Option A: Put money in an index fund, let it grow, spend it in 100 years
Option B: give it to people who will spend some of it now, invest some, pass on some to their children, who will in turn spend some of it, invest some of it, and pass it onto their children, leaving some for their grandchildren to spend in 100 years.
Option A leads to a bigger counterfactual increase in spending-100-years-from-now which is what we care about in this (admittedly contrived) example
So lets say we are targeting population P—these are the recipients. P is the population of people most in need that will be around in 100 years. Most of them do not currently exist. We want to spend money to help P either in the form of direct cash transfers or health interventions.
We can do that by investing our money and then handing it out to the individuals in P once they come into existence. This is option A, aka the patient philanthropy strategy.
We could also give to the parents or grandparents of P, some of which are alive today, which we can call P_p and P_g. I am assuming this is what you mean by “Give it to their ancestors.”. I call this Option B. Option B is worse because:
some of the money is consumed by P_p and P_g instead of passed thru P. In this example we are assuming P is where our money is the most cost-effective so this is bad.
since we don’t know what areas will be most in need for the next few generations we don’t know quite who P_p and P_g are.
Well in this case the recipient does not currently exist and I cannot give them any money.
Give it to their ancestors.
see my previous comment:
Giving it to their ancestors is choosing option B
If by Option B you meant that the recipients would invest most or all of the cash transfers in index funds, why is Option A preferable?
So lets say we are targeting population P—these are the recipients. P is the population of people most in need that will be around in 100 years. Most of them do not currently exist. We want to spend money to help P either in the form of direct cash transfers or health interventions.
We can do that by investing our money and then handing it out to the individuals in P once they come into existence. This is option A, aka the patient philanthropy strategy.
We could also give to the parents or grandparents of P, some of which are alive today, which we can call P_p and P_g. I am assuming this is what you mean by “Give it to their ancestors.”. I call this Option B. Option B is worse because:
some of the money is consumed by P_p and P_g instead of passed thru P. In this example we are assuming P is where our money is the most cost-effective so this is bad.
since we don’t know what areas will be most in need for the next few generations we don’t know quite who P_p and P_g are.