Good post! One possible complication I didn’t see addressed is the role of cause saturation.
Suppose that the most effective global health charities (or interventions more generally) are likely to become saturated over time as EA grows, more money flows in, and people “get their act together.” If that saturation happens on, say, a 5-year timeline, then delaying donations means missing the chance to fund the top-marginal opportunities now. Even if you plan to donate to the “next best” charity later, there’s a real cost: the best opportunities would have had 5 extra years of impact that are now lost.
In other words, for waiting to be better, the investment return advantage must outweigh not just the growth in baseline incomes, but also the lost value of funding the most cost-effective opportunities before they close.
Im not sure how likely this sorta thing is in practice, but i thought it was worth a note.
In theory, this seems important and worth considering. Another effect that might pull in the opposite direction:
As we learn more about effective causes we are able to identify more effective solutions/issue areas.
It’s not obvious which effect (or something else) will dominate. One way we might be able to acertain the answer to this is to look at the effectiveness of Givewell’s top charities across time. My understanding is this hasn’t moved much, but also that their definitions of “life saved” has changed across time. Unsure which direction that might affect things.
yes, I definitely think this is a complication here. The toy model in this post assumes the only cause is something like direct cash transfers. I think this makes sense as a baseline (for the same reason GiveWell uses cash transfers as a baseline) but of course we can and do find global health interventions more promising than cash transfers and it is possible the effectiveness of these interventions diminishes over time faster than investment returns. However, I do not think this is what we have seen so for in practice. In 2015, GiveWell had 3 non-cash charities they estimated to be 5-10x more effective than cash transfers, but by 2018 they had 7 which they estimated to be 5-15x more effective than cash[1].
Good post!
One possible complication I didn’t see addressed is the role of cause saturation.
Suppose that the most effective global health charities (or interventions more generally) are likely to become saturated over time as EA grows, more money flows in, and people “get their act together.” If that saturation happens on, say, a 5-year timeline, then delaying donations means missing the chance to fund the top-marginal opportunities now. Even if you plan to donate to the “next best” charity later, there’s a real cost: the best opportunities would have had 5 extra years of impact that are now lost.
In other words, for waiting to be better, the investment return advantage must outweigh not just the growth in baseline incomes, but also the lost value of funding the most cost-effective opportunities before they close.
Im not sure how likely this sorta thing is in practice, but i thought it was worth a note.
In theory, this seems important and worth considering. Another effect that might pull in the opposite direction:
As we learn more about effective causes we are able to identify more effective solutions/issue areas.
It’s not obvious which effect (or something else) will dominate. One way we might be able to acertain the answer to this is to look at the effectiveness of Givewell’s top charities across time. My understanding is this hasn’t moved much, but also that their definitions of “life saved” has changed across time. Unsure which direction that might affect things.
Yep, agreed. Good point
yes, I definitely think this is a complication here. The toy model in this post assumes the only cause is something like direct cash transfers. I think this makes sense as a baseline (for the same reason GiveWell uses cash transfers as a baseline) but of course we can and do find global health interventions more promising than cash transfers and it is possible the effectiveness of these interventions diminishes over time faster than investment returns. However, I do not think this is what we have seen so for in practice. In 2015, GiveWell had 3 non-cash charities they estimated to be 5-10x more effective than cash transfers, but by 2018 they had 7 which they estimated to be 5-15x more effective than cash[1].
https://www.openphilanthropy.org/research/givewells-top-charities-are-increasingly-hard-to-beat/