I agree increasing reserves should be the priority early one. On the other hand, I think it makes sense to set a target level of personal spending and savings (which does not have to be the same for everyone), and just donate everything above that level. My reason for this is that the marginal returns on personal spending and savings diminish much more steeply than personal donations.
Agree re: marginal returns on personal spending, very uncertain re: savings, especially given uncertain income (I’m currently midway through a one-year grant) and uncertain projected expenditures (traveling to conferences, moving house, supporting family, etc). I’ve thought seriously about the “set threshold and donate everything else” strategy for a long time and envied folks with the financial security and other sources of privilege to feel comfortable implementing it, and I think there are many more people like me (especially from LMICs). So for now I default to giving 10%.
Fair enough Mo, especially when you are from a LMIC!
Another huge factor people should factor in is possible inheritance and safety nets from family, which are often quite large especially in high income countries.
I think many more people should set thresholds though, I was so inspired by Will McKaskill and his threshold (something like 35,000 pounds?) in the original “Doing Good Better” book.
The way I think about it is that factors such as the ones you described will push the level of target savings to a higher level, and therefore the marginal returns on saving will be higher. I believe donating less than 10 % can be good strategy under some conditions.
I found this discussion of how much to save vs donate helpful when I was reviewing my finances recently.
Thanks for sharing, Holly!
I agree increasing reserves should be the priority early one. On the other hand, I think it makes sense to set a target level of personal spending and savings (which does not have to be the same for everyone), and just donate everything above that level. My reason for this is that the marginal returns on personal spending and savings diminish much more steeply than personal donations.
Agree re: marginal returns on personal spending, very uncertain re: savings, especially given uncertain income (I’m currently midway through a one-year grant) and uncertain projected expenditures (traveling to conferences, moving house, supporting family, etc). I’ve thought seriously about the “set threshold and donate everything else” strategy for a long time and envied folks with the financial security and other sources of privilege to feel comfortable implementing it, and I think there are many more people like me (especially from LMICs). So for now I default to giving 10%.
Fair enough Mo, especially when you are from a LMIC!
Another huge factor people should factor in is possible inheritance and safety nets from family, which are often quite large especially in high income countries.
I think many more people should set thresholds though, I was so inspired by Will McKaskill and his threshold (something like 35,000 pounds?) in the original “Doing Good Better” book.
Makes sense, Mo!
The way I think about it is that factors such as the ones you described will push the level of target savings to a higher level, and therefore the marginal returns on saving will be higher. I believe donating less than 10 % can be good strategy under some conditions.