Giving Later

A while back I wrote about giv­ing later on my blog and was en­couraged to share it here. The origi­nal au­di­ence was mostly economists.

Be­fore get­ting to the post, I would like to say that I think this is a topic that war­rants fur­ther at­ten­tion. Thus, I am in­ter­ested in find­ing peo­ple who have se­ri­ously thought about giv­ing later (com­ing to a con­clu­sion on ei­ther side) and in­ter­view­ing them for both a fu­ture blog se­ries and fur­ther dis­cus­sion on this fo­rum. Please get in touch by e-mail if in­ter­ested.

Origi­nal post:


One of the more im­por­tant things I’ve changed my mind about re­cently is the best cause to donate to. I now put the most cre­dence on the pos­si­bil­ity that the best op­tion is donat­ing to a fund that in­vests the money and dis­burses strate­gi­cally in the fu­ture. I will re­fer to this as “giv­ing later”, though I ac­tu­ally sup­port giv­ing now to a donor-ad­vised fund set up to dis­burse in the fu­ture, for the value that donat­ing now can have for en­courag­ing oth­ers to donate (and be­cause of the risk that even if one thinks one will donate later, one will at some point change one’s mind).

There are sev­eral rea­sons why I pre­fer a fund that dis­burses in the fu­ture. First, I be­lieve peo­ple cur­rently dis­count the fu­ture too much (see hy­per­bolic dis­count­ing, cli­mate change). If peo­ple dis­count the fu­ture, that causes the rate of re­turn on in­vest­ments to always be higher than the growth rate (else peo­ple would not be will­ing to in­vest). In eco­nomics, the Ram­sey equa­tion is of­ten used to de­ter­mine how much a so­cial plan­ner should dis­count fu­ture con­sump­tion. It is speci­fied by , where is the real rate of re­turn on in­vest­ment, is the ex­tent to which marginal util­ity de­creases with con­sump­tion, is the growth rate, and rep­re­sents pure time prefer­ences. Un­less one per­son­ally puts a par­tic­u­larly high value on , it makes sense to in­vest to­day and spend later to take ad­van­tage of the gap be­tween the real rate of re­turn on in­vest­ment (~7%) and the growth rate (~3-4%).

How should one set ? This is a huge open ques­tion. Like most effec­tive al­tru­ists, I do not be­lieve one should treat peo­ple to­day any differ­ently from peo­ple to­mor­row. But one might still wish to place a non-zero value on due to the risk that peo­ple will sim­ply not ex­ist in the fu­ture – that nu­clear war or other dis­asters will wipe them out. Economists tend to like to re­spect peo­ple’s pure time prefer­ences and so end up with rather higher val­ues than effec­tive al­tru­ists. The Stern re­port fa­mously set =0.1, while Nord­haus prefers =3. The cur­rent Trump ad­minis­tra­tion set up to 7, which jus­tifies not do­ing any­thing about cli­mate change (see also this nice figure). With a mod­est , it makes sense to in­vest now and give later ac­cord­ing to the Ram­sey equa­tion.

A sec­ond rea­son that I pre­fer a fund that dis­burses in the fu­ture is that I think we have very limited knowl­edge to­day and that our knowl­edge is in­creas­ing. I am con­cerned about the prob­lem that re­search re­sults do not gen­er­al­ize all that well, but with re­spect to eco­nomic de­vel­op­ment I am op­ti­mistic that the situ­a­tion can im­prove. With re­spect to tech­nolog­i­cal change which could bring huge benefits or risks, I think we know even less about the prob­lems fu­ture gen­er­a­tions will face and may be able to un­der­stand them bet­ter in the fu­ture. It seems un­likely to me that we are at the ex­act mo­ment in time, out of all pe­ri­ods of time from here on out into the fu­ture, that we ac­tu­ally have the best op­por­tu­nity to do good. We may not rec­og­nize the best mo­ment when it comes, but that just pushes the ar­gu­ment back a step: I also think it un­likely that we are at the best mo­ment, out of the whole fore­see­able fu­ture, to have the best com­bi­na­tion of knowl­edge and op­por­tu­nity to do good.

Th­ese are not novel ar­gu­ments. Some form of them is made in sev­eral other blog posts, for ex­am­ple. Some of the crit­i­cisms com­monly raised are whether dona­tions to­day can help to im­prove the long-run growth rate and whether it is fea­si­ble to de­sign and main­tain a fund that dis­burses later with­out value drift. There are sadly few long-run fol­low-ups of de­vel­op­ment in­ter­ven­tions, but it seems prima fa­cie un­likely that in­ter­ven­tions will have a long-run effect on the growth rate, given the growth rate is a func­tion of many, many things. I ex­pect most effects to ta­per off over time but ac­knowl­edge that fur­ther re­search in this area is needed. With re­gards to it be­ing difficult to build a per­sis­tent and safe in­sti­tu­tion, I agree that this is challeng­ing, but not al­to­gether im­pos­si­ble, and I know sev­eral peo­ple work­ing on this right now.

There are sev­eral rea­sons to be op­ti­mistic. First, this in­sti­tu­tion could take into con­sid­er­a­tion the risk of e.g. nu­clear war or val­ues drift in set­ting its dis­burse­ment scheme, so that it has a more ag­gres­sive dis­burse­ment scheme as the risks go up (in the ex­treme case, dis­burs­ing ev­ery­thing right away). Se­cond, it is easy to think of a “lower-bound” ver­sion of this that would not be at much risk for val­ues drift. For ex­am­ple, sup­pose a fund ex­isted that dis­bursed the min­i­mum amount pos­si­ble ev­ery year (U.S. char­i­ties, for ex­am­ple, are re­quired to dis­burse 5% per year), and then dis­bursed the rest in year 10. In the sim­plest pos­si­ble ver­sion of this, think of a cash trans­fer char­ity like GiveDirectly which gives out cash to peo­ple in de­vel­op­ing coun­tries via mo­bile money trans­fers. One could set up the in­sti­tu­tion to au­to­mat­i­cally make these pay­ments over time with­out any de­vi­a­tions al­lowed (say, through a smart con­tract). Un­less mo­bile money is no longer in use 10 years from now, this op­tion would seem to strictly dom­i­nate giv­ing cash trans­fers to­day. What about other types of trans­fers, like to some of GiveWell’s top-rated char­i­ties, the Against Malaria Foun­da­tion or De­worm the World? It is pos­si­ble that in­ter­ven­tions are par­tic­u­larly cheap now, while they may be more ex­pen­sive (for the same benefit) in the fu­ture. For ex­am­ple, most of the gains in life ex­pec­tancy have been due to im­prove­ments in san­i­ta­tion and ba­sic health­care re­duc­ing un­der-5 mor­tal­ity; it is a lot harder to in­crease life ex­pec­tancy from 79 to 80. There are some ar­gu­ments that can be made against this. I won’t get into them too much, though I will note that un­der some con­di­tions this situ­a­tion could be ad­dressed by let­ting the in­vest­ments com­pound for longer be­fore us­ing them. In any case, my as­sump­tion is that if the calcu­lus re­ally works out this way, we are back in the world in which the or­ga­ni­za­tion dis­burses ev­ery­thing right away. Fur­ther, if one con­sid­ers the farther fu­ture and cares about fu­ture po­ten­tial lives, one may wish to place more em­pha­sis on avoid­ing ex­is­ten­tial or ex­tinc­tion risks, and it is not clear that we are at a par­tic­u­larly good time in his­tory to do that.

I think it ap­peals psy­cholog­i­cally to many peo­ple—my­self in­cluded—to think that we are liv­ing at a par­tic­u­larly im­por­tant time. How­ever, I rec­og­nize that peo­ple have thought this through­out his­tory. As more time has passed, I have be­come in­creas­ingly con­fi­dent that my gut an­tipa­thy to the idea that it’s bet­ter to “give later” is just a cog­ni­tive bias.

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