How Much to Give is a Pragmatic Question
I was recently talking to someone who had recently started thinking about effective altruism, and was trying to figure out how to work it into their life. They were established in their career, it paid well, and their background wasnât obviously a good fit for direct work, so they were naturally considering earning to give. This prompts a question of how much to give.
âHow much?â is a question people have struggled with for a very long time. Donating 10% of income has a long history, and itâs common for EAs to pledge to do this; donating 2.5% of wealth is also traditional. If youâre earning to give, however, you might want to give more: Julia and I have been giving 50%; Allan Saldanha has been giving 75% since 2019. How should one decide?
I was hoping there were good EA blog posts on this topic, but after spending a while with EA Forum search and Google I didnât find any. Claude kept telling me I should check out Jeff Kaufmanâs blog, but all I found was a rough post from 2011. So hereâs an attempt that I think is better than my old post, but still not great.
While EAs talk a lot about principles, I think this is fundamentally a pragmatic question. I find the scale of the worldâs problems overwhelming; no one has enough money to eliminate poverty, disease, or the risk we make ourselves extinct. This is not to say donations donât matterâthere are a lot of excellent options for making the world betterâbut thereâs not going to be a point where Iâm going to be satisfied and say âGood! Thatâs done now.â This gives a strong intellectual pull to donate to the point where donating another dollar would start to decrease my altruistic impact, by interfering in my work; burning out does not maximize your impact!
In the other direction, Iâm not fully altruistic. I like some amount of comfort, there are fun things I want to do, and I want my family to have good lives. Iâm willing to go pretty far in the altruism direction (I donate 50% and took a 75% pay cut to do more valuable work) but itâs a matter of balance.
Which means the main advice I have is to give yourself the information you need to make a balanced choice. Iâd recommend making a few different budgets: how would your life look if you gave 5%? 10%? 20%? In figuring out where youâd cut it might be helpful to ignore the donation aspect: how would your budget change if your industry started doing poorly?
In some ways Julia and I had this easy: we got into these ideas when we were just starting out and living cheaply, while we could still be careful about which luxuries to adopt and maintain inexpensive tastes. Itâs much harder to cut back! So another thing Iâd recommend, especially if you havenât yet reached peak earning years, is to plan to donate a disproportionately large fraction of pay increases. For example, 10% of your (inflation adjusted!) 2024 salary plus 50% of any amount over that.
Overall, the goal is to find a level where you feel good about your donations but are also still keeping enough to thrive. This is a very personal question, and people land in a bunch of different places. But wherever you do end up, Iâm glad to be working with you.
From my point of view, the biggest issue that makes this question an everlasting companion for most is uncertainty. Even if I could currently give 50% away and have the same standard, how will that look like in a few years? What if I lose my job in my 50s and struggle to find anything? What if my abilities will become meaningless because of technological advancements even earlier?
I would assume for most itâs not a question of consumption vs. donations, as many essays and books make it sound. Itâs about the balance between how much to put into your own financial securement vs. donating. This is probably much easier to answer for promising 80,000 hours supported geniuses, but a very different picture for the Average Joe who struggled in school and to find employment in the first place. Itâs probably impossible to give clear answers when taking that into consideration, though.
You could try putting cash into a separate savings account earmarked for donation. When you are happy that you donât need it, donate it. (But maybe over a few years for tax efficiency)
Youâve put into clear words the struggle that I have always had. If I had a guaranteed income or some high level of confidence that I would always be able to find employment and gain income of a certain level, then Iâd find it quite easy to give away money. It wouldnât be as scarce of a resource.
There are certain parallels to the idea of put on your own oxygen mask first, as we do need to make sure we are okay before helping others. But I also suppose that the really tricky part is considering what is okay âenoughâ for us.
I strongly agree that you need to put your own needs first, and think that your level of comfort with your savings and ability to withstand foreseeable challenges is a key input. My go-to in general, is that the standard advice of keeping 3-6 months of expenses is a reasonable goalâso you can and should give, but until you have saved that much, you should at least be splitting your excess funds between savings and charity. (And the reason most people donât manage this has a lot to do with lifestyle choices and failure to manage their spendingânot just not having enough income. Normal people never have enough money to do everything theyâd like to; set your expectations clearly and work to avoid the hedonic treadmill!)
Thatâs why my own approach is âFIRE [Financial Independence, Retire Early] firstâ. In which one first plans for a frugal retirement (which, for the USA, requires way less than $1M, possibly less than half of that, so itâs highly achievable, and mainly depends on the strength of your frugal muscles, not your above-average earning power). That takes about 7 to 10 years, which can be shortened to 5 if you work hard or are lucky. That amount is than set apart in case your life takes a wrong left turn.
Then you keep working, and either donate everything (since youâre already set for life), or at least as high of a percentage youâre comfortable with.
You have to consider, e.g. the cost of raising kids, since the amount planned for a 50+ years retirement wonât have those expenses considered (in the long run, they are âtemporaryâ)
Plus the general category of âthrivingâ, since if you are optimizing for effectiveness youâre likely not optimizing for minimum absolute cost. Thatâs why Iâm not just linking Jacob Lund Fisker and telling you $7000/âyear is enough (and mind, heâs kept up at least until most recent update in 2019)
As for Average Joe⊠most limiting resource isnât money at all, but willpower and other cognitive powers. Fortunately, itâs not like the Average Joe is EA or vice versa.
In any case, consider that my answer of âhow much to put into your own financial security vs. donatingâ. Not in terms of splitting a wage, but of bypassing the question entirely.
To follow on to your point, as it relates to my personal views, (in case anyone is interested,) itâs worth quoting the code of Jewish law. It introduces its discussion of Tzedakah by asking how much one is required to give. âThe amount, if one has sufficient ability, is giving enough to fulfill the needs of the poor. But if you do not have enough, the most praiseworthy version is to give one fifth, the normal amount is to give a tenth, and less than that is a poor sign.â And I note that this was written in the 1500s, where local charity was the majority of what was practical; todayâs situation is one where the needs are clearly beyond any one personâs abilityâso the latter clauses are the relevant ones.
So I think that, in a religion that prides itself on exacting standards and exhaustive rules for the performance of mitzvot, this is endorsing exactly your point: while giving might be a standard, and norms and community behavior is helpful in guiding behavior, the amount to give is always a personal and pragmatic decision, not a general rule.
This is extremely relevant for me as I have been thinking a lot about when to start making more serious donations. I discussed some previous blockers here which havenât been resolved. I am therefore considering commissioning some research (ideally with others).
Broadly Iâm interested in better understanding the âdonators dilemmaâ: if you give money now, you forego the later opportunity to âgive betterâ due to having improved information, and to âgive moreâ due to passive income. Also to benefit from increased financial security that might enable you to have more direct impact (e.g., by taking a lower paid role that has higher impact, or starting a new initiative).
I want somebody to systematically review the literature for to capture the different arguments and trade-offs for giving now versus later. Then to create some sort of accessible decision-making tool or process that people like me can use to decide on an appropriate threshold or strategy to have WRT to giving now versus later.
If anyone is also interested in funding this or knows some existing tools, then please let me know.
For the question of whether to âsave to give,â MacAskillâs paper on the topic was very useful for me. One crucial consideration is whether my donations would grow more in someone elseâs hands.
E.g. I give $100k to AMF means fewer die from malaria, which means more economic growth. Does this generate more than the ~7%/âyear my stocks might? I find that people often neglect this counterfactual.
I just found that Sebastian Schwiecker had written a blog post on the same topic.
Because of
⊠Iâm leaving this link here :) https://ââeffektiv-spenden.org/ââblog/ââwie-viel-soll-ich-spenden/ââ
Thank you for writing this. I have been struggling with this question myself, and your recommendation will hopefully give me motivation to finally getting around to creating a budget
Having defined budgets has been very helpful for me! Otherwise, I fall prey to the perils of maximization.
I like your posts. They are short and informative.
I really wonder how you manage to have the time to work, take care of the kids and do other stuff like writing⊠good posts. It is not only that the topic is usually interesting, but writing short informative posts is usually much more time-consuming that writing the same post as a long and not specific/âwithout links version. How do you do it?
Thanks!
I think itâs some combination of temperament (I just really like writing!) and practice (Iâve been writing posts multiple times a week for over a decade)?
I think youâre probably also only seeing my better posts, since I donât cross-post most things to the Forum?