The view that altruists should invest and later donate financial resources, instead of donating them now, is sometimes called patient philanthropy. The October 2020 Founders Pledge report Investing to Give estimated the expected impact of investing funds in the stock market and donating them after 10 years to be 9x that of donating at the time of writing for longtermist causes, 2.1x for global health and 4.2x for animal welfare. 

The base rate for relationship dissolution is high. If you split from your partner, a division of assets and debts may be on the cards. For example, Australia family law courts can order a division of any property between you and your de facto own (regardless of whether you own it together or separately) if they’re satisfied the de facto relationship lasted at least two years.

Here is a hypothetical example: Say your (former) partner has $100K in cash and $50K in stocks to a total of $150K net worth. Say you have have $25K cash, $300K invested in stocks and $25K in bonds to a total of $350K. To save money on rent, you moved in together for 2 or more years then broke up. Your incomes are the same but your savings rate is higher. This is a difference of $200K in assets resulting in a $100K transfer of assets to her. GiveWell's estimate is around $3,000-$5,000 per life saved. 

So what could you do? Some ideas are:

InterventionCosts ($AUD)Risks
Financial Agreement (Binding Financial Agreement or Prenup)

$5,000 each = $10,000

Legal advice required re: need to renew, after major life events

Renewal costs


As a rule of thumb, 50% are invalidated by courts

After major life events like inheritance, home purchase, births, marriage you may need to renew the prenup and your partner may refuse

Does not apply to future relationships only your current partner

Your partner’s lawyer will likely advise them against signing the prenup and if you want to breakup with them if they don’t sign, the agreement can be invalidated in court for being signed under duress

Don’t cohabitate. Don’t marry. Etc.Say your rent would be $600 a week combined split 2-ways to $300 each or $450 on your own. You will forgo savings of around $7,800 each a year each by not cohabitating 
Reduce your income This could limit your future giving more than asset division, depending on the size of your investment vs the size of your income and the likelihood of relationship dissolution
Certain Trust structuresThe total cost of establishing a trust is between $1000 and $2000. Maintaining a typical family trust may cost a further $1500 to $2500 in accountancy fees each year, plus a yearly filing fee and fees required for the preparation of an annual tax return for the trust.

The kind of Trusts that can protect assets from asset division require you to relinquish some control to third parties (family or friends) who may not follow your wishes. 

Even trusts can also be set aside by Courts when it comes to asset division.

Donate now until your assets and debts are not greater than your partners


This compromises the patient philanthropist strategy. You could give to funds established for patient philanthropy however.

Hope for an amicable split$0People change during and after breakups. And, the reason you breakup may be that your partner didn't share your values. Your (former) partner may also be influenced by third parties, like subsequent partners





More posts like this

Sorted by Click to highlight new comments since:

At least in the US, using a donor-advised fund should address this problem. The money is irrevocably donated to charity, offering protection against your partner, your future creditors, your future self(!), etc. But it can grow until you're ready to devote it to charitable ends.

The Founders Pledge analysis seems to omit consideration of flow-through effects (essentially, the idea that charitable impact is also compounding, not only investment returns), which I think would make investing to give look significantly worse.

They did briefly discuss investment-like giving opportunities in section 2.1.

What Founders Pledge calls “investment-like giving opportunities” are very different from what GiveWell calls “flow-through effects”. The latter is about how (for example) a family that doesn’t have to deal with a child getting malaria may have more resources to deal with (for example) girl’s’ education.

My mistake.

I think flow-through effects would only change the analysis if they can compound long enough at a high enough rate or the marginal cost-effectiveness of the best interventions decreases enough over time. If the relative increase in benefits from the charity per year since intervening decrease enough, or even to 0, and the same intervention (or another) will be available at the same cost-effectiveness in the future, then you can just think of it like shifting when the flow-through effects happen.

GiveWell includes benefits from the long-term increase in income in their malaria cost-effectiveness analyses for AMF and MC, and it accounts for 14% to 43% of the value generated by the intervention, or a relative increase of 16% to 75% over the life-saving, depending on the region and charity. They assume it takes 10 years before you even start seeing these benefits, and they discount them 4%/year. Stock returns after discounting 4%/year are higher on average over 10 years, and this comparison is unfair to stocks, because the value of the flow-through effects has to be spread out over the beneficiary's lifetime, not just 10 years.

As far as I can tell, they don't consider other economic effects, e.g. on other people besides immediately family. Maybe it should be passed through to their descendants.

If you are planning to do investing to give, can’t you just put the money in a DAF now? Then it will be protected not only from litigants but also from the chance that you become less generous over time.

Curated and popular this week
Relevant opportunities