and don’t hold the views expressed below strongly. This post is mainly a call for input: we’d like to make the best possible use of the expertise and connections available in the larger EA community.
Why a long-term investment fund
In brief, we currently see three main potential ways in which investing to give later may be better than giving now:
By exploiting the pure time preference in the market, i.e. that non-patient people are willing to sell the future (and especially the long-term future) cheaply
There are risks of expropriation, e.g. existential catastrophes or legal changes
There are risks of value or competency change in the wrong direction, e.g. governance ends up in the wrong hands or new moral and nonmoral insights are not incorporated
We have major uncertainty about all six factors, and intend to look into them further as part of this investigation. Assuming legal feasibility, we think it likely (>50%) that a well-governed long-term investment fund is among the highest-impact giving opportunities we currently know of from a longtermist perspective.
What the fund would (ideally) entail
Donations would be invested with the idea of growing the fund, potentially over centuries or even millennia to come. Money would only be deployed when there is a strong case that allocating to a funding opportunity is higher-impact from a longtermist perspective than keeping the money invested. This could happen, for instance, if our estimate of the expropriation rate rises greatly, legal and/or market changes make investing much less attractive, or we identify a truly extraordinary funding opportunity that we don’t expect to be filled by others.
We might decide to create a separate legal entity for the fund, to make it less dependent on what happens to Founders Pledge in the long term. If so, we’ll have to define a legally fixed objective. We think we should define this in pure moral terms to allow for strategic flexibility, e.g. it should not include anything about investing. It should also balance protection against value drift with flexibility to incorporate new moral insights. Our starting idea is “to provide maximum benefit to all sentient beings, regardless of where or when they exist”.
In addition to this fixed legal objective, we are thinking about the best way to structure the fund’s year-to-year governance. For instance, we could carefully select a board of trustees to guard the objective of the fund and update its strategy. They should embody the values of the fund and be strategically knowledgeable. This would allow a lot of the governance to remain adaptable: value and competency drift could be averted by good initial trustee choices and a solid process of succession.
If we launch this fund, we will recommend it to our longtermist members alongside our existent recommendations on existential risk reduction and forthcoming new longtermist recommendations. Some of our members have already expressed interest. We also expect this fund could be interesting for non-longtermist members who nonetheless want to allocate a fraction of their ‘giving portfolio’ to benefiting the longer term.
What type of input we would most value at this stage
In order of preference:
Connections or expertise on international trust, charity and investment law
Legal and tax considerations will have a major influence on how we could best set up this fund. If you have expertise in this area or could connect us to anyone who does, your help would be highly appreciated. Please reach out to sjir@founderspledge.com.
Criticisms of the idea and any of its premises
References to relevant papers / articles are also welcome. Please leave these in the comments.
Examples of similar funds
To learn more about e.g. risks of value drift, risks of expropriation and legal structures, we’re looking into case studies of similar funds, both active now and in the past. We are aware of the Wellcome Trust, the Mormon investment fund, the Nobel Foundation, the Islamic Waqfs, sovereign wealth funds, university trusts, and the Catholic Church. If you know of any other good examples or have useful sources on the above-mentioned ones, please let us know in the comments.
Creative ideas for optimal governance of the fund
Creative thoughts on naming and framing of the fund
Our current working title is ‘Legacy Fund’, but if you have any other ideas, feel free to suggest.
Long-term investment fund at Founders Pledge
Edit 27/10/21: See these posts 1 2 3 for the next steps in this project. The post below was originally published on 09/01/20.
At Founders Pledge, we are considering launching a long-term investment fund for our members. Contributions to this fund would by default be invested, potentially over centuries or millennia to come. Grants would only be made when there’s a strong case that a donation opportunity beats investment from a longtermist perspective.
This idea was prompted in large part by recent research in the EA community, most notably Phil Trammell’s initial work on patient philanthropy and Will MacAskill’s forum post and the ensuing discussion on outside-view longtermism.
We have just started this investigation, and don’t hold the views expressed below strongly. This post is mainly a call for input: we’d like to make the best possible use of the expertise and connections available in the larger EA community.
Why a long-term investment fund
In brief, we currently see three main potential ways in which investing to give later may be better than giving now:
By exploiting the pure time preference in the market, i.e. that non-patient people are willing to sell the future (and especially the long-term future) cheaply
By exploiting the risk premium in the market, to the extent that longtermist altruists should price risks differently to the market
By giving us more time to learn and get better at identifying high-impact giving opportunities to benefit the long term
There are also considerations that may counter (partially or in full) these three benefits:
We may be living at one of the most influential times in history
There are risks of expropriation, e.g. existential catastrophes or legal changes
There are risks of value or competency change in the wrong direction, e.g. governance ends up in the wrong hands or new moral and nonmoral insights are not incorporated
We have major uncertainty about all six factors, and intend to look into them further as part of this investigation. Assuming legal feasibility, we think it likely (>50%) that a well-governed long-term investment fund is among the highest-impact giving opportunities we currently know of from a longtermist perspective.
What the fund would (ideally) entail
Donations would be invested with the idea of growing the fund, potentially over centuries or even millennia to come. Money would only be deployed when there is a strong case that allocating to a funding opportunity is higher-impact from a longtermist perspective than keeping the money invested. This could happen, for instance, if our estimate of the expropriation rate rises greatly, legal and/or market changes make investing much less attractive, or we identify a truly extraordinary funding opportunity that we don’t expect to be filled by others.
We might decide to create a separate legal entity for the fund, to make it less dependent on what happens to Founders Pledge in the long term. If so, we’ll have to define a legally fixed objective. We think we should define this in pure moral terms to allow for strategic flexibility, e.g. it should not include anything about investing. It should also balance protection against value drift with flexibility to incorporate new moral insights. Our starting idea is “to provide maximum benefit to all sentient beings, regardless of where or when they exist”.
In addition to this fixed legal objective, we are thinking about the best way to structure the fund’s year-to-year governance. For instance, we could carefully select a board of trustees to guard the objective of the fund and update its strategy. They should embody the values of the fund and be strategically knowledgeable. This would allow a lot of the governance to remain adaptable: value and competency drift could be averted by good initial trustee choices and a solid process of succession.
If we launch this fund, we will recommend it to our longtermist members alongside our existent recommendations on existential risk reduction and forthcoming new longtermist recommendations. Some of our members have already expressed interest. We also expect this fund could be interesting for non-longtermist members who nonetheless want to allocate a fraction of their ‘giving portfolio’ to benefiting the longer term.
What type of input we would most value at this stage
In order of preference:
Connections or expertise on international trust, charity and investment law
Legal and tax considerations will have a major influence on how we could best set up this fund. If you have expertise in this area or could connect us to anyone who does, your help would be highly appreciated. Please reach out to sjir@founderspledge.com.
Criticisms of the idea and any of its premises
References to relevant papers / articles are also welcome. Please leave these in the comments.
Examples of similar funds
To learn more about e.g. risks of value drift, risks of expropriation and legal structures, we’re looking into case studies of similar funds, both active now and in the past. We are aware of the Wellcome Trust, the Mormon investment fund, the Nobel Foundation, the Islamic Waqfs, sovereign wealth funds, university trusts, and the Catholic Church. If you know of any other good examples or have useful sources on the above-mentioned ones, please let us know in the comments.
Creative ideas for optimal governance of the fund
Creative thoughts on naming and framing of the fund
Our current working title is ‘Legacy Fund’, but if you have any other ideas, feel free to suggest.