Until recently I thought Julia and I were digging a bit into savings to donate more. With the tighter funding climate for effective altruism we thought it was worth spending down a bit, especially considering that our expenses should decrease significantly in 1.5y when our youngest starts kindergarten.
I was surprised, then, when I ran the numbers and realized that despite donating 50% of a reduced income, we were $9k (0.5%) [1] richer than when I left Google two years earlier.
This is a good problem to have! After thinking it over for the last month, however, I've decided to start earning less: I've asked for a voluntary salary reduction of $15k/y (10%). [2] This is something I've been thinking about off and on since I started working at a non-profit: it's much more efficient to reduce your salary than it is to make a donation. Additionally, since I'm asking others to fund our work I like the idea of putting my money (or what would be my money if I weren't passing it up) where my mouth is.
Despite doing this myself, voluntary salary reduction isn't something that I'd like to see become a norm:
I think it's really valuable for people to have a choice about where to apply their money to making the world better.
The organization where you have a comparative advantage in applying your skills will often not be the one that can do the most with additional funds, even after considering the tax advantages.
I especially don't think this is a good fit for junior employees and people without a lot of savings, where I'm concerned social pressure to take a reduction could keep people from making prudent financial decisions.
Still, I think this is a good choice for me, and I feel good about efficiently putting my money towards a better world.
[1] In current dollars. If you don't adjust for inflation it's $132k
more, but that's not meaningful.
[2] I'm not counting this towards my 50% goal, just like I'm not counting the pay cut I took when I stopped earning to give.
Why don't you consider the reduction as part of of your donations? Unlike taking a direct-work job (where the counterfactual and non-monetary compensation questions are complicated and any estimate will involve a lot of guesswork)[1] your salary reduction is from a known very well-understood baseline.
I'm sympathetic overall to your desire for this not to become a norm in EA, due to the concerns you listed, but I would (and do) count it towards my donation target, and would generally advise others to do so.
There's an argument in your case that your counterfactual salary is extremely clear. I would expect for most people taking a salary reduction, the answer is much harder. I'd estimate that half of people I've heard of leaving EtG jobs would have had a hard time being happy at that job any more, and many more people are like me where I haven't worked in industry for 7 years and so I would have to guess, which makes it a bit of a weird norm question if a peer of mine gets to claim a 50% reduction, but I have no idea if I could have made double my (reduced) salary in industry in a very distant counterfactual world.
I do list this on my donations page, but I'm trying to be pretty conservative in what I count as my donations: only the actual money I actually donate. So I don't count it towards my 50% and put it in grey italics like my employer donation matches, donations in exchange for work, the PayPal 1% match, and other counterfactual money moved that I don't fully include.
I think it's fine (and probably good) if others are less strict about this, though!