Jonathan Harris, PhD | jonathan@total-portfolio.org
Total Portfolio Project’s goal is to help altruistic investors prioritize the most impactful funding opportunities, whether that means grants, investing to give or impact investments. Projects we’ve completed range from theoretical research (like in this post), to advising on high impact investment deals, to strategic research on balancing give now versus later for new major donors.
Investment strategies for longtermist funders
Research That Can Help Us Improve, Epistemic Institutions, Economic growth
Because of their non-standard goals, longtermist funders should arguably follow investment strategies that differ from standard best practices in investing. Longtermists place unusual value on certain scenarios and may have different views of how the future is likely to play out.
We’d be excited to see projects that make a contribution towards producing a pipeline of actionable recommendations in this regard. We think this is mostly a matter of combining a knowledge of finance with detailed views of the future for our areas of interest (i.e. forecasts for different scenarios with a focus on how giving opportunities may change and the associated financial winners/losers). There is a huge amount of room for research on these topics. Useful contributions could be made by research that develops these views of the future in a financially-relevant way, practical analysis of existing or potential financial instruments, and work to improve coordination on these topics.
Some of the ways the strategies of altruistic funders may differ include:
Mission-correlated investing. That is, making investments such that they end up with more money in worlds where money is relatively more valuable. This increases the expected amount of good done. In some cases, but not all, it will also reduce the variance in the amount of good done (‘mission hedging’).
Non-standard views on expected financial returns. Longtermist investors should arguably have non-standard attitudes toward and definitions of risk (including correlation with other longtermists). This could make certain investments more attractive. In addition, if altruistic research suggests more accurate views of the future this may also be a useful source of excess returns. Furthermore, longtermists may want to operate with a discount rate that differs from normal (either more or less patient).
As is already part of our approach, some investments may also generate impact of their own or have strategic value via developing relationships in new areas.
Note: This builds on an idea from a recent post by Holden Karnofsky. However, I don’t see it in your current project ideas list nor in the other comments here.