What Founders Pledge calls âinvestment-like giving opportunitiesâ are very different from what GiveWell calls âflow-through effectsâ. The latter is about how (for example) a family that doesnât have to deal with a child getting malaria may have more resources to deal with (for example) girlâsâ education.
I think flow-through effects would only change the analysis if they can compound long enough at a high enough rate or the marginal cost-effectiveness of the best interventions decreases enough over time. If the relative increase in benefits from the charity per year since intervening decrease enough, or even to 0, and the same intervention (or another) will be available at the same cost-effectiveness in the future, then you can just think of it like shifting when the flow-through effects happen.
GiveWell includes benefits from the long-term increase in income in their malaria cost-effectiveness analyses for AMF and MC, and it accounts for 14% to 43% of the value generated by the intervention, or a relative increase of 16% to 75% over the life-saving, depending on the region and charity. They assume it takes 10 years before you even start seeing these benefits, and they discount them 4%/âyear. Stock returns after discounting 4%/âyear are higher on average over 10 years, and this comparison is unfair to stocks, because the value of the flow-through effects has to be spread out over the beneficiaryâs lifetime, not just 10 years.
As far as I can tell, they donât consider other economic effects, e.g. on other people besides immediately family. Maybe it should be passed through to their descendants.
They did briefly discuss investment-like giving opportunities in section 2.1.
What Founders Pledge calls âinvestment-like giving opportunitiesâ are very different from what GiveWell calls âflow-through effectsâ. The latter is about how (for example) a family that doesnât have to deal with a child getting malaria may have more resources to deal with (for example) girlâsâ education.
My mistake.
I think flow-through effects would only change the analysis if they can compound long enough at a high enough rate or the marginal cost-effectiveness of the best interventions decreases enough over time. If the relative increase in benefits from the charity per year since intervening decrease enough, or even to 0, and the same intervention (or another) will be available at the same cost-effectiveness in the future, then you can just think of it like shifting when the flow-through effects happen.
GiveWell includes benefits from the long-term increase in income in their malaria cost-effectiveness analyses for AMF and MC, and it accounts for 14% to 43% of the value generated by the intervention, or a relative increase of 16% to 75% over the life-saving, depending on the region and charity. They assume it takes 10 years before you even start seeing these benefits, and they discount them 4%/âyear. Stock returns after discounting 4%/âyear are higher on average over 10 years, and this comparison is unfair to stocks, because the value of the flow-through effects has to be spread out over the beneficiaryâs lifetime, not just 10 years.
As far as I can tell, they donât consider other economic effects, e.g. on other people besides immediately family. Maybe it should be passed through to their descendants.