Hi Owen, even if you’re confident today about identifying investment-like giving opportunities with returns that beat financial markets, investing-to-give can still be desirable. That’s because investing-to-give preserves optionality. Giving today locks in the expected impact of your grant, but waiting allows for funding of potentially higher impact opportunities in the future.
The secretary problem comes to mind (not a perfect analogy but I think the insight applies). The optimal solution is to reject the initial ~37% of all applicants and then accept the next applicant that’s better than all the ones we’ve seen. Given that EA has only been around for about a decade, you would have to think that extinction is imminent for a decade to count for ~37% of our total future. Otherwise, we should continue rejecting opportunities. This allows us to better understand the extent of impact that’s actually possible, including opportunities like movement building and global priorities research. Future ones could be even better!
But the investment-like giving opportunities also preserve optionality! This is the sense in which they are investment-like. They can result in more (expected) dollars held in a future year (say a decade from now) by careful thinking people who will be roughly aligned with our values than if we just make financial investments now.
Thanks for the clarification, Owen! I had mis-understood ‘investment-like’ as simply having return compounding characteristics. To truly preserve optionality though, these grants would need to remain flexible (can change cause areas if necessary; so grants to a specific cause area like AI safety wouldn’t necessarily count) and liquid (can be immediately called upon; so Founder’s Pledge future pledges wouldn’t necessarily count). So yes, your example of grants that result “in more (expected) dollars held in a future year (say a decade from now) by careful thinking people who will be roughly aligned with our values” certainly qualifies, but I suspect that’s about it. Still, as long as such grants exist today, I now understand why you say that the optimal giving rate is implausibly (exactly) 0%.
If I recall correctly (and I may well be wrong), the secretary problem’s solution only applies if your utility is linear in the ranking of the secretary that you choose—I’ve never come across a problem where this was a useful assumption.
Interesting! The secretary problem does seem relevant as a model, thanks!
Given that EA has only been around for about a decade, you would have to think that extinction is imminent for a decade to count for ~37% of our total future.
I think it’s implausible that the optimal giving rate today could be 0%. This is because many giving opportunities function as a form of investment, and we’re pretty sure that the best of those outperform the financial market. (I wrote more about ~this in this post: https://forum.effectivealtruism.org/posts/Eh7c9NhGynF4EiX3u/patient-vs-urgent-longtermism-has-little-direct-bearing-on )
Hi Owen, even if you’re confident today about identifying investment-like giving opportunities with returns that beat financial markets, investing-to-give can still be desirable. That’s because investing-to-give preserves optionality. Giving today locks in the expected impact of your grant, but waiting allows for funding of potentially higher impact opportunities in the future.
The secretary problem comes to mind (not a perfect analogy but I think the insight applies). The optimal solution is to reject the initial ~37% of all applicants and then accept the next applicant that’s better than all the ones we’ve seen. Given that EA has only been around for about a decade, you would have to think that extinction is imminent for a decade to count for ~37% of our total future. Otherwise, we should continue rejecting opportunities. This allows us to better understand the extent of impact that’s actually possible, including opportunities like movement building and global priorities research. Future ones could be even better!
But the investment-like giving opportunities also preserve optionality! This is the sense in which they are investment-like. They can result in more (expected) dollars held in a future year (say a decade from now) by careful thinking people who will be roughly aligned with our values than if we just make financial investments now.
Thanks for the clarification, Owen! I had mis-understood ‘investment-like’ as simply having return compounding characteristics. To truly preserve optionality though, these grants would need to remain flexible (can change cause areas if necessary; so grants to a specific cause area like AI safety wouldn’t necessarily count) and liquid (can be immediately called upon; so Founder’s Pledge future pledges wouldn’t necessarily count). So yes, your example of grants that result “in more (expected) dollars held in a future year (say a decade from now) by careful thinking people who will be roughly aligned with our values” certainly qualifies, but I suspect that’s about it. Still, as long as such grants exist today, I now understand why you say that the optimal giving rate is implausibly (exactly) 0%.
If I recall correctly (and I may well be wrong), the secretary problem’s solution only applies if your utility is linear in the ranking of the secretary that you choose—I’ve never come across a problem where this was a useful assumption.
Interesting! The secretary problem does seem relevant as a model, thanks!
FWIW, many of us do think that. I do, for example.