6 ms·

I'm not a charitable person (I'm only concerned with caring for myself and my loved ones), but even then I never understand this kind of mentality. At $100k inc

I'm not a charitable person (I'm only concerned with caring for myself and my loved ones), but even then I never understand this kind of mentality. At $100k income (assuming no tax), 10% is $10,000. How much does that come out to over 10, 20, 30, even 50 years? Even if I were charitable I'd still rather save and invest everything, so that that money can grow and I can donate more later. Instead of a lump sum of 10k today, why not have an amount of wealth that can provide a continuous supply of funds from interest?

yboris 6y ago
Because the benefits individuals receive today compound. Consider how much of a health cost there is to being sick with malaria? Preventing a case of malaria is likely to have a much more positive effects (compounded into the far future) than doubling the donation in the future. Especially that malaria is a transmittable disease: lower the population of those carrying malaria, you have fewer malaria cases in the future. Prevention often costs far less than curing. Look at the positive effects of smallpox eradication!
- mvolfik 6y ago
  Yes, and this is even more relevant now in the pandemic. Many countries have agreed to ensure access to COVID vaccines for third world, yet they are still getting pretty much none, while Europe is already full of scandals with celebrities and rich people skipping priority lines and getting vaccinated
- silicon2401 6y ago
  > Because the benefits individuals receive today compound. The benefits I could give tomorrow after saving and investing my charity money would be greater than what I have today, plus the appreciation, and then the impact would be enormously more significant after that compounds, too. To use your example of malaria: "The Bill & Melinda Gates Foundation today announced three grants totaling $258.3 million for advanced development of a malaria vaccine" [1]. The BAMGF is able to benefit more people and benefit them more because of their wealth. If they had immediately given every dollar they'd made in their lives to the local homeless person/community, the impact would've been far less positive to humanity. 1: https://www.gatesfoundation.org/Media-Center/Press-Releases/2005/10/Gates-Foundation-Commits-2583-Million-for-Malaria-Research https://www.gatesfoundation.org/Media-Center/Press-Releases/...
  - yboris 6y ago
    You claim that the benefits you could give tomorrow "would be greater" but what's the argument? The argument is that tomorrow you would have "$258.3 million"? Let's assume you can double your money over the course of 7 years. AMF (Against Malaria Foundation) protects whole villages with anti-malaria bed nets, often resulting in a drop of around 50% of incidences of malaria over the course of a year or two. This also results in preventing some deaths. While you wait your 7 years to provide double the money to this charity, many people will needlessly die. And with higher prevalence of malaria, more people will be infected than you can prevent later. In your example you compare Bill Gates's donation to malaria eradication with giving money to the homeless. How is this the right comparison? And also, bringing Bill Gates into the discussion is irrelevant, unless you're in possession of MILLIONS of dollars you are planning to donate. Are you?
    - silicon2401 6y ago
      Your comments come off to me as bad faith interpretations of my comment due to an apparently hostile tone and emotional arguments (eg implying that waiting 7 years will let people needlessly die, totally ignoring my point that it is necessary to allow for helping more people later). Sorry, but I'm not interested in continuing this exchange.
      - yboris 6y ago
        Not hostile at all. Just pointing out that delaying helping now means many people will suffer now. And just like money wisely and luckily invested will compound to result in more money later, harms now compound to result in more harms later. A child sick with parasitic worms will have lower educational attainment and lower income later in life. Whatever effects you hope to bring about in the future through a larger donation better be magnificently larger - to offset all the negative effects of not helping now.
        silicon2401 6y ago
        I still disagree with your premise that the compounding effects of $1 today are more impactful over time than the compounding effects of $1000 or $10000 in 50 years, and that there will necessarily be compounding effects of helping today, let alone at the level of compounding interest. I'm not worried about a kid with worms today, because I'd rather help 100 or 1000 kids with worms in 50 years
sbarre 6y ago
Not OP but I'll answer for myself: The short answer here is because people need money/help now. People in crisis can't wait 10/20/30/50 years for you to donate. This is not a judgment, I respect your choices, but many of us donate out of a sense of urgency, and we understand the tradeoffs and the sacrifices involved. I'd rather give now and help now, even if that means I don't come out as far ahead in the end, than wait to see if I can give (and/or keep) more later. That said, what you propose certainly works too, and every effort to help is a good effort, but it has it's own drawbacks.
- yboris 6y ago
  The biggest drawback is that you may have the intention of giving money in the future, but you end up never doing it. Unless you put it into some guaranteed-for-charity vehicle like a Donor Advised Fund. Giving now, even if you are also putting some off to give later, is the better course of action. A good read: https://concepts.effectivealtruism.org/concepts/timing-of-philanthropy/ https://concepts.effectivealtruism.org/concepts/timing-of-ph... > giving now creates a habit of giving, and removes the temptation to spend savings which were originally intended to be donations.
  - sbarre 6y ago
    I completely agree with you.. Your point in the other thread about the compound benefits of giving now articulated much better what I was also trying to say :-)
  - silicon2401 6y ago
    > giving now creates a habit of giving, and removes the temptation to spend savings which were originally intended to be donations. I've donated money, it didn't become a habit > The biggest drawback is that you may have the intention of giving money in the future, but you end up never doing it. Unless you put it into some guaranteed-for-charity vehicle like a Donor Advised Fund. This is a personal point whereas I was coming at it from just a numerical point. > Unless you put it into some guaranteed-for-charity vehicle like a Donor Advised Fund. Not familiar with this, but if it's a way to invest money while forcing the money to only be used for charity, then yes I'd consider that the optimal choice for anyone who for some reason is charitable but wouldn't want to give charity down the road
thatguymike 6y ago
If that's the best use of your donation, then the charity you donate to can invest the money themselves and make use of the continuous supply of funds from interest. University endowments for example (even if they are only technically 'charities').
- silicon2401 6y ago
  This assumes you trust charities or any 3rd party to invest it wisely, let alone use the money exactly how you want it. I don't, which is why I would manage it myself until I felt like using or donating it
anchpop 6y ago
There are two things to consider: your discount factor and how quickly the utils you generate compound compared to your money. Let's say your discount factor is 3%/year. That means you have no preference between generating 100 utils today or 103 utils next year. If your money compounds more slowly than 3%, it doesn't make sense to save. Second, the utils you generate probably compound too. Contrary to what many would have you believe, the world is actually getting better at an exponential rate. Since 1981, the conditions of the world's poorest have been getting better and better. It's not totally clear, but it seems plausible that there's an exponential feedback loop involved here. Maybe an extremely poor person in a developing country has $100 of assets, and is able to increase his net worth this year by $5. With that $5, he can get a pen with some chickens or something, which will increase his net worth by $10. With that $10, he can get a radio that will allow him to hear the weather report and better tend his crops, letting him increase his net worth by $15 the next year. If you donated $30 to him, he could jump-start this process and immediately get all these gains and more, instead of having to toil for years for them. That's a somewhat farscial example, but I think it may resemble reality. Economic growth tends to be exponential, and if you artificially grow the economy by infusing it with cash, that extra boost may compound forever just like the money in your savings account would.

yboris 6y ago

Because the benefits individuals receive today compound. Consider how much of a health cost there is to being sick with malaria? Preventing a case of malaria is likely to have a much more positive effects (compounded into the far future) than doubling the donation in the future. Especially that malaria is a transmittable disease: lower the population of those carrying malaria, you have fewer malaria cases in the future. Prevention often costs far less than curing. Look at the positive effects of smallpox eradication!

mvolfik 6y ago
Yes, and this is even more relevant now in the pandemic. Many countries have agreed to ensure access to COVID vaccines for third world, yet they are still getting pretty much none, while Europe is already full of scandals with celebrities and rich people skipping priority lines and getting vaccinated
silicon2401 6y ago
> Because the benefits individuals receive today compound. The benefits I could give tomorrow after saving and investing my charity money would be greater than what I have today, plus the appreciation, and then the impact would be enormously more significant after that compounds, too. To use your example of malaria: "The Bill & Melinda Gates Foundation today announced three grants totaling $258.3 million for advanced development of a malaria vaccine" [1]. The BAMGF is able to benefit more people and benefit them more because of their wealth. If they had immediately given every dollar they'd made in their lives to the local homeless person/community, the impact would've been far less positive to humanity. 1: https://www.gatesfoundation.org/Media-Center/Press-Releases/2005/10/Gates-Foundation-Commits-2583-Million-for-Malaria-Research https://www.gatesfoundation.org/Media-Center/Press-Releases/...
- yboris 6y ago
  You claim that the benefits you could give tomorrow "would be greater" but what's the argument? The argument is that tomorrow you would have "$258.3 million"? Let's assume you can double your money over the course of 7 years. AMF (Against Malaria Foundation) protects whole villages with anti-malaria bed nets, often resulting in a drop of around 50% of incidences of malaria over the course of a year or two. This also results in preventing some deaths. While you wait your 7 years to provide double the money to this charity, many people will needlessly die. And with higher prevalence of malaria, more people will be infected than you can prevent later. In your example you compare Bill Gates's donation to malaria eradication with giving money to the homeless. How is this the right comparison? And also, bringing Bill Gates into the discussion is irrelevant, unless you're in possession of MILLIONS of dollars you are planning to donate. Are you?
  - silicon2401 6y ago
    Your comments come off to me as bad faith interpretations of my comment due to an apparently hostile tone and emotional arguments (eg implying that waiting 7 years will let people needlessly die, totally ignoring my point that it is necessary to allow for helping more people later). Sorry, but I'm not interested in continuing this exchange.
    - yboris 6y ago
      Not hostile at all. Just pointing out that delaying helping now means many people will suffer now. And just like money wisely and luckily invested will compound to result in more money later, harms now compound to result in more harms later. A child sick with parasitic worms will have lower educational attainment and lower income later in life. Whatever effects you hope to bring about in the future through a larger donation better be magnificently larger - to offset all the negative effects of not helping now.
      - silicon2401 6y ago
        I still disagree with your premise that the compounding effects of $1 today are more impactful over time than the compounding effects of $1000 or $10000 in 50 years, and that there will necessarily be compounding effects of helping today, let alone at the level of compounding interest. I'm not worried about a kid with worms today, because I'd rather help 100 or 1000 kids with worms in 50 years

sbarre 6y ago

Not OP but I'll answer for myself: The short answer here is because people need money/help now. People in crisis can't wait 10/20/30/50 years for you to donate. This is not a judgment, I respect your choices, but many of us donate out of a sense of urgency, and we understand the tradeoffs and the sacrifices involved. I'd rather give now and help now, even if that means I don't come out as far ahead in the end, than wait to see if I can give (and/or keep) more later. That said, what you propose certainly works too, and every effort to help is a good effort, but it has it's own drawbacks.

yboris 6y ago
The biggest drawback is that you may have the intention of giving money in the future, but you end up never doing it. Unless you put it into some guaranteed-for-charity vehicle like a Donor Advised Fund. Giving now, even if you are also putting some off to give later, is the better course of action. A good read: https://concepts.effectivealtruism.org/concepts/timing-of-philanthropy/ https://concepts.effectivealtruism.org/concepts/timing-of-ph... > giving now creates a habit of giving, and removes the temptation to spend savings which were originally intended to be donations.
- sbarre 6y ago
  I completely agree with you.. Your point in the other thread about the compound benefits of giving now articulated much better what I was also trying to say :-)
- silicon2401 6y ago
  > giving now creates a habit of giving, and removes the temptation to spend savings which were originally intended to be donations. I've donated money, it didn't become a habit > The biggest drawback is that you may have the intention of giving money in the future, but you end up never doing it. Unless you put it into some guaranteed-for-charity vehicle like a Donor Advised Fund. This is a personal point whereas I was coming at it from just a numerical point. > Unless you put it into some guaranteed-for-charity vehicle like a Donor Advised Fund. Not familiar with this, but if it's a way to invest money while forcing the money to only be used for charity, then yes I'd consider that the optimal choice for anyone who for some reason is charitable but wouldn't want to give charity down the road

thatguymike 6y ago

If that's the best use of your donation, then the charity you donate to can invest the money themselves and make use of the continuous supply of funds from interest. University endowments for example (even if they are only technically 'charities').

silicon2401 6y ago
This assumes you trust charities or any 3rd party to invest it wisely, let alone use the money exactly how you want it. I don't, which is why I would manage it myself until I felt like using or donating it

anchpop 6y ago

There are two things to consider: your discount factor and how quickly the utils you generate compound compared to your money. Let's say your discount factor is 3%/year. That means you have no preference between generating 100 utils today or 103 utils next year. If your money compounds more slowly than 3%, it doesn't make sense to save. Second, the utils you generate probably compound too. Contrary to what many would have you believe, the world is actually getting better at an exponential rate. Since 1981, the conditions of the world's poorest have been getting better and better. It's not totally clear, but it seems plausible that there's an exponential feedback loop involved here. Maybe an extremely poor person in a developing country has $100 of assets, and is able to increase his net worth this year by $5. With that $5, he can get a pen with some chickens or something, which will increase his net worth by $10. With that $10, he can get a radio that will allow him to hear the weather report and better tend his crops, letting him increase his net worth by $15 the next year. If you donated $30 to him, he could jump-start this process and immediately get all these gains and more, instead of having to toil for years for them. That's a somewhat farscial example, but I think it may resemble reality. Economic growth tends to be exponential, and if you artificially grow the economy by infusing it with cash, that extra boost may compound forever just like the money in your savings account would.