<re-posted from Shortform>

<medium-term lurker, first time poster; also, Epistemic Status = spitballing>

Has anyone encountered the idea of 'direct payment' philanthropy in the form of investment portfolios?

As readers of this forum may know, Direct Payment philanthropy involves an attempt to improve the lives of those living in poverty by giving them direct cash payments, as opposed to by contributing 'indirectly' to philanthropic organizations that seek to improve some subset of conditions facing them. While inspired in part by that model, this notion is on a fundamentally different tack and would clearly not address profound poverty directly, though it might hope to mitigate 'poverty in the future' for families whose margins do not admit retirement planning and the like.

With due acknowledgement that it is out of scope in terms of the central question of maximizing altruistic impact, in the traditional EA sense, the particular idea was conceived as an attempt to promote equity and increase representation among public investors by giving charitable gifts in the form of investment portfolios to under-represented households in the hope of reducing barriers of entry to participation in equity markets, particularly those resulting from the legacy of racial inequality, as well as to multiply whatever small power public investors have in addressing that legacy through engagement with companies by increasing the proportion of investors who prioritize racial justice (N.B. there are a variety of opinions on how 'impact investment' can work and, indeed, whether it can at all).

My initial searches and direct queries did not turn up any examples or discussions of the idea, and several of my correspondents suggested that I solicit feedback in this forum.

If you have heard of any discussion or example of a similar program, I'd be glad to know it.

Thanks, stay safe and keep up the great work!


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Aug 27, 2020


If I understood you correctly it seems that the closest thing that you are looking for is microfinance, i.e., you borrow the poor money and they (in theory) prosper and even return the money to you, with an interest. However, microfinance don't seem to be very effective. Here is GiveWell analysis on it https://www.givewell.org/international/economic-empowerment/microfinance

Thanks for remarking that clarification: rather than expecting any ROI, the idea here would be to give away, free and clear, a charitable donation directly to the recipient - as in the 'direct payment' model - but in the form of a securities portfolio, rather than in cash.

Thanks again!