Do people really think that giving away over 90% of your wealth is the best thing to do for your wellbeing (via improving your reputation)?
Moreover, wealthy donors donating most of their wealth to boost their reputation via donations would still be better than just spending the wealth on luxuries. Especially if the donations flow through an evidence-based impact-focussed process whose outcome does not depend on them (as it overwhelmingly is the case for Open Philanthropy).
I don’t disagree but I also don’t find them evidently true.
For a beginner billionaire of precisely $1b net worth, why is giving away $900m and only spending $100m not the best thing for wellbeing? How to do better?
And why is spending on reputation-boosting donations better than on luxuries? I get that donations to effective charities are better, but other donations can be orders of magnitudes less effective. On the other hand, luxury brands like LV and Hermès have a gross profit margin of around 70%, buying them is essentially a wealth transfer to the brands’ owners, who usually engage in substantial philanthropic activities. Maybe their activities are more effective to offset the cost of goods?
I don’t disagree but I also don’t find them evidently true.
I think along the same lines. A priori, I think it makes the most sense to assume that billionaire would be happier by donating 900 M$ than not donating. Personally, I am confident that I am happier donating 10 % of my net income (as I have done in the past 2 years) than not donating. I guess this is even more true the greater the wealth.
However, I do not think this should be a major consideration. If I prevented a child from drowning, I would have done a great thing. It does not matter much if I did it to boost my reputation, please the bystanders at the beach, or whatever. The major consideration is that I saved someone’s life!
And why is spending on reputation-boosting donations better than on luxuries?
I expect the spending of the owners of luxury brands to be much less cost-effective (maybe at most 1 % as effective) than longtermist organisations and funds recommended by GWWC. As a 1st order approximation, maybe one can assume the spending of wealthy donor is as effective as transferring wealth to their countries.
Great post, James!
Moreover, wealthy donors donating most of their wealth to boost their reputation via donations would still be better than just spending the wealth on luxuries. Especially if the donations flow through an evidence-based impact-focussed process whose outcome does not depend on them (as it overwhelmingly is the case for Open Philanthropy).
I don’t disagree but I also don’t find them evidently true.
For a beginner billionaire of precisely $1b net worth, why is giving away $900m and only spending $100m not the best thing for wellbeing? How to do better?
And why is spending on reputation-boosting donations better than on luxuries? I get that donations to effective charities are better, but other donations can be orders of magnitudes less effective. On the other hand, luxury brands like LV and Hermès have a gross profit margin of around 70%, buying them is essentially a wealth transfer to the brands’ owners, who usually engage in substantial philanthropic activities. Maybe their activities are more effective to offset the cost of goods?
I think along the same lines. A priori, I think it makes the most sense to assume that billionaire would be happier by donating 900 M$ than not donating. Personally, I am confident that I am happier donating 10 % of my net income (as I have done in the past 2 years) than not donating. I guess this is even more true the greater the wealth.
However, I do not think this should be a major consideration. If I prevented a child from drowning, I would have done a great thing. It does not matter much if I did it to boost my reputation, please the bystanders at the beach, or whatever. The major consideration is that I saved someone’s life!
I expect the spending of the owners of luxury brands to be much less cost-effective (maybe at most 1 % as effective) than longtermist organisations and funds recommended by GWWC. As a 1st order approximation, maybe one can assume the spending of wealthy donor is as effective as transferring wealth to their countries.