there are certainly cases where it doesn’t make sense to give annually
Does GWWC have recommendations on how to handle inflation? For example, if I earn $X and then wait a couple years during which we have 10% cumulative inflation, do I now donate 10% of 1.1 * $X? Or (in my case) if I gave more than my pledged amount for multiple years while earning to give, building up a ‘surplus’, and am considering giving less than my pledged amount for a bit while I work a lower paying direct job, should I account for that my donations were of more valuable dollars? Should we handle this asymmetrically (yes for #1 and no for #2) to stay conservative and above reproach? Does the dashboard tracker account for inflation?
(I think the “correct” way to handle it is to do all the calculations in constant dollars, adjusting for inflation, but since this could look to the general public like motivated reasoning for giving less in case #2 perhaps GWWC thinks we shouldn’t do it?)
At the moment it does not. It does account for variable exchange rates (e.g. if you report your income in GBP but donate in USD, it considers the exchange rate on the day of the donation to calculate the percentage of income that was donated), so we could use the same system to account for inflation/discount rates.
I think the “correct” way to handle it is to do all the calculations in constant dollars, adjusting for inflation
This would be a reasonable approach. I think another reasonable approach might be to consider interest rates instead of inflation: if someone donated $1,000 in 2010 that they would have otherwise invested, they have given much more than $1,000 of their 2023 wealth (even adjusting for inflation).
The goal of this advice is to help members stick to their plan of taking significant action to benefit others. All guidelines about how to calculate income should be thought of as serving that goal.
In practice, it’s very hard to give exact guidance on what “10%” means in every case [1], so we usually recommend people follow the “spirit” of the pledge and give what they would consider as 10% of their lifetime income. (Which in many cases could be inflation-adjusted)
I’m not sure if adding an option for considering discount rates in the pledge dashboard would help members give more or give better, but if there’s enough user interest we can definitely consider it.
This usually comes up for things like tax deductions/rebates and salary sacrifices. E.g. when only some of your donations are deductible, or when you set your own salary
Strongly agree. A discount rate calculator with accompanying explanations emphasizing that—where practical—giving away money now is better because of inflation and compounding returns on saving lives or solving problems (and uncertainty about whether you’ll stick to your pledge!) but let people trade that off against the reality they’d have a lot more disposable income after paying significant interest on loans/mortgages or realistic near term career progression
(obviously discount rate calculation isn’t for everyone and isn’t something I’d put on the main page, but for some people it’s illuminating)
Does GWWC have recommendations on how to handle inflation? For example, if I earn $X and then wait a couple years during which we have 10% cumulative inflation, do I now donate 10% of 1.1 * $X? Or (in my case) if I gave more than my pledged amount for multiple years while earning to give, building up a ‘surplus’, and am considering giving less than my pledged amount for a bit while I work a lower paying direct job, should I account for that my donations were of more valuable dollars? Should we handle this asymmetrically (yes for #1 and no for #2) to stay conservative and above reproach? Does the dashboard tracker account for inflation?
(I think the “correct” way to handle it is to do all the calculations in constant dollars, adjusting for inflation, but since this could look to the general public like motivated reasoning for giving less in case #2 perhaps GWWC thinks we shouldn’t do it?)
First, the easy one:
At the moment it does not. It does account for variable exchange rates (e.g. if you report your income in GBP but donate in USD, it considers the exchange rate on the day of the donation to calculate the percentage of income that was donated), so we could use the same system to account for inflation/discount rates.
This would be a reasonable approach. I think another reasonable approach might be to consider interest rates instead of inflation: if someone donated $1,000 in 2010 that they would have otherwise invested, they have given much more than $1,000 of their 2023 wealth (even adjusting for inflation).
In general, I really like this sentence from our FAQ on how members calculate income
In practice, it’s very hard to give exact guidance on what “10%” means in every case [1], so we usually recommend people follow the “spirit” of the pledge and give what they would consider as 10% of their lifetime income. (Which in many cases could be inflation-adjusted)
I’m not sure if adding an option for considering discount rates in the pledge dashboard would help members give more or give better, but if there’s enough user interest we can definitely consider it.
This usually comes up for things like tax deductions/rebates and salary sacrifices. E.g. when only some of your donations are deductible, or when you set your own salary
Strongly agree. A discount rate calculator with accompanying explanations emphasizing that—where practical—giving away money now is better because of inflation and compounding returns on saving lives or solving problems (and uncertainty about whether you’ll stick to your pledge!) but let people trade that off against the reality they’d have a lot more disposable income after paying significant interest on loans/mortgages or realistic near term career progression
(obviously discount rate calculation isn’t for everyone and isn’t something I’d put on the main page, but for some people it’s illuminating)