All of Grayden's Comments + Replies

Don’t wait – there’s plenty more need and opportunity today

I've written a post about why stepping up expenditure during a difficult time is often the correct thing to do here.  I also talk about how I think the view of "let's wait and things will be easier in the future" is flawed.

EA for Jews - Proposal and Request for Comment

Great to have another person putting effort into making the world more altruistic and more effective!

I like the idea.

In terms of comment, I have two thoughts, both of which I think you have already thought about above. Firstly I think when creating a new organisation, you have to make sure you are creating something for which (1) there is a need and (2) there is not somebody already trying to meet that need already. At EA for Christians, we’ve found a need for two things: (a) thinking around how compatible EA is with Christianity (tl;dr it very much is)... (read more)

1BenSchifman10moThanks Grayden! Good points - I talked to Caleb from EA for Christians as well and he had similar suggestions. I'm fairly confident (1) and (2) are met, but I'll see what the response to this post and other outreach efforts are. If I do set up this group it'll be with broadly the same aims you identified for EA for Christians - namely, outreach, community building, etc. As far as making sure the organization is run by the right folks, that's certainly something on my mind as well. At this juncture I'm just looking to cast as wide a net as possible. My hope is that over time we attract a broad enough group of people that we can pick/identify people suited for specific roles, including a "CEO" or board chair etc - and no need for that to be me! Thanks again for the helpful comments. Cheers!
How You Can Counterfactually Send Millions of Dollars to EA Charities

Thanks for writing this article. I think you are spot on that many non-profit and for-profit organisations do not manage cash effectively.

A few comments:

  • The 2.16% doesn’t seem to me like a lower bound on interest if it’s in a bank account. If you invest in bonds, even short-term, you are exposed to capital fluctuations, so while it’s probably a good idea, it’s not a like-for-like comparison
  • The 5.51% return is unlikely going forwards. The last 20 years has seen unprecedented use of QE and a lowering & flattening of yield curves. I would assume eq
... (read more)
2Brendon_Wong1yThanks for sharing your thoughts! For point 1, I mention this in more detail in my response to GMcGowan—the 2.16% federal funds rate in 2019 was in fact a conservative estimate for bank yields. That can be seen by looking at my EA Forum article from 2019 which references bank savings yields of up to 2.4%. The accounts that offer a higher rate of interest (like the 2.4% accounts) do not fluctuate like bonds and have identical risk to other savings accounts because they’re all insured by the FDIC. They yield less in 2020, of course. I perform a more in-depth risk analysis of savings accounts and alternative options in my article from 2019. Regarding point 2, if we include 2% estimated inflation, then bonds would return 1% and a low-interest charity savings account would return -2%. If we adjust your estimates upwards to include inflation like my 5.51% figure, so 7% for equities and 3% for bonds, we get 3.8% (likely higher, say 4%, with rebalancing). Would you say that’s within the same ballpark? Regardless, I think future returns are very difficult to forecast, even with good causal explanations. With those assumptions, it would make sense to allocate more of the portfolio to stocks instead. Regarding point 3, yep, that’s a shortcoming of solely relying on Form 990 data. If we had the full data, I think it’s unlikely that would change the numbers by that much (say more than 50% higher or lower). I talk about this and other estimation issues in the “Estimation Methodology Caveats” section of the article.
Correlations Between Cause Prioritization and the Big Five Personality Traits

Really interesting article. Just one quick question: does high emotional stability mean low neuroticism?

4Ben Pace1y(Yes, I'm pretty sure this is the standard way to use those terms.)
Keynesian Altruism

That's a very interesting point I hadn't considered. Yes, if the expenditure is in emerging markets, your money likely goes even further during global recessions

Keynesian Altruism

Thanks for your comment.

I'm not advocating it because of the fiscal multiplier. That would be the cherry on the cake.

The first simple step is simply to say don't cut back expenditure because shrinking and regrowing an organisation is costly. Most charities (though EA ones are somewhat atypical) see their income reduced during bad times. And since most charities think in bland terms of x months of reserves, this means their expenditure fluctuates as well. This is an not efficient way to manage an organisation. In good times, build a buffer, s... (read more)

7Ramiro1yI wonder if exchange rates volatility during global recessions (usually, the US$ dollar and the Euro rise in relation to national currencies in developing countries) would add another point, at least for charities located in the developing world. (Personally, since my job is very stable and opportunities for investments scarce, I have been increasing my own donations to account for my declining consumption)
9Robert_Wiblin1yYep that sounds good, non-profits should aim to have fairly stable expenditure over the business cycle. I think I was thrown off your true motivation by the name 'Keynesian altruism'. It might be wise to rename it 'countercyclical' so it doesn't carry the implication that you're looking for an economic multiplier.
Keynesian Altruism

I think what you are referring to is an Anti-Nightingale. If you always sell after a market crash, you will most likely (as in mode, not mean) have poor returns, but that doesn't change the expected value from investing. The odds of a roulette wheel never change, but you can change your strategy to give you a >50% chance of coming away with a profit. My strategy will give you a >50% chance of coming away with an underperformance of the market, but will not change the underlying odds.

Another trap some people (including professional investors) ... (read more)

Keynesian Altruism

From a personal point of view, iff my utility curve is linear (i.e. losing 50% of my wealth would have a similar magnitude of utility change as gaining 50% additional wealth) and I know my date of death, then it would make sense to invest for as long as return on capital remains below GDP growth. I would be careful about saying "most market actors use a value of δ that's too high" because I think you can argue what they are doing is perfectly rational; if you're not sure if you'll reach retirement, you'll be less incl... (read more)

1Karl...4mo"In general, wealthier people are able to take more risks than poorer people (utility functions are more linear at higher wealth). Altruists represent these poorer people (this point is more relevant to global health and development than animal welfare and long-term future), so should be sensitive to undiversifiable risks. In other words, I don't think it's obvious that we should be more patient (I'm talking in general terms, not about the specifics of economic conditions right now)." I think there is a mistake in here. I suppose that the utility function of altruist is even more linear than the utility function of wealthy people. This is because the return in utility units for every poor individual we (as altruists) are donating to declines really strong but there are so many poor individuals (at least yet) that the good we can do is an almost linear function of the amount of money we can spend, so altruists should be nearly risk neutral. Despite this, I agree that it is not obvious that we should more patient.
Keynesian Altruism

I haven't. I think the key debate is whether the theory could work in practice, rather than whether the theory holds. In terms of modelling, I think it would be hard to quantify the benefits as the variables (in particular: (1) the cost of downsizing and then re-scaling an organisation, and (2) change in marginal CPLSE with respect to a change in GDP) are inherently difficult to measure. Do you have any thoughts about how we could do it?

1ShayBenMoshe1yI agree that it isn't easy to quantify all of these. Here is something you could do, which unfortunately does not take into account the changes in charities operation at different times, but is quite easy to do (all of the figures should be in real terms). 1. Choose a large interval of time (say 1900 to 2020), and at each point (say every month or year), decide how much you invest vs how much you donate, according to your strategy (and others). 2. Choose a model for how much money you have (for example, starting with a fixed amount, or say receiving a fixed amount every year, or receiving an amount depending on the return on investment in the previous year). 3. Sum up the total money donated over the course of that interval, and calculate how money you have in the end. Then, you can compare for different strategies the two values at the end. You can also sum the total donated and the money left, pretending to donate everything left at the end of the interval. Or you could adjust your strategies such that no money is left at the end.
Keynesian Altruism

That's a good point and I don't think I was particularly clear in my post. I will have a think about whether I can rephrase in a way that keeps it concise.

I'd like to separate my response into two issues: (1) liquidity (cash vs. Treasuries) and (2) risk tolerance (Treasuries vs. stocks). On liquidity, I think it's a good idea to keep a few months of expenditure in cash to ensure you can access it in an instant. Depending on your size, you may get some interest paid by the bank, but it's very unlikely to keep pace with inflation... (read more)

1PeterMcCluskey1y10 years worth of cash sounds pretty unusual, at least for an EA charity. But part of my point is that when stocks are low, the charity won't have enough of a cushion to do any investing, so it won't achieve the kind of returns that you'd expect from buying stocks at a no-worse-than-random time. E.g. I'd expect that a charity that tries to buy stocks would have bought around 2000 when the S&P was around 1400, sold some of that in 2003 when the S&P was around 1100 to make up for a shortfall in donations, bought again in 2007 at 1450, then sold again in 2009 at 1100. With patterns like that, it's easy to get negative returns. Individual investors often underperform markets for the same reason. They can avoid that by investing only what they're saving for retirement. However, charities generally shouldn't have anything equivalent to saving for retirement.
Keynesian Altruism

Yes, I think it would. My only slight hesitation is that it may not be immediately obvious what cycle it refers to. But thank you for the suggestion.

Estimating the Philanthropic Discount Rate

Really interesting article!

I don’t think the reduction in CPLSE is a good estimate of the change in opportunities for the following reasons: (1) CPLSE is very EA specific and EA is a very different movement now compared to 2012; (2) I’m sure AMF and Deworm the World have improved, but I don’t think they would have improved if their founders had sat on the sidelines waiting for research on malaria nets / deworming without actually getting out there and trying things.

My own instinct is that opportunities become more expensive over time. As world GDP increases, average prosperity increases and it becomes incrementally harder to help the ‘poorest’ person.

The case for investing to give later

A couple of points:

1) “We hence conservatively assume that a skilled investor can achieve 7% expected real returns” – I’m an investor (hopefully a skilled one), but I would certainly not think of 7% as conservative. Yes, historically real equity returns have been c.5%. That is indeed the correct prior to use when forecasting, but you then need to overlay other things about the future. Importantly, while the historically real risk-free was up around 2% for much of the period you quote (source: http://www.econ.yale.edu/~shiller/d... (read more)

RPTP Is a Strong Reason to Consider Giving Later

What is the frame of reference / underlying units for the percentages you are referring to? It makes a big difference if they are monetary vs. utility, USD vs. EUR, real vs. nominal, etc. When you look at the real life data historically and implied for the future, it is clear that time preference (i.e. real risk-free returns) is pretty neutral, i.e. sometimes you end up with less in real terms and sometimes you end up with more.

Long-term investment fund at Founders Pledge

These are excellent questions to ask. I’m more sceptical about the three main points than you.

In terms of “pure time preference”, the data shows that the real risk-free rate typically ranges from -1% to +2% and is below that range (i.e. less than -1%), so in the long-run it is minimal and in the short-term it is not there at all.

In terms of the “risk premium”, you can deduce (through a hypothetical portfolio of long S&P 500 forward, short US Treasury) that the risk premium is an argument for selling risk to those who ... (read more)

Giving now vs. later

Thanks for raising this very important and interesting issue. I think it is well worthy discussion and I'm glad you wrote such a thoughtful piece. I agree with your logic, but disagree with one of your assumptions. You say that "When I leave money in my bank account, it compounds slightly (1-2%, conservatively) faster than world economic growth". World GDP growth is typically around 3% p.a. in real terms, while the real interest rate is sometime as high as 1-2%, but sometimes as negative. Either way, it is very rate that the real interest rate is higher than world GDP growth.

New data suggests the ‘leaders’’ priorities represent the core of the community

I was attracted to EA several years ago and delighted to have finally found people who share my desire to make the world a better place. I, like many others I have met since, was struggling to know how to do that most effectively. For me, the goal of EA should always be to make the world a better place and the way to do this is not to create a cult where you have to be in the core to be valued.


EA needs a blend of people. It needs some people identifying effective activities. It needs some people doing those effective activities. It needs some people f... (read more)