I have the impression discussions about donations are often more focussed on the amount donated as a fraction of the net income than on levels of consumption and savings. The focus should arguably be on what is kept instead of given[1]. To illustrate, the following correspond to quite different situations:
Donating 10 % of a net annual income of 10 k$, 100 k$, or 1 M$.
Donating 10 % of a net annual income of 10 k$ while having savings of 10 k$, 100 k$, or 1 M$.
The adequate levels of consumption and savings would of course vary a great deal from person to person. However, in the same way that donating at least 10 % of net income has emerged as a common giving norm[2], it should still be possible to come up with some default reasonable levels for what is kept. For example, on a per person basis[3]:
For the annual consumption, 2 times the real global GDP per capita, i.e. 41.3 k$[4].
This is enough to be among the 9 % richest people in the world according to this calculator from Giving What We Can.
For the total savings, 4 times the real global GDP per capita, i.e. 82.7 k$[4].
This is enough for 2 years (= 4⁄2) considering the aforementioned annual consumption. Such a runway matches the upper bound of the interval of 6 to 24 months suggested here by 80,000 Hours (to its readers).
For x people, the levels of consumption and savings would be multiplied by x. So, for example for a family with 2 parents and 2 children, the suggested annual consumption and total savings as a fraction of the real global GDP per capita would be 8 (= 2*4) and 16 (= 4*4).
Calculated based on the real global GDP per capita in 2021 of 17.081 k 2017-$ from The World Bank, and the ratio between the value of 1 $ in 2017 and now of 1.21 from in2013dollars, whose product is 20.668 k$.
[Question] What should the levels of consumption and savings be?
I have the impression discussions about donations are often more focussed on the amount donated as a fraction of the net income than on levels of consumption and savings. The focus should arguably be on what is kept instead of given[1]. To illustrate, the following correspond to quite different situations:
Donating 10 % of a net annual income of 10 k$, 100 k$, or 1 M$.
Donating 10 % of a net annual income of 10 k$ while having savings of 10 k$, 100 k$, or 1 M$.
The adequate levels of consumption and savings would of course vary a great deal from person to person. However, in the same way that donating at least 10 % of net income has emerged as a common giving norm[2], it should still be possible to come up with some default reasonable levels for what is kept. For example, on a per person basis[3]:
For the annual consumption, 2 times the real global GDP per capita, i.e. 41.3 k$[4].
This is enough to be among the 9 % richest people in the world according to this calculator from Giving What We Can.
For the total savings, 4 times the real global GDP per capita, i.e. 82.7 k$[4].
This is enough for 2 years (= 4⁄2) considering the aforementioned annual consumption. Such a runway matches the upper bound of the interval of 6 to 24 months suggested here by 80,000 Hours (to its readers).
Answers and comments are welcome!
In addition, I believe donations are better expressed as a fraction of the net income since birth, which would account for unearned income.
About 9 k people have signed the Giving What We Can Pledge. I am happy to be one of them!
For x people, the levels of consumption and savings would be multiplied by x. So, for example for a family with 2 parents and 2 children, the suggested annual consumption and total savings as a fraction of the real global GDP per capita would be 8 (= 2*4) and 16 (= 4*4).
Calculated based on the real global GDP per capita in 2021 of 17.081 k 2017-$ from The World Bank, and the ratio between the value of 1 $ in 2017 and now of 1.21 from in2013dollars, whose product is 20.668 k$.