As effective philanthropists, we are concerned with where to deploy our scarce resources to do the most good. We are also faced with a question of when to deploy these resources. We must decide between donating now and investing to donate later.
Below, I present a simple toy model of global health and development giving which suggests patient philanthropy—investing to donate later—is more effective at improving lives given current conditions.
Let’s imagine the target population for our giving has an annual consumption ygrowing at an annual rate of g. Their consumption over time is then
yt=y0(1+g)t
If we assume logarithmic utility with respect to consumption, the utility conferred to this population by a donation of size s at time t is
ΔUt=ln(yt+s)−ln(yt)=ln(1+syt)=ln(1+sy0(1+g)t)
So for a constant donation size, the utility provided to the target population by the donation decreases over time—just as we would expect for a population that is becoming richer. However, if the size of the potential donation increases over time with investment return r, the utility provided by the donation increases over time as long as r>g.
ΔUt=ln(1+s0y0(1+r1+g)t)
This suggests that as long as investment returns outstrip the rate of income growth among the global poor, saving to donate later will lead to greater benefit than donating today. Over the last 35 years the compound annual growth rate of the real threshold income for the poorest decile of the world population was 2.62% per year,[1] while real returns on global equities have been approximately 5.2% annual over the last 125 years[2]. As long as these conditions persist, keeping your charitable funds invested in stocks makes them increasingly valuable for future giving to the global poor compared with donating them today.
Questions
Should I take this model and its conclusions at all seriously? Obviously, there are a lot of idealized assumptions here—which ones are most unrealistic?
If an individual donor wanted to take a patient philanthropy strategy, what is the best way for them do that? One could simply save money themselves and disperse it upon death, but if they wanted even longer compounding horizons they could consider donating to a patient fund such as the Founders Pledge Patient Philanthropy Fund or even setting up their own trust or foundation—but those options come with their own risks.
Does this argument apply to existential risk reduction giving? Obviously we have no simple model or empirical finding for how ‘cost per risk amount reduced’ evolves over time. Some of these questions are explored in Phil Trammell’s ‘Patient Philanthropy in an Impatient World’ and its discussion of how the ‘hingyness’ of the present moment may evolve over time.
A Simple Case for Patient Philanthropy
A Model
As effective philanthropists, we are concerned with where to deploy our scarce resources to do the most good. We are also faced with a question of when to deploy these resources. We must decide between donating now and investing to donate later.
Below, I present a simple toy model of global health and development giving which suggests patient philanthropy—investing to donate later—is more effective at improving lives given current conditions.
Let’s imagine the target population for our giving has an annual consumption ygrowing at an annual rate of g. Their consumption over time is then
yt=y0(1+g)tIf we assume logarithmic utility with respect to consumption, the utility conferred to this population by a donation of size s at time t is
ΔUt=ln(yt+s)−ln(yt)=ln(1+syt)=ln(1+sy0(1+g)t)So for a constant donation size, the utility provided to the target population by the donation decreases over time—just as we would expect for a population that is becoming richer. However, if the size of the potential donation increases over time with investment return r, the utility provided by the donation increases over time as long as r>g.
ΔUt=ln(1+s0y0(1+r1+g)t)This suggests that as long as investment returns outstrip the rate of income growth among the global poor, saving to donate later will lead to greater benefit than donating today. Over the last 35 years the compound annual growth rate of the real threshold income for the poorest decile of the world population was 2.62% per year,[1] while real returns on global equities have been approximately 5.2% annual over the last 125 years[2]. As long as these conditions persist, keeping your charitable funds invested in stocks makes them increasingly valuable for future giving to the global poor compared with donating them today.
Questions
Should I take this model and its conclusions at all seriously? Obviously, there are a lot of idealized assumptions here—which ones are most unrealistic?
If an individual donor wanted to take a patient philanthropy strategy, what is the best way for them do that? One could simply save money themselves and disperse it upon death, but if they wanted even longer compounding horizons they could consider donating to a patient fund such as the Founders Pledge Patient Philanthropy Fund or even setting up their own trust or foundation—but those options come with their own risks.
Does this argument apply to existential risk reduction giving? Obviously we have no simple model or empirical finding for how ‘cost per risk amount reduced’ evolves over time. Some of these questions are explored in Phil Trammell’s ‘Patient Philanthropy in an Impatient World’ and its discussion of how the ‘hingyness’ of the present moment may evolve over time.
World Bank. Poverty and Inequality Platform. 2025.
Dimson, E., Marsh, P., & Staunton, M. (2025). Report: Stocks have far outperformed over the past 125 years. Cambridge Judge Business School. https://www.jbs.cam.ac.uk/2025/report-stocks-have-far-outperformed-over-the-past-125-years/