I completely understand your point, but as a donor I have to say I’m considerably more likely to give when I feel that people in the organisation accept lower salaries because they genuinely believe in the cause. When I read, for example, that Marcus Abramovitch has donated 60% of his lifetime earnings and is now managing the Manifund Falcon fund without taking any salary, my immediate reaction was: this person is not in it for the money, and I trust him to make the most of my donation.
If you need to pay more to attract talent, that’s fine but I don’t think it’s particularly effective to pay more than necessary just to match market salaries.
That said, I do think a pledge should count as fulfilled if someone accepts a significantly below-market salary while working for a highly effective charity.
Hi Hans, I appreciate this a lot. I just feel i should say, I am by no means poor. I dont spend much money but I have some investments (private and public) that have done really well and job offers that make me confident ill be fine no matter what. My worst case scenario is I do some boring market making or investment banking.
Well, I already assumed you weren’t poor when 1.5 million was 60% of your earnings. But there are people who made much more and gave far less. My point is that as a donor, it’s hard to see how effective an organisation really is. So the fact that you believe in it enough to work without getting paid just makes me feel more confident that my money is being put to good use.
I think what I am proposing here is perfectly compatible with your requirement as a donor: We can make it the norm to pay market salaries but then you as a donor can still say you only donate to charities where the founder or staff donate a significant fraction of that salary back to the charity with salary sacrifices. That’s a bit like the common for-profit equivalent for investors to want founders to have “skin in the game” by having equity.
Let’s take Marcus’ example (please correct me if I am making wrong assumptions here!): Marcus’ fund will turn donations into impact by regranting. As a donor to the fund, you only get a “cut” of that impact because the fund did some work (research, payment processing, …). As a donor to the fund I am happy to give them a cut because it saves me time. How big is the cut? I think the foregone salary by Marcus (and potentially other staff) are a good estimate for this. That’s why we should model his foregone salary has an implicit donor to the fund and divide the fund impact by all the donations, including his foregone salary. I hope this is making sense!
you as a donor can still say you only donate to charities where the founder or staff donate a significant fraction of that salary back to the charity with salary sacrifices.
For this to work, those donations would need to be made public which presumably creates considerable pressure on staff who feel compelled to give simply to avoid deterring donors. I can’t see such a system ever gaining traction in the European Union, given how seriously we take privacy, though it might function well in cultures with different norms around financial transparency.
That’s why we should model his foregone salary has an implicit donor to the fund and divide the fund impact by all the donations, including his foregone salary. I hope this is making sense!
It makes perfect sense mathematically. Whether it would be a wise marketing strategy is another question. Telling donors that overhead is only 5% because the fund manager forgoes a salary is a far more compelling pitch than saying overhead is 7.31% but the fund manager donates 2.31% of it back. (The numbers are purely illustrative, of course.)
Not sure if we’d have to make all donation public. But in the example of Marcus, he did that, he publicly stated that he is not taking salary. Your original claim was you prefer to donate to charities where you know that people take a low salary. The only way to know this is for this to be public.
For this to work we’d only need to know total market-equivalent salaries and total “donated” fraction of this. Doesn’t have to be per-staff. This is not very different from the overhead reporting right now and should be possible with privacy laws.
Re marketing: I agree that this differnt view of looking at impact is a bit harder to get across initially but it could eventually be much cleaner: It allows to give a “mathematical” quantifiable view on what “split” of the impact I am getting as a donor. At least in this community, that’s something people want I think.
I guess you could align your proposals with European privacy laws, but it would never be truly private, especially in a small charity.
Your original claim was you prefer to donate to charities where you know that people take a low salary. The only way to know this is for this to be public.
It was not a claim but a statement of fact. I’m not saying it’s the right thing to do. It’s just that when I hear a story like Markus’s, or when I have dinner with the management of Sea Shepherd Global and learn that they all sleep on volunteers’ couches while on an official mission because they wouldn’t want to use any donor money on a hotel room it inspires me, and I want to give. When I hear that a COO of the Centre for Effective Altruism earns $227,461, I may understand it intellectually, but it just doesn’t inspire me at all.
There will always be some information about salaries available. When charities have to hire people in many countries, they are required to state how much they will pay and people are always free to share how much they earn if they wish to do so. Information about donations seems to be more worthy of protection to some people. The view that donating publicly is in some way “unpure” because the people doing it are acting in their own interest, i.e. to look good is surprisingly common. I have heard this many times when people were talking about celebrities and what they donated.
It might also be an issue for Christians. Matthew 6:1–4 says:
Therefore when thou doest thine alms, do not sound a trumpet before thee, as the hypocrites do…
I don’t hold these views, quite the contrary. I think one should talk about one’s own commitment in order to motivate others, and perhaps this simply isn’t an issue in EA charitys. I just wanted to mention it as something worth considering.
Yes, I agree about the inspiring vs non-inspiring feelings and how this has impact.
I still feel there must be a way to flip this somehow and find a way to assign and recognise impact and contributions that feels motivating and uplifiting to everybody, but maybe that’s for another post haha
Thanks for taking the time to write these comments, really appreciate it!
I still feel there must be a way to flip this somehow and find a way to assign and recognise impact and contributions that feels motivating and uplifiting to everybody
I feel it would be interesting, but not necessarily uplifting, to estimate how much the EA community spends on any given intervention. Let’s return to your Atlantic Shepherd example. Sea Shepherd is one of those classic charities that handles everything in-house from fundraising and awareness-raising to carrying out the actual anti-poaching interventions. The charities typically recommended by EAs, on the other hand, externalise a great deal of their costs.
Imagine we set up “Atlantic Shepherd” as an EA charity. Before it ever received funding, an organisation like Rethink Priorities would likely have helped make the case for ocean interventions. Grantmakers would have supported them in getting started. Animal Charity Evaluators would assess them. Several other charities would recommend them. The 80,000 Hours podcast would feature them. And then there are all the charities working on building the EA community itself, as well as those raising funds on Atlantic Shepherd’s behalf. All of these organisations have spent real resources advancing the cause, yet none of those costs ever appear when analysing Atlantic Shepherd’s cost-effectiveness. It would be entirely possible for the community to be spending twice as much per fish saved as Sea Shepherd does, while the cost-effectiveness analysis still shows Atlantic Shepherd coming out ahead by a wide margin.
Agree on this 100%. I originally wanted to bake in that line of reasoning in this article but I felt it was already controversial enough as it is hahaha. This is another example of everybody claiming marginal impact adding up to 10x of the imapct we actually had.
Happy to write a post about this together at some point!
I completely understand your point, but as a donor I have to say I’m considerably more likely to give when I feel that people in the organisation accept lower salaries because they genuinely believe in the cause. When I read, for example, that Marcus Abramovitch has donated 60% of his lifetime earnings and is now managing the Manifund Falcon fund without taking any salary, my immediate reaction was: this person is not in it for the money, and I trust him to make the most of my donation.
If you need to pay more to attract talent, that’s fine but I don’t think it’s particularly effective to pay more than necessary just to match market salaries.
That said, I do think a pledge should count as fulfilled if someone accepts a significantly below-market salary while working for a highly effective charity.
Hi Hans, I appreciate this a lot. I just feel i should say, I am by no means poor. I dont spend much money but I have some investments (private and public) that have done really well and job offers that make me confident ill be fine no matter what. My worst case scenario is I do some boring market making or investment banking.
Well, I already assumed you weren’t poor when 1.5 million was 60% of your earnings. But there are people who made much more and gave far less. My point is that as a donor, it’s hard to see how effective an organisation really is. So the fact that you believe in it enough to work without getting paid just makes me feel more confident that my money is being put to good use.
Thanks for doing this!
Thanks for your thoughts!
I think what I am proposing here is perfectly compatible with your requirement as a donor: We can make it the norm to pay market salaries but then you as a donor can still say you only donate to charities where the founder or staff donate a significant fraction of that salary back to the charity with salary sacrifices. That’s a bit like the common for-profit equivalent for investors to want founders to have “skin in the game” by having equity.
Let’s take Marcus’ example (please correct me if I am making wrong assumptions here!): Marcus’ fund will turn donations into impact by regranting. As a donor to the fund, you only get a “cut” of that impact because the fund did some work (research, payment processing, …). As a donor to the fund I am happy to give them a cut because it saves me time. How big is the cut? I think the foregone salary by Marcus (and potentially other staff) are a good estimate for this. That’s why we should model his foregone salary has an implicit donor to the fund and divide the fund impact by all the donations, including his foregone salary. I hope this is making sense!
For this to work, those donations would need to be made public which presumably creates considerable pressure on staff who feel compelled to give simply to avoid deterring donors. I can’t see such a system ever gaining traction in the European Union, given how seriously we take privacy, though it might function well in cultures with different norms around financial transparency.
It makes perfect sense mathematically. Whether it would be a wise marketing strategy is another question. Telling donors that overhead is only 5% because the fund manager forgoes a salary is a far more compelling pitch than saying overhead is 7.31% but the fund manager donates 2.31% of it back. (The numbers are purely illustrative, of course.)
Not sure if we’d have to make all donation public. But in the example of Marcus, he did that, he publicly stated that he is not taking salary. Your original claim was you prefer to donate to charities where you know that people take a low salary. The only way to know this is for this to be public.
For this to work we’d only need to know total market-equivalent salaries and total “donated” fraction of this. Doesn’t have to be per-staff. This is not very different from the overhead reporting right now and should be possible with privacy laws.
Re marketing: I agree that this differnt view of looking at impact is a bit harder to get across initially but it could eventually be much cleaner: It allows to give a “mathematical” quantifiable view on what “split” of the impact I am getting as a donor. At least in this community, that’s something people want I think.
I guess you could align your proposals with European privacy laws, but it would never be truly private, especially in a small charity.
It was not a claim but a statement of fact. I’m not saying it’s the right thing to do. It’s just that when I hear a story like Markus’s, or when I have dinner with the management of Sea Shepherd Global and learn that they all sleep on volunteers’ couches while on an official mission because they wouldn’t want to use any donor money on a hotel room it inspires me, and I want to give. When I hear that a COO of the Centre for Effective Altruism earns $227,461, I may understand it intellectually, but it just doesn’t inspire me at all.
There will always be some information about salaries available. When charities have to hire people in many countries, they are required to state how much they will pay and people are always free to share how much they earn if they wish to do so. Information about donations seems to be more worthy of protection to some people. The view that donating publicly is in some way “unpure” because the people doing it are acting in their own interest, i.e. to look good is surprisingly common. I have heard this many times when people were talking about celebrities and what they donated.
It might also be an issue for Christians. Matthew 6:1–4 says:
I don’t hold these views, quite the contrary. I think one should talk about one’s own commitment in order to motivate others, and perhaps this simply isn’t an issue in EA charitys. I just wanted to mention it as something worth considering.
Yes, I agree about the inspiring vs non-inspiring feelings and how this has impact.
I still feel there must be a way to flip this somehow and find a way to assign and recognise impact and contributions that feels motivating and uplifiting to everybody, but maybe that’s for another post haha
Thanks for taking the time to write these comments, really appreciate it!
I feel it would be interesting, but not necessarily uplifting, to estimate how much the EA community spends on any given intervention. Let’s return to your Atlantic Shepherd example. Sea Shepherd is one of those classic charities that handles everything in-house from fundraising and awareness-raising to carrying out the actual anti-poaching interventions. The charities typically recommended by EAs, on the other hand, externalise a great deal of their costs.
Imagine we set up “Atlantic Shepherd” as an EA charity. Before it ever received funding, an organisation like Rethink Priorities would likely have helped make the case for ocean interventions. Grantmakers would have supported them in getting started. Animal Charity Evaluators would assess them. Several other charities would recommend them. The 80,000 Hours podcast would feature them. And then there are all the charities working on building the EA community itself, as well as those raising funds on Atlantic Shepherd’s behalf. All of these organisations have spent real resources advancing the cause, yet none of those costs ever appear when analysing Atlantic Shepherd’s cost-effectiveness. It would be entirely possible for the community to be spending twice as much per fish saved as Sea Shepherd does, while the cost-effectiveness analysis still shows Atlantic Shepherd coming out ahead by a wide margin.
Agree on this 100%. I originally wanted to bake in that line of reasoning in this article but I felt it was already controversial enough as it is hahaha. This is another example of everybody claiming marginal impact adding up to 10x of the imapct we actually had.
Happy to write a post about this together at some point!