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For the question of whether to "save to give," MacAskill's paper on the topic was very useful for me. One crucial consideration is whether my donations would grow more in someone else's hands.

E.g. I give $100k to AMF means fewer die from malaria, which means more economic growth. Does this generate more than the ~7%/year my stocks might? I find that people often neglect this counterfactual.

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How Much to Give is a Pragmatic Question

by Jeff Kaufman 🔸

Dec 24 20242 min read 13

81

Effective givingCareer choiceDemandingness of moralityEarning to giveGiving Season (2024)Personal finance

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How Much to Give is a Pragmatic Question

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I was recently talking to someone who had recently started thinking about effective altruism, and was trying to figure out how to work it into their life. They were established in their career, it paid well, and their background wasn't obviously a good fit for direct work, so they were naturally considering earning to give. This prompts a question of how much to give.

"How much?" is a question people have struggled with for a very long time. Donating 10% of income has a long history, and it's common for EAs to pledge to do this; donating 2.5% of wealth is also traditional. If you're earning to give, however, you might want to give more: Julia and I have been giving 50%; Allan Saldanha has been giving 75% since 2019. How should one decide?

I was hoping there were good EA blog posts on this topic, but after spending a while with EA Forum search and Google I didn't find any. Claude kept telling me I should check out Jeff Kaufman's blog, but all I found was a rough post from 2011. So here's an attempt that I think is better than my old post, but still not great.

While EAs talk a lot about principles, I think this is fundamentally a pragmatic question. I find the scale of the world's problems overwhelming; no one has enough money to eliminate poverty, disease, or the risk we make ourselves extinct. This is not to say donations don't matter—there are a lot of excellent options for making the world better—but there's not going to be a point where I'm going to be satisfied and say "Good! That's done now." This gives a strong intellectual pull to donate to the point where donating another dollar would start to decrease my altruistic impact, by interfering in my work; burning out does not maximize your impact!

In the other direction, I'm not fully altruistic. I like some amount of comfort, there are fun things I want to do, and I want my family to have good lives. I'm willing to go pretty far in the altruism direction (I donate 50% and took a 75% pay cut to do more valuable work) but it's a matter of balance.

Which means the main advice I have is to give yourself the information you need to make a balanced choice. I'd recommend making a few different budgets: how would your life look if you gave 5%? 10%? 20%? In figuring out where you'd cut it might be helpful to ignore the donation aspect: how would your budget change if your industry started doing poorly?

In some ways Julia and I had this easy: we got into these ideas when we were just starting out and living cheaply, while we could still be careful about which luxuries to adopt and maintain inexpensive tastes. It's much harder to cut back! So another thing I'd recommend, especially if you haven't yet reached peak earning years, is to plan to donate a disproportionately large fraction of pay increases. For example, 10% of your (inflation adjusted!) 2024 salary plus 50% of any amount over that.

Overall, the goal is to find a level where you feel good about your donations but are also still keeping enough to thrive. This is a very personal question, and people land in a bunch of different places. But wherever you do end up, I'm glad to be working with you.

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Christoph Eggert🔸3mo32

From my point of view, the biggest issue that makes this question an everlasting companion for most is uncertainty. Even if I could currently give 50% away and have the same standard, how will that look like in a few years? What if I lose my job in my 50s and struggle to find anything? What if my abilities will become meaningless because of technological advancements even earlier?

I would assume for most it's not a question of consumption vs. donations, as many essays and books make it sound. It's about the balance between how much to put into your own financial securement vs. donating. This is probably much easier to answer for promising 80,000 hours supported geniuses, but a very different picture for the Average Joe who struggled in school and to find employment in the first place. It's probably impossible to give clear answers when taking that into consideration, though.

Grayden 🔸3mo15

You could try putting cash into a separate savings account earmarked for donation. When you are happy that you don’t need it, donate it. (But maybe over a few years for tax efficiency)

Joseph3mo12

You've put into clear words the struggle that I have always had. If I had a guaranteed income or some high level of confidence that I would always be able to find employment and gain income of a certain level, then I'd find it quite easy to give away money. It wouldn't be as scarce of a resource.

There are certain parallels to the idea of put on your own oxygen mask first, as we do need to make sure we are okay before helping others. But I also suppose that the really tricky part is considering what is okay 'enough' for us.

Davidmanheim3mo7

I strongly agree that you need to put your own needs first, and think that your level of comfort with your savings and ability to withstand foreseeable challenges is a key input. My go-to in general, is that the standard advice of keeping 3-6 months of expenses is a reasonable goal - so you can and should give, but until you have saved that much, you should at least be splitting your excess funds between savings and charity. (And the reason most people don't manage this has a lot to do with lifestyle choices and failure to manage their spending - not just not having enough income. Normal people never have enough money to do everything they'd like to; set your expectations clearly and work to avoid the hedonic treadmill!)

Alejandro Ruiz2mo8

That's why my own approach is "FIRE [Financial Independence, Retire Early] first". In which one first plans for a frugal retirement (which, for the USA, requires way less than $1M, possibly less than half of that, so it's highly achievable, and mainly depends on the strength of your frugal muscles, not your above-average earning power). That takes about 7 to 10 years, which can be shortened to 5 if you work hard or are lucky. That amount is than set apart in case your life takes a wrong left turn.

Then you keep working, and either donate everything (since you're already set for life), or at least as high of a percentage you're comfortable with.

You have to consider, e.g. the cost of raising kids, since the amount planned for a 50+ years retirement won't have those expenses considered (in the long run, they are "temporary")
Plus the general category of "thriving", since if you are optimizing for effectiveness you're likely not optimizing for minimum absolute cost. That's why I'm not just linking Jacob Lund Fisker and telling you $7000/year is enough (and mind, he's kept up at least until most recent update in 2019)

As for Average Joe... most limiting resource isn't money at all, but willpower and other cognitive powers. Fortunately, it's not like the Average Joe is EA or vice versa.

In any case, consider that my answer of "how much to put into your own financial security vs. donating". Not in terms of splitting a wage, but of bypassing the question entirely.

Karla Still 🔸15d4

I just found that Sebastian Schwiecker had written a blog post on the same topic.
Because of

I was hoping there were good EA blog posts on this topic, but after spending a while with EA Forum search and Google I didn't find any.

... I'm leaving this link here :) https://effektiv-spenden.org/blog/wie-viel-soll-ich-spenden/

Davidmanheim3mo15

To follow on to your point, as it relates to my personal views, (in case anyone is interested,) it's worth quoting the code of Jewish law. It introduces its discussion of Tzedakah by asking how much one is required to give. "The amount, if one has sufficient ability, is giving enough to fulfill the needs of the poor. But if you do not have enough, the most praiseworthy version is to give one fifth, the normal amount is to give a tenth, and less than that is a poor sign." And I note that this was written in the 1500s, where local charity was the majority of what was practical; today's situation is one where the needs are clearly beyond any one person's ability - so the latter clauses are the relevant ones.

So I think that, in a religion that prides itself on exacting standards and exhaustive rules for the performance of mitzvot, this is endorsing exactly your point: while giving might be a standard, and norms and community behavior is helpful in guiding behavior, the amount to give is always a personal and pragmatic decision, not a general rule.

PeterSlattery2mo9

This is extremely relevant for me as I have been thinking a lot about when to start making more serious donations. I discussed some previous blockers here which haven't been resolved. I am therefore considering commissioning some research (ideally with others).

Broadly I'm interested in better understanding the 'donators dilemma': if you give money now, you forego the later opportunity to 'give better' due to having improved information, and to 'give more' due to passive income. Also to benefit from increased financial security that might enable you to have more direct impact (e.g., by taking a lower paid role that has higher impact, or starting a new initiative).

I want somebody to systematically review the literature for to capture the different arguments and trade-offs for giving now versus later. Then to create some sort of accessible decision-making tool or process that people like me can use to decide on an appropriate threshold or strategy to have WRT to giving now versus later.

If anyone is also interested in funding this or knows some existing tools, then please let me know.

OGTutzauer🔸2mo9

For the question of whether to "save to give," MacAskill's paper on the topic was very useful for me. One crucial consideration is whether my donations would grow more in someone else's hands.

Josh 🔹3mo4

Thank you for writing this. I have been struggling with this question myself, and your recommendation will hopefully give me motivation to finally getting around to creating a budget

Nithin Ravi🔸3mo2

Having defined budgets has been very helpful for me! Otherwise, I fall prey to the perils of maximization.

Miquel Banchs-Piqué (prev. mikbp)2mo2

I like your posts. They are short and informative.

I really wonder how you manage to have the time to work, take care of the kids and do other stuff like writing... good posts. It is not only that the topic is usually interesting, but writing short informative posts is usually much more time-consuming that writing the same post as a long and not specific/without links version. How do you do it?

Jeff Kaufman 🔸2mo2

Thanks!

I think it's some combination of temperament (I just really like writing!) and practice (I've been writing posts multiple times a week for over a decade)?

I think you're probably also only seeing my better posts, since I don't cross-post most things to the Forum?