12 ms·

The Trader Who Donates Half His Pay

228 points by anonu 12y ago

invaliddata 12y ago
I know about one well known tech executive who donates about half his income every year, and increases that percentage by 1% each year (he's been doing this for a few decades, since before he "made it.") Granted, not everyone is in the position to do this, but the point is that there are people who have managed to keep a serious long term commitment to philanthropy, but whose efforts are (probably intentionally), not so well known.
_-__--- 12y ago
I think that this is great! Here's an idea, and one that may already be implemented (please tell me if you know that it is and who is doing it): One could set up a charitable nonprofit that uses HFT systems to maximize the growth of donated assets before sending them off to other charitable organizations. Investors would be able to influence where the money is donated at the end of the day. In a sense, use the "easy money" from wall street to back altruistic endeavors. The problem that I see with this is the easy chance for corruption and graft; however, given a clear altruistic management philosophy, a truly dedicated group of people could run a tight ship and make a difference for people in need. Maybe.
- meric 12y ago
  Those HFT traders profit from the clumsier pension funds and other similar funds. e.g. algorithm detecting a broker, on behalf of a fund, is buying some stock with one batch per hour, so front run them. They are profiting from teachers and the elderly. I suppose at the end of the day half of the resources lost to those two groups are given to the even more worse off, albeit giving charity administrators a cut.
  - jkestner 12y ago
    Not that this is exactly how the middle class has been decimated, but nice illustration.
  - cmdkeen 12y ago
    Fund managers also employ dealers who very much do not buy stock one batch an hour so as to allow HFTs to profit from them. They have a fiduciary duty to their clients to aim for best execution, so if they were being disadvantaged they would be crying out to regulators - who like to look after pension funds. The head of Vanguard is on the record saying that his firm benefits from HFTs actions on the market. Narrower margins are a good thing.
- maxerickson 12y ago
  HFT isn't easy money. Many foundations invest their money, with the idea that they will have a greater overall impact. I guess a prominent example is university endowments.
josefresco 12y ago
$200K in pretax income ... nice.
- fweespeech 12y ago
  Keep in mind, he does live in NY and works on Wall St so he likely needs $100k to live a decent middle class life tbh. ---- Since it doesn't want me to reply again [I'm submitting too fast] If you can support a family of 4 in NY with less than $100k while qualifying as middle class, I'm curious how you manage it. :) http://council.nyc.gov/html/action/acpdfs/middle_Class_squeeze.pdf http://council.nyc.gov/html/action/acpdfs/middle_Class_squee... Fyi: Real median household income for all working age residents adjusted for a family of four peaked in 2001 at slightly over $72,000, and for middle class households at just over $111,000. During the 2001-2008 cycle, however, median middle income actually fell despite the strong growth of the City’s economy, and has continued to fall during the recovery – for reasons that will be discussed further on – declining 7.8 percent in inflation-adjusted terms. For NYC, $100,000 is a very average middle class income. Cost of living by area does matter.
  - whatok 12y ago
    That and he's in a field that has volatile pay and employment so extra nest egg is essential. Not sure how he builds up savings (probably lives very frugal) but props to him for donating half his pay.
    - akgerber 12y ago
      Living on $75k or so after-tax in NYC as a young single man isn't 'very frugal'. A nice room in a roommate situation can be had for $1000/mo, a very nice one for $2000, which totals $12k-$24k per year. Likewise a modest reasonably-located 1bedroom/studio can be had for $2000/mo. After that, the only mandatory expenses are $1000 or so a year for transportation and reasonable expenses for food, though much of that cost is likely paid by his employer.
      - whatok 12y ago
personlurking 12y ago
Here's the view of the trader's professor (Peter Singer) on being ethical with one's money (in the first few minutes he gives his famous example of a child drowning). https://youtube.com/watch?v=dBvsZVlcXR4 https://youtube.com/watch?v=dBvsZVlcXR4 (7 min) This 14 min lecture goes through Singer's example, and it explores his view further. https://youtube.com/watch?v=Pyzv2UWzaos https://youtube.com/watch?v=Pyzv2UWzaos
- chii 12y ago
  thats an interesting video. Gave me a lot of food for thought.
jrlocke 12y ago
This may be an unpopular opinion, but I've always felt it selfish when people of means partake in 'aid trips' over sending money to an appropriate organization. If you care to help, leverage your abilities efficiently; make the money doing what you're best at, and let others administer the aid.
- vinay427 12y ago
  That's certainly a logical opinion, and I agree that efficiency is key. However, I think it's also important to keep in mind the personal value of traveling on aid trips, which allow for an improved understanding of the need that lies. Perhaps this encourages potential donors to increase the frequency and quantity of their contributions.
  - Someone1234 12y ago
    I'd liken it to the classic criticism: "charities spend too much money on advertising!" But how do charities get donations without advertising? How do they let people know why they need the money and encourage them to donate? At some point, yes, a charity can spend too much of its donations on advertising, but advertising in general is a necessary evil. Same with this. The charities might take in less overall if they "saved" money by scrapping these types of programs.
    - Symmetry 12y ago
      One can criticizing people for taking the trips isn't the same as criticizing charities for offering them.
      - Someone1234 12y ago
        I suppose that is fair. But since I don't donate 1/1000th of what these people do even with the trip, I don't really think my grandstanding on how they spend their own money would really be justified. I will say that I took a holiday last year, and technically that is money I could have used to donate. So in that sense I am just as bad as they are.
iamfbpt 12y ago
We all almost do through taxes. He goes further and donates 50% more from the remaining money.
- smeyer 12y ago
  He's probably taking the tax deductions for the donations, so it's not the same as donating an additional 50% "from the remaining money" (as some of it comes out of what would have been taxes). I didn't see it explicitly one way or the other in the article, though, so he could be donating 50% while still paying taxes on the full 100%.
- jtbigwoo 12y ago
  > We all almost do through taxes. He goes further and donates 50% more from the remaining money. This is an odd argument. Are you saying that paying taxes is some form of altruism? The story is about a guy who donates money with no tangible benefit to himself. We all get benefits and services from the government. It debatable whether the value we receive is equal to the amount we pay in taxes, but the value is certainly not zero.
  - driverdan 12y ago
    US entitlement spending is about 66% of the federal budget. Unless you're on disability, medicare, social security, or some other entitlement program that's money you're receiving no direct benefits from.
    - dragonwriter 12y ago
      I dunno, I think the government employees (federal and, because much of the federal entitlement spending is joint state/federal programs like Medicaid) and contractors paid to work directly in the administration of those programs (or, in the case of companies running Medicare Advantage plans, working in for-profit businesses directly subsidized by the entitlement spending) are receiving at least as direct a benefit from those programs as the program recipients are, and often, per person, a much larger benefit, as well.
cllns 12y ago
> Singer himself donates about one-third of his income to charity, he says, and I admire his commitment. Still, I wonder... where do we draw the line? Peter Singer himself wrote, in the New York Times Magazine, nearly a decade ago, an article titled "What Should a Billionaire Give – and What Should You?" [1]: http://www.nytimes.com/2006/12/17/magazine/17charity.t.html?pagewanted=all http://www.nytimes.com/2006/12/17/magazine/17charity.t.html?...
footpath 12y ago
There was a similar story with Jason Trigg, an MIT graduate who went to work for a hedge fund just so he could give money away, also influenced by Peter Singer. See these discussions: https://news.ycombinator.com/item?id=5800345 https://news.ycombinator.com/item?id=5800345 https://news.ycombinator.com/item?id=5819762 https://news.ycombinator.com/item?id=5819762 Here's the top comment from the second link: Quote from quanticle: If you choose a profession that doesn't arouse your everyday passion for the sake of serving instead some abstract faraway good, you might end up as a person who values the far over the near. You might become one of those people who loves humanity in general but not the particular humans immediately around. You might end up enlarging the faculties we use to perceive the far -- rationality -- and eclipsing the faculties we use to interact with those closest around -- affection, the capacity for vulnerability and dependence. Instead of seeing yourself as one person deeply embedded in a particular community, you may end up coolly looking across humanity as a detached god. Brooks sees this as a disdvantage, but I do not. Frankly, given the levels of irrational thought and behavior we see in the world today, we should be doing everything we can to increase the amount of rationality and far-oriented thinking in the world. I would posit that a world in which people were more like Jason Trigg would be a far better world, on every measurable metric, than the present that David Brooks endeavors to defend. I mean, Trigg, at least, has a goal and a plan to achieve it. The goal is the old utilitarian one of achieving the greatest good for the greatest number. The means is to earn lots of money and spend it on that goal. Third, and most important, I would worry about turning yourself into a means rather than an end. If you go to Wall Street mostly to make money for charity, you may turn yourself into a machine for the redistribution of wealth. You may turn yourself into a fiscal policy. And what's wrong with that? The problem with fiscal policy is not the goal of fiscal policy. It is the coercive means used to achieve it. There is no coercion here. No one is forcing Jason Trigg to give away his wealth. He is doing it of his own volition. Were he older and richer, he'd be lauded as another Carnegie, or another Gates. Making yourself is different than producing a product or an external outcome, requiring different logic and different means. I'd think you would be more likely to cultivate a deep soul if you put yourself in the middle of the things that engaged you most seriously. If your profoundest interest is dying children in Africa or Bangladesh, it's probably best to go to Africa or Bangladesh, not to Wall Street. That's not true at all. Sure, if you have skills that are needed in Africa or Bangladesh, it's best to go there. But not everyone has such skills. If we all pitched in like Jason Trigg and managed to get a cheap malaria vaccine crafted, say, 3 years from now, we'll have done far more good than if we'd all gone to Bangladesh or Africa volunteering to hand out bed nets. It comes down to the old question: are you worried about doing good or feeling good? If you're worried about doing good, you coldly analyze all the alternatives, and pick the one with the highest impact, even if it has zero visibility whatsoever. If you're worried about feeling good, you do what David Brooks advocates. You go down to Africa, Asia, or where-ever and get warm fuzzies by hoisting the white man's burden. Rationality is not a sin. Calculation is not a sin. Money is not inherently sinful. All of these things are means, and have the capability to do both great good or great harm, depending on the end to which they're applied. Jason Trigg understands this. David Brooks does not. And that's why I, personally, respect Jason Trigg a lot more than David Brooks.
acadien 12y ago
If only our government taxed people appropriately and had a system for foreign aid that was well studied and effective. Is whats proposed in this article as effective or better than the alternative? I have no idea but it certainly seems less organized.
- JacobLBryan 12y ago
  It probably does lose out on some coordination efficiency that a hypothetical world government could achieve, but in today's world governments have a mandate to care for their own citizens before others, which means that first world governments miss out on the incredibly cheap interventions in the developing world. For example, the NHS in Britain will spend as much as £30,000 to provide a QALY (Quality Adjusted Life Year), when a similar year of life in the developing world can be provided for £50 at a conservative estimate.
willmacaskill 12y ago
Matt is a friend of mine, and someone who got career advice from what ultimately became 80,000 Hours, a startup non-profit I cofounded. I'm really happy to see the positive response on here; we've advised a lot of people to 'earn to give' and some people... let's say they aren't that happy about the idea that working in trading can be an ethical career. Anyone, if anyone feels inspired by the story and thinks they might want to do something similar, I'm always happy to provide advice (you can get my contact details on my website). Not just through finance; there are a ton of software engineers and entrepreneurs in the effective altruism community, and it's really a place where everyone's trying to help each other be more successful - because we'll all do more good that way. If you think you might want to get involved, or find out more, there's a pretty active facebook group where you can introduce yourself. https://www.facebook.com/groups/effective.altruists/?ref=br_tf https://www.facebook.com/groups/effective.altruists/?ref=br_... Happy also to take any questions on here.
- jimbokun 12y ago
  "... let's say they aren't that happy about the idea that working in trading can be an ethical career." Well, it's at least worth having a discussion about. If you are in a career where you honestly think damage is being done by your activities, you need to weigh that against whatever good is being done with the money you earn and give away. What about the traders involved in the near-collapse of the global economy in 2007-2008? It would take a lot of very effective giving to make up for the damage caused.
  - krstck 12y ago
    From http://effective-altruism.com/ea/54/show_me_the_harm/ http://effective-altruism.com/ea/54/show_me_the_harm/: "Finance is often taken to be the legal high earning career that’s most harmful to society. The average Goldman Sachs employee earns around $500,000 per year. If someone joined Goldman and donated half of his earnings to Against Malaria Foundation, that would be about enough to save 100 lives per year (or more accurately, saving 4000 QALYs), plus likely have substantial positive flow-through effects. For Earning to Give at Goldman to be net harmful, the marginal employee would need to be causing the death of a hundred people each year. This would mean that Goldman Sachs employees are several orders of magnitude more deadly than American service people in Iraq. Goldman has 32,000 employees. An upper bound for the harm caused by the marginal employee is thus the total harm caused divided by 32,000. For the harm to outweigh the good, Goldman would therefore have to be killing at least 3.2 million young people each year, or doing something else that is similarly harmful. That would mean that Goldman Sachs would need to be responsible for around 5% of all deaths in the world. Bear in mind that Goldman Sachs only makes up 22% of American investment banking, and 3% of the American financial industry - if the rest of finance is similarly bad, then it would imply that finance is doing something as bad as causing all the deaths in the world."
susi22 12y ago
This article has a few links but REALLY is lacking this one: http://en.wikipedia.org/wiki/Giving_What_We_Can http://en.wikipedia.org/wiki/Giving_What_We_Can https://www.givingwhatwecan.org/ https://www.givingwhatwecan.org/ And interesting bunch of people where you pledge to donate X% of your pre-tax income to charity for life. The founder, Toby Ord capped his income to 18,000 British Pounds: http://en.wikipedia.org/wiki/Toby_Ord http://en.wikipedia.org/wiki/Toby_Ord
huac 12y ago
The money he earns has to come from somewhere - what benefits a hedge fund is not likely to benefit the 'disposable populations' [for lack of a better term] that one of the fund's traders is supporting. In other words, if your hedge fund makes money by betting against the 3rd World, then half of your salary is only going to go so far for karmic rebalancing.
- driverdan 12y ago
  > if your hedge fund makes money by betting against the 3rd World What makes you think that's how they make their money?
- halfcat 12y ago
  If he chose a lower paying, more noble job, would the hedge fund leave his position unfilled?
jtbigwoo 12y ago
I talked about this on HN a few years ago, but my friends and I planned to be this guy. In college we talked about all the money we'd make and how much we'd be able to donate. We all had a job offers for $32 - 42k/year. That was amazing! We were living on less than $1k/month in college. We had plans to give away 20%, 30%, or 50% of our income. We would barely even notice. Some of us even managed to do it for a few years. The world got to us, though. You start to notice that the coworkers that dress nicer and go to happy hour get promotions. One guy married a social worker and had four kids. One guy got tired of living in a studio apartment in New Jersey. One guy became a junior high science teacher. Twenty years later, I suspect that our average charitable contribution is down to around 5% of our income. It is really hard to be counter-cultural like Mr. Wage. Especially when your plan requires you to remain completely immersed in the culture. It feels like there's a constant friction to overcome--like every choice takes a bit more willpower than it should. I think this is part of the reason that truly counter-cultural people and movements tend to segregate themselves from the rest of the world. I don't mean to degrade Mr. Wage and his project. I hope this works out for him, but it's a very difficult road.
- willmacaskill 12y ago
  I think this is a really important concern. Btw, 5% is still quite a bit more than the average, so good work! We're attempting to overcome this worry through community and behavioural economics hacks. E.g. I take every opportunity that I can (like this one) to say publicly that I'm planning to give away the majority of what I earn, which makes it a helluva lot harder for me to back out. Similarly for Matt - it would be embarrassing for him to renege on his commitments when he's been so open about it. And it feels like a much smaller sacrifice (if it's even a sacrifice at all) when most of your friends are doing the same thing - and some, like Jeff and Julia in Boston (http://www.givinggladly.com/2013/06/whats-it-like-to-give-half.html http://www.givinggladly.com/2013/06/whats-it-like-to-give-ha...) are doing much more.
  - hkmurakami 12y ago
    Not only is 5% of one's income a rather high number, even the average amount that people give in the United States is far higher than the corresponding amount in other countries (ex: Japan). It may be the country's Christian leanings that contribute to this, but to be charitable is seen as a virtue and absolute good in this society. This is not necessarily the case in other societies.
deleted 12y ago
[deleted]
krstck 12y ago
From the article: > First, where do we draw the line? If we’re prepared to donate one-third of our incomes to maximize happiness, then why not two-thirds? Why not live in a tent in a park so as to be able to donate 99 percent and prevent even more cases of blindness? This is an area where the writings of Scott Alexander (Slate Star Codex) have been really helpful for me. He refers to this as "Infinite Debt" (http://slatestarcodex.com/2014/05/10/infinite-debt/ http://slatestarcodex.com/2014/05/10/infinite-debt/): "For years, I felt like I was probably ethically obligated to give all my income to charity, minus whatever I needed to survive. And the fact that I obviously wasn’t going to do that made me not give anything at all. Once someone told me that my obligation wasn’t infinite, but just some finite amount like ten percent per year, every year, I was thrilled to be able to comply. And of course there are people who make fun of this. “Oh, you really think you can just give an amount you find “convenient”, then feel like your conscience is clear and you can stop caring and be smug and self-satisfied?” The proper response to this person is to ask whether they give so much as ten percent. (“What? No, why should I?! I do my part by yelling at you!”)"
- tomjen3 12y ago
  The problem with that is that it only works if you believe that 10% makes sense. For me it doesn't - it is either 0% or whatever several 100% of my current income it would take to do my part (I don't see how not currently earning enough to repay would be enough to get me of the hook, certainly car payments are not payed in percentage of income). Thus, for me, the only answer that makes sense is that we have no obligation to save the world, but we are allowed to donate whatever we want. Besides who says all lives have equal value?
  - krstck 12y ago
    > Thus, for me, the only answer that makes sense is that we have no obligation to save the world, but we are allowed to donate whatever we want. That's the status quo. The whole reason we're having this conversation is because not enough people are donating X% in order to fix global poverty. So, what's your burden? What's my burden? 10% is a handy figure because it's small enough to be doable for most people, but large enough such that if everyone were donating 10%, we'd have enough money to basically fix global poverty forever. It's handy for us to agree to discharge our infinite debts to each other by agreeing upon some figure. 10% fits that nicely.
drcube 12y ago
This is the same Peter Singer who told parents not to send their kids to college and instead send their tuition money to Africa. But apparently, if you send your kid to college anyway, he could make enough to send half his salary to Africa every year, far outweighing his parents' initial college fund. So who is right? I like that Singer holds this guy up as an example, for doing the exact opposite of what Singer actually claimed was morally right.
- driverdan 12y ago
  Source?
bshimmin 12y ago
"Mr. Wage" is a lovely example of an aptronym: http://en.wikipedia.org/wiki/Aptronym http://en.wikipedia.org/wiki/Aptronym
- rry 12y ago
  Not to be a downer, but it's pronounced "wah-GEE", with a hard G. source: used to work a few desks down from Matt.
  - nocman 12y ago
    Wow, now there's a guy guaranteed to have his name mispronounced 99% of the time (well, at least by people who have never heard it spoken). [ edited for typo ]
    - willmacaskill 12y ago
      I know; his brother actually just gave up and started introducing himself as "Wage" (pronounced as you'd think) rather than "WAG-ee"
ernestipark 12y ago
For those interested, one way to build this charitable muscle and lifestyle is to start a charitable trust (at least in the US). It's not just for the ultra wealthy. You can start any old investment account and commit to funding it regularly say $20/month or 1% of your salary to start. Then when you hit $5k or more you can transfer those funds to a trust you create with say Fidelity or Vanguard ($25k minimum). You can then disburse these funds from the trust to the charitable org of your choice. The nice thing about this option is you can save now without having to decide where to give. You can take time to research and make an educated informed decision on where to give. You also get the dual tax benefit of not getting taxed on these capital gains and the deduction of a donation if you itemize. It's very cool to see people giving critical thought on how they give. But sometimes it can be intimidating to start. Just starting with anything is better than nothing and you can build from there. You don't have to give 50% like this guy. Building it into your lifestyle and budgeting is a slow and gradual process.
- xur17 12y ago
  I'm interested in this approach - is there any charge to create the trust? Also, I wish the minimum for Vanguard was lower - I already have an investment account with them, and this seems like a great way to get started.
  - ernestipark 12y ago
    Shouldn't be - I think it's just the same as most investment accounts in that there is a small management fee that takes a percentage cut. In this way Vanguard is the best as it has the lowest rates I know of for the casual investor, but the minimum is certainly high.
  - rhc2104 12y ago
    The fee is a percentage of your assets: https://www.vanguardcharitable.org/individuals/fees_and_expenses/ https://www.vanguardcharitable.org/individuals/fees_and_expe... It starts at .6% per year, and decreases when the account size is huge.
- djb_hackernews 12y ago
techtivist 12y ago
I am not sure if this is really "effective altruism". When I decided to leave a high paying job to start an education startup in order to pursue my passion to make a change through education, I got similar advice. I was told it would be more "effective" to keep my job and donate the money to education related charities instead. But I realized that as an software engineer, my skills could prove much more impactful, and directly so than the relatively meagre money I could donate. As they say money is cheap. I felt, and I still feel I could amplify my impact by using my skills rather than just throwing money at the problem. Second, I wanted to be more aware and involved in the issues I wanted to contribute to, which I couldn't do unless I dove in. There are a lot of good organization out there that are making great impact, but there are equal number of "bad" ones that are perhaps having a negative impact or are not aligned to ones values. GiveWell and CharityNavigator can only go so far.
- jarrettc 12y ago
  The relative impact of your money vs your time depends in part on your income, you skill-set, and the causes you would choose. A person with a high income but few relevant skills would probably have the greatest impact by donating money. For example, a trader interested in preventing disease might not have any skills in developing or delivering vaccines. But that trader might have a substantial amount of money to donate to organizations that do have those skills. On the other hand, a software engineer with a modest income might find a very effective nonprofit that could do much more if only it had access to software development talent. For that engineer, donating time might achieve much more than donating money.
- ceras 12y ago
  I think both you and the article are in-line with effective altruism (the movement). The crux of EA is objectively and dispassionately deciding what causes do the most good with your scarce resources (time & money) and deciding how to best support them. Reasonable people will disagree on whether working in the industry or donating profits from a higher-paying industry will work better for you. Education isn't a popular EA cause but whether it is or isn't optimal depends on the change you think your start-up will have contrasted against what impact you could have elsewhere. Check out https://80000hours.org https://80000hours.org for a way more in-depth exploration of the different career-related EA strategies.
buro9 12y ago
https://en.wikipedia.org/wiki/Tithe https://en.wikipedia.org/wiki/Tithe 10% of income is doable. I treat it like a form of tax in which I have a say. It's going to be taken (that's the way in which I think of it as a tax), but now I get to say who receives it. Last year I favoured Medicine San Frontiers due to the Ebola outbreak, but in general I favour Liberty, Open Rights Group and small charities that provide computers to Africa, or bicycles for the disabled in the UK (Wheels for Wellbeing). 10% really isn't too much, and so long as you do it early you'll likely never notice it. Then again... perhaps this is why I don't have a deposit for a mortgage. Or perhaps that was poor budgeting for the bit of salary I did take home and keep.
a3voices 12y ago
Should you also donate money to save hypothetical aliens in a far away galaxy, if we find out they exist? What about a fund to help people relocate from flooded cities from global warming 200 years in the future? What about donating to keep A.I. simulations from being shut off? Why donate to help people and not animals or bacteria? What about the fact that the universe is going to die from entropy, and all people die anyways from old age? What's the point? Note: I try to not donate any of my money to any cause ever
- hmate9 12y ago
  Because some people are not as lucky. Some people don't have the basics such as water which we take for granted and it is all because of LUCK. What's the point of life if not to help each other survive and enjoy life? Sure, you need to keep yourself and your family comfortable but to actively distance yourself away from ANY kind of donation is just sub-human imo.
- JacobLBryan 12y ago
  If you think one of those is the most efficient way to avert suffering then sure, why not?
crimsonalucard 12y ago
I'm ashamed to say I donate $0. It's the right thing to do, it's altruistic and I respect the people that do it; but I can't bring myself to care more about the rest of the world then I care about myself/my family. Am i the norm or the minority?
- SomeCallMeTim 12y ago
  You and your family live in the rest of the world. It's not just altruistic, it's also rational for your own self interests. It's not mutually exclusive: That's a false dichotomy. If you can't care about your community enough to donate something, then I think your values may need reexamining. Even if that something is donation of old clothes and used items instead of throwing everything away. And finally, it's not about how many people donate and how many don't. It's the right thing to do, and asking if you're "the norm" is just looking for a justification. Do the right thing. Don't just be narrowly selfish.
  - crimsonalucard 12y ago
    Logic doesn't apply in this case. If I donate money I am acting against logic. My self interest benefits more if I use the money for myself rather then giving it away and getting the benefits in a form that is heavily diluted. It is the aggregate donations of people that can, in the end mutually benefit my self interest. However my individual donation is just a drop in the bucket; I stand to benefit the most by not donating and letting others donate. Thus, the logical move is to not donate. It is actually counter intuitively detrimental to my self interest if everyone acted this way. Garrett Hardin described the paradox in his famous paper: http://en.wikipedia.org/wiki/Tragedy_of_the_commons http://en.wikipedia.org/wiki/Tragedy_of_the_commons This does not mean I think it's ok not to donate. A large part of our lives as humans are not dictated by logic. What I meant in the original post is that from an emotional standpoint I just don't feel a heavy burden that I need to donate. $20000 that could be a donation I'd rather spend on a worthless luxury (i.e. new car) for me... and that's not logic talking either, it's just my gut, emotional desire.
    - 12y ago
ceras 12y ago
How many here are pursuing a similar goal? Donating 5%, 10%, even 50% of their pre-tax income? I love the effective altruist movement - it's pretty much what I spend most of my time thinking and reading about - but this is a very touchy subject to discuss casually so I've never met people in real life (or in my industry) who are also into this. My own goal is to give about 50% of lifetime earnings, though with the flexibility to scale that back to a floor of 20% in the event my income drops a lot (I'm at the mercy of tech salaries, and just not willing to jump to a career that destroys my work-life balance). The tech industry is known for having a disproportionate amount of effective altruists, given how pragmatic and numerical the conclusion to donate to the most effective charities is.
- willmacaskill 12y ago
  That's great! (I'm guessing I probably know you, but can't tell who you are). I'm hoping to donate >50% too; I've been donating about 10% but I've been on a low salary; next year I'll be able to do 50% I think.
  - knite 12y ago
    Not sure if you'll see this, but this thread inspired me to send an email to 80K, which I've known about for a while. I'm planning to become a 50+% donator in the next couple of years.
- JacobLBryan 12y ago
  I'm doing 1/3rd of gross, though it's not really very much since I'm still a student and I only work summer internships. Once I graduate I'm planning on setting a cap based on the cost of living wherever I end up, and donating everything above that.
fobcat 12y ago
"What is the moral code of altruism? The basic principle of altruism is that man has no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice is his highest moral duty, virtue and value. Do not confuse altruism with kindness, good will or respect for the rights of others. These are not primaries, but consequences, which, in fact, altruism makes impossible. The irreducible primary of altruism, the basic absolute, is self-sacrifice—which means; self-immolation, self-abnegation, self-denial, self-destruction—which means: the self as a standard of evil, the selfless as a standard of the good. Do not hide behind such superficialities as whether you should or should not give a dime to a beggar. That is not the issue. The issue is whether you do or do not have the right to exist without giving him that dime. The issue is whether you must keep buying your life, dime by dime, from any beggar who might choose to approach you. The issue is whether the need of others is the first mortgage on your life and the moral purpose of your existence. The issue is whether man is to be regarded as a sacrificial animal. Any man of self-esteem will answer: “No.” Altruism says: “Yes.”" -Ayn Rand
- swombat 12y ago
  Gotta love Ayn Rand and her incredible ability to make bare, simplified, polarising dichotomies out of rich, complex topics, then paint the extreme opposite to her as evil, without examining whether her own chosen extreme may be equally evil. I mean, she really has taken the "build a straw man and set it on fire" approach to an art form (quite literally... and I'd add that the Fountainhead is a great book, if thoroughly misguided from a philosophical point of view). Altruism as she defines it is obviously crap. What she fails to do is to clarify the extreme egocentrism that she proposes in an equally critical way. Here's an amusing attempt to do so using her own format: > "What is the moral code of egocentrism? The basic principle of egocentrism is that other people have no right to exist other than for your sake, that service to you is the only justification of their existence, and that their sacrifice for your good is their highest moral duty, virtue and value. > Do not confuse egocentrism with self-respect, self-awareness or respect for your rights. These are not primaries, but consequences, which, in fact, egocentrism makes impossible. The irreducible primary of egocentrism, the basic absolute, is the total unimportance of the other—which means; not caring one whit about others, using them for your own means, sacrificing their feelings and even their lives if necessary—which means: the other as a standard of evil, the self as a standard of the good. > Do not hide behind such superficialities as whether you should or should not use people. That is not the issue. The issue is whether those people have the right to exist without being of use to you. The issue is whether you are really compelled to notionally support the existence, day by day, of people who are of no apparent use to you. The issue is whether your needs are the first mortgage on their life and the moral purpose of their existence. The issue is whether other people are to be regarded as sacrificial animals. Any man worth calling that will answer: “No.” Egocentrism says: “Yes.”" As usual, the better place to sit is somewhere in the middle. No, you do not exist just to serve others, and total self-abnegation and sacrifice is certainly not a productive way to live. Neither, however, is total self-adoration and worship of your ego. Both are mistaken paths. The far better path is to realise that you need a balance of both respect for your own self, and connection to others, to live a good, fulfilled life. For your own sake, fobcat, and not for mine, I hope you can read and understand the above...
jayhuang 12y ago
> Sure enough, he says that in 2013 he donated more than $100,000, roughly half his pretax income. This is pretty impressive to me. Many will say "well, if half of it is 100k, he still has at least 100k", except this is pretax, meaning he keeps less than 100k; besides, before saying it's not a big deal, how much are you contributing? I personally donate 40% of my post tax income anonymously to various initiatives/organizations, which means even less pretax, but that's what I can afford without jeopardizing my family's well being. It doesn't have to be monetary, but a little bit of help goes a long way. I'm glad there are people who do whatever they can to help out with the less fortunate.
collyw 12y ago
There was a story of a university researcher doing this a few years ago, on a for more modest wage. http://www.bbc.com/news/magazine-11950843 http://www.bbc.com/news/magazine-11950843 On the one hand I think its far more generous, though as pointed out, the trader will end up donating a lot more cash. Either way, good on them. I have too much uncertainly about my future to make such a commitment at this moment (and to be fair I really think that politics should arrange a fairer society so that individuals don't need to do such things). It's in the back of my head that if I get rich I could do so much more for society.
joshstrange 12y ago
Right now I don't give a large amount to charity past Kiva loans (I try to average $25 every month or two) and a handful of causes online (sub $500/yr) on an as-needed basis. I'm trying to be as aggressive as possible paying off my debt (my debt payoff is a little over 30% of what I take home monthly and I plan on using the "snowball method" so that number will not change as I pay off debt to accelerate the payoff) because it doesn't seem smart to give away money when that puts me on the hook for more money (interest). If there is an error in this logic I would greatly appreciate it being pointed out to me. I'd be interested in increasing my charitable contributions but I'm not sure where would be best to send more money to. I am personally a fan of direct charity instead of going through an organization as I feel it reduces overhead. I like Kiva loans because once I get paid back I just re-loan the money so that slowly I am increasing the amount I loan monthly while keeping my monthly contribution the exact same (or slowly increasing it, I want to get to $50/mo within a few months). I also like Kiva because I know exactly how much is going to Kiva vs the person asking for money (something that is hidden or hard to find out for most charities IMHO). My approach is not based on anything specific it's more of just what has happened naturally since I started working full time.
dennisgorelik 12y ago
Could anyone explain to me how donating money to charities is better than giving money to your family, service providers and businesses that give you food and goods?

228 points by anonu 12y ago

I know about one well known tech executive who donates about half his income every year, and increases that percentage by 1% each year (he's been doing this for a few decades, since before he "made it.") Granted, not everyone is in the position to do this, but the point is that there are people who have managed to keep a serious long term commitment to philanthropy, but whose efforts are (probably intentionally), not so well known.

_-__--- 12y ago

I think that this is great! Here's an idea, and one that may already be implemented (please tell me if you know that it is and who is doing it): One could set up a charitable nonprofit that uses HFT systems to maximize the growth of donated assets before sending them off to other charitable organizations. Investors would be able to influence where the money is donated at the end of the day. In a sense, use the "easy money" from wall street to back altruistic endeavors. The problem that I see with this is the easy chance for corruption and graft; however, given a clear altruistic management philosophy, a truly dedicated group of people could run a tight ship and make a difference for people in need. Maybe.

meric 12y ago
Those HFT traders profit from the clumsier pension funds and other similar funds. e.g. algorithm detecting a broker, on behalf of a fund, is buying some stock with one batch per hour, so front run them. They are profiting from teachers and the elderly. I suppose at the end of the day half of the resources lost to those two groups are given to the even more worse off, albeit giving charity administrators a cut.
- jkestner 12y ago
  Not that this is exactly how the middle class has been decimated, but nice illustration.
- cmdkeen 12y ago
  Fund managers also employ dealers who very much do not buy stock one batch an hour so as to allow HFTs to profit from them. They have a fiduciary duty to their clients to aim for best execution, so if they were being disadvantaged they would be crying out to regulators - who like to look after pension funds. The head of Vanguard is on the record saying that his firm benefits from HFTs actions on the market. Narrower margins are a good thing.
maxerickson 12y ago
HFT isn't easy money. Many foundations invest their money, with the idea that they will have a greater overall impact. I guess a prominent example is university endowments.

josefresco 12y ago

$200K in pretax income ... nice.

fweespeech 12y ago
Keep in mind, he does live in NY and works on Wall St so he likely needs $100k to live a decent middle class life tbh. ---- Since it doesn't want me to reply again [I'm submitting too fast] If you can support a family of 4 in NY with less than $100k while qualifying as middle class, I'm curious how you manage it. :) http://council.nyc.gov/html/action/acpdfs/middle_Class_squeeze.pdf http://council.nyc.gov/html/action/acpdfs/middle_Class_squee... Fyi: Real median household income for all working age residents adjusted for a family of four peaked in 2001 at slightly over $72,000, and for middle class households at just over $111,000. During the 2001-2008 cycle, however, median middle income actually fell despite the strong growth of the City’s economy, and has continued to fall during the recovery – for reasons that will be discussed further on – declining 7.8 percent in inflation-adjusted terms. For NYC, $100,000 is a very average middle class income. Cost of living by area does matter.
- whatok 12y ago
  That and he's in a field that has volatile pay and employment so extra nest egg is essential. Not sure how he builds up savings (probably lives very frugal) but props to him for donating half his pay.
  - akgerber 12y ago
    Living on $75k or so after-tax in NYC as a young single man isn't 'very frugal'. A nice room in a roommate situation can be had for $1000/mo, a very nice one for $2000, which totals $12k-$24k per year. Likewise a modest reasonably-located 1bedroom/studio can be had for $2000/mo. After that, the only mandatory expenses are $1000 or so a year for transportation and reasonable expenses for food, though much of that cost is likely paid by his employer.
    - whatok 12y ago

personlurking 12y ago

Here's the view of the trader's professor (Peter Singer) on being ethical with one's money (in the first few minutes he gives his famous example of a child drowning). https://youtube.com/watch?v=dBvsZVlcXR4 https://youtube.com/watch?v=dBvsZVlcXR4 (7 min) This 14 min lecture goes through Singer's example, and it explores his view further. https://youtube.com/watch?v=Pyzv2UWzaos https://youtube.com/watch?v=Pyzv2UWzaos

chii 12y ago
thats an interesting video. Gave me a lot of food for thought.

jrlocke 12y ago

This may be an unpopular opinion, but I've always felt it selfish when people of means partake in 'aid trips' over sending money to an appropriate organization. If you care to help, leverage your abilities efficiently; make the money doing what you're best at, and let others administer the aid.

vinay427 12y ago
That's certainly a logical opinion, and I agree that efficiency is key. However, I think it's also important to keep in mind the personal value of traveling on aid trips, which allow for an improved understanding of the need that lies. Perhaps this encourages potential donors to increase the frequency and quantity of their contributions.
- Someone1234 12y ago
  I'd liken it to the classic criticism: "charities spend too much money on advertising!" But how do charities get donations without advertising? How do they let people know why they need the money and encourage them to donate? At some point, yes, a charity can spend too much of its donations on advertising, but advertising in general is a necessary evil. Same with this. The charities might take in less overall if they "saved" money by scrapping these types of programs.
  - Symmetry 12y ago
    One can criticizing people for taking the trips isn't the same as criticizing charities for offering them.
    - Someone1234 12y ago
      I suppose that is fair. But since I don't donate 1/1000th of what these people do even with the trip, I don't really think my grandstanding on how they spend their own money would really be justified. I will say that I took a holiday last year, and technically that is money I could have used to donate. So in that sense I am just as bad as they are.

iamfbpt 12y ago

We all almost do through taxes. He goes further and donates 50% more from the remaining money.

smeyer 12y ago
He's probably taking the tax deductions for the donations, so it's not the same as donating an additional 50% "from the remaining money" (as some of it comes out of what would have been taxes). I didn't see it explicitly one way or the other in the article, though, so he could be donating 50% while still paying taxes on the full 100%.
jtbigwoo 12y ago
> We all almost do through taxes. He goes further and donates 50% more from the remaining money. This is an odd argument. Are you saying that paying taxes is some form of altruism? The story is about a guy who donates money with no tangible benefit to himself. We all get benefits and services from the government. It debatable whether the value we receive is equal to the amount we pay in taxes, but the value is certainly not zero.
- driverdan 12y ago
  US entitlement spending is about 66% of the federal budget. Unless you're on disability, medicare, social security, or some other entitlement program that's money you're receiving no direct benefits from.
  - dragonwriter 12y ago
    I dunno, I think the government employees (federal and, because much of the federal entitlement spending is joint state/federal programs like Medicaid) and contractors paid to work directly in the administration of those programs (or, in the case of companies running Medicare Advantage plans, working in for-profit businesses directly subsidized by the entitlement spending) are receiving at least as direct a benefit from those programs as the program recipients are, and often, per person, a much larger benefit, as well.

cllns 12y ago

> Singer himself donates about one-third of his income to charity, he says, and I admire his commitment. Still, I wonder... where do we draw the line? Peter Singer himself wrote, in the New York Times Magazine, nearly a decade ago, an article titled "What Should a Billionaire Give – and What Should You?" [1]: http://www.nytimes.com/2006/12/17/magazine/17charity.t.html?pagewanted=all http://www.nytimes.com/2006/12/17/magazine/17charity.t.html?...

footpath 12y ago

There was a similar story with Jason Trigg, an MIT graduate who went to work for a hedge fund just so he could give money away, also influenced by Peter Singer. See these discussions: https://news.ycombinator.com/item?id=5800345 https://news.ycombinator.com/item?id=5800345 https://news.ycombinator.com/item?id=5819762 https://news.ycombinator.com/item?id=5819762 Here's the top comment from the second link: Quote from quanticle: If you choose a profession that doesn't arouse your everyday passion for the sake of serving instead some abstract faraway good, you might end up as a person who values the far over the near. You might become one of those people who loves humanity in general but not the particular humans immediately around. You might end up enlarging the faculties we use to perceive the far -- rationality -- and eclipsing the faculties we use to interact with those closest around -- affection, the capacity for vulnerability and dependence. Instead of seeing yourself as one person deeply embedded in a particular community, you may end up coolly looking across humanity as a detached god. Brooks sees this as a disdvantage, but I do not. Frankly, given the levels of irrational thought and behavior we see in the world today, we should be doing everything we can to increase the amount of rationality and far-oriented thinking in the world. I would posit that a world in which people were more like Jason Trigg would be a far better world, on every measurable metric, than the present that David Brooks endeavors to defend. I mean, Trigg, at least, has a goal and a plan to achieve it. The goal is the old utilitarian one of achieving the greatest good for the greatest number. The means is to earn lots of money and spend it on that goal. Third, and most important, I would worry about turning yourself into a means rather than an end. If you go to Wall Street mostly to make money for charity, you may turn yourself into a machine for the redistribution of wealth. You may turn yourself into a fiscal policy. And what's wrong with that? The problem with fiscal policy is not the goal of fiscal policy. It is the coercive means used to achieve it. There is no coercion here. No one is forcing Jason Trigg to give away his wealth. He is doing it of his own volition. Were he older and richer, he'd be lauded as another Carnegie, or another Gates. Making yourself is different than producing a product or an external outcome, requiring different logic and different means. I'd think you would be more likely to cultivate a deep soul if you put yourself in the middle of the things that engaged you most seriously. If your profoundest interest is dying children in Africa or Bangladesh, it's probably best to go to Africa or Bangladesh, not to Wall Street. That's not true at all. Sure, if you have skills that are needed in Africa or Bangladesh, it's best to go there. But not everyone has such skills. If we all pitched in like Jason Trigg and managed to get a cheap malaria vaccine crafted, say, 3 years from now, we'll have done far more good than if we'd all gone to Bangladesh or Africa volunteering to hand out bed nets. It comes down to the old question: are you worried about doing good or feeling good? If you're worried about doing good, you coldly analyze all the alternatives, and pick the one with the highest impact, even if it has zero visibility whatsoever. If you're worried about feeling good, you do what David Brooks advocates. You go down to Africa, Asia, or where-ever and get warm fuzzies by hoisting the white man's burden. Rationality is not a sin. Calculation is not a sin. Money is not inherently sinful. All of these things are means, and have the capability to do both great good or great harm, depending on the end to which they're applied. Jason Trigg understands this. David Brooks does not. And that's why I, personally, respect Jason Trigg a lot more than David Brooks.

acadien 12y ago

If only our government taxed people appropriately and had a system for foreign aid that was well studied and effective. Is whats proposed in this article as effective or better than the alternative? I have no idea but it certainly seems less organized.

JacobLBryan 12y ago
It probably does lose out on some coordination efficiency that a hypothetical world government could achieve, but in today's world governments have a mandate to care for their own citizens before others, which means that first world governments miss out on the incredibly cheap interventions in the developing world. For example, the NHS in Britain will spend as much as £30,000 to provide a QALY (Quality Adjusted Life Year), when a similar year of life in the developing world can be provided for £50 at a conservative estimate.

willmacaskill 12y ago

Matt is a friend of mine, and someone who got career advice from what ultimately became 80,000 Hours, a startup non-profit I cofounded. I'm really happy to see the positive response on here; we've advised a lot of people to 'earn to give' and some people... let's say they aren't that happy about the idea that working in trading can be an ethical career. Anyone, if anyone feels inspired by the story and thinks they might want to do something similar, I'm always happy to provide advice (you can get my contact details on my website). Not just through finance; there are a ton of software engineers and entrepreneurs in the effective altruism community, and it's really a place where everyone's trying to help each other be more successful - because we'll all do more good that way. If you think you might want to get involved, or find out more, there's a pretty active facebook group where you can introduce yourself. https://www.facebook.com/groups/effective.altruists/?ref=br_tf https://www.facebook.com/groups/effective.altruists/?ref=br_... Happy also to take any questions on here.

jimbokun 12y ago
"... let's say they aren't that happy about the idea that working in trading can be an ethical career." Well, it's at least worth having a discussion about. If you are in a career where you honestly think damage is being done by your activities, you need to weigh that against whatever good is being done with the money you earn and give away. What about the traders involved in the near-collapse of the global economy in 2007-2008? It would take a lot of very effective giving to make up for the damage caused.
- krstck 12y ago
  From http://effective-altruism.com/ea/54/show_me_the_harm/ http://effective-altruism.com/ea/54/show_me_the_harm/: "Finance is often taken to be the legal high earning career that’s most harmful to society. The average Goldman Sachs employee earns around $500,000 per year. If someone joined Goldman and donated half of his earnings to Against Malaria Foundation, that would be about enough to save 100 lives per year (or more accurately, saving 4000 QALYs), plus likely have substantial positive flow-through effects. For Earning to Give at Goldman to be net harmful, the marginal employee would need to be causing the death of a hundred people each year. This would mean that Goldman Sachs employees are several orders of magnitude more deadly than American service people in Iraq. Goldman has 32,000 employees. An upper bound for the harm caused by the marginal employee is thus the total harm caused divided by 32,000. For the harm to outweigh the good, Goldman would therefore have to be killing at least 3.2 million young people each year, or doing something else that is similarly harmful. That would mean that Goldman Sachs would need to be responsible for around 5% of all deaths in the world. Bear in mind that Goldman Sachs only makes up 22% of American investment banking, and 3% of the American financial industry - if the rest of finance is similarly bad, then it would imply that finance is doing something as bad as causing all the deaths in the world."

susi22 12y ago

This article has a few links but REALLY is lacking this one: http://en.wikipedia.org/wiki/Giving_What_We_Can http://en.wikipedia.org/wiki/Giving_What_We_Can https://www.givingwhatwecan.org/ https://www.givingwhatwecan.org/ And interesting bunch of people where you pledge to donate X% of your pre-tax income to charity for life. The founder, Toby Ord capped his income to 18,000 British Pounds: http://en.wikipedia.org/wiki/Toby_Ord http://en.wikipedia.org/wiki/Toby_Ord

huac 12y ago

The money he earns has to come from somewhere - what benefits a hedge fund is not likely to benefit the 'disposable populations' [for lack of a better term] that one of the fund's traders is supporting. In other words, if your hedge fund makes money by betting against the 3rd World, then half of your salary is only going to go so far for karmic rebalancing.

driverdan 12y ago
> if your hedge fund makes money by betting against the 3rd World What makes you think that's how they make their money?
halfcat 12y ago
If he chose a lower paying, more noble job, would the hedge fund leave his position unfilled?

jtbigwoo 12y ago

I talked about this on HN a few years ago, but my friends and I planned to be this guy. In college we talked about all the money we'd make and how much we'd be able to donate. We all had a job offers for $32 - 42k/year. That was amazing! We were living on less than $1k/month in college. We had plans to give away 20%, 30%, or 50% of our income. We would barely even notice. Some of us even managed to do it for a few years. The world got to us, though. You start to notice that the coworkers that dress nicer and go to happy hour get promotions. One guy married a social worker and had four kids. One guy got tired of living in a studio apartment in New Jersey. One guy became a junior high science teacher. Twenty years later, I suspect that our average charitable contribution is down to around 5% of our income. It is really hard to be counter-cultural like Mr. Wage. Especially when your plan requires you to remain completely immersed in the culture. It feels like there's a constant friction to overcome--like every choice takes a bit more willpower than it should. I think this is part of the reason that truly counter-cultural people and movements tend to segregate themselves from the rest of the world. I don't mean to degrade Mr. Wage and his project. I hope this works out for him, but it's a very difficult road.

willmacaskill 12y ago
I think this is a really important concern. Btw, 5% is still quite a bit more than the average, so good work! We're attempting to overcome this worry through community and behavioural economics hacks. E.g. I take every opportunity that I can (like this one) to say publicly that I'm planning to give away the majority of what I earn, which makes it a helluva lot harder for me to back out. Similarly for Matt - it would be embarrassing for him to renege on his commitments when he's been so open about it. And it feels like a much smaller sacrifice (if it's even a sacrifice at all) when most of your friends are doing the same thing - and some, like Jeff and Julia in Boston (http://www.givinggladly.com/2013/06/whats-it-like-to-give-half.html http://www.givinggladly.com/2013/06/whats-it-like-to-give-ha...) are doing much more.
- hkmurakami 12y ago
  Not only is 5% of one's income a rather high number, even the average amount that people give in the United States is far higher than the corresponding amount in other countries (ex: Japan). It may be the country's Christian leanings that contribute to this, but to be charitable is seen as a virtue and absolute good in this society. This is not necessarily the case in other societies.

deleted 12y ago

[deleted]

krstck 12y ago

From the article: > First, where do we draw the line? If we’re prepared to donate one-third of our incomes to maximize happiness, then why not two-thirds? Why not live in a tent in a park so as to be able to donate 99 percent and prevent even more cases of blindness? This is an area where the writings of Scott Alexander (Slate Star Codex) have been really helpful for me. He refers to this as "Infinite Debt" (http://slatestarcodex.com/2014/05/10/infinite-debt/ http://slatestarcodex.com/2014/05/10/infinite-debt/): "For years, I felt like I was probably ethically obligated to give all my income to charity, minus whatever I needed to survive. And the fact that I obviously wasn’t going to do that made me not give anything at all. Once someone told me that my obligation wasn’t infinite, but just some finite amount like ten percent per year, every year, I was thrilled to be able to comply. And of course there are people who make fun of this. “Oh, you really think you can just give an amount you find “convenient”, then feel like your conscience is clear and you can stop caring and be smug and self-satisfied?” The proper response to this person is to ask whether they give so much as ten percent. (“What? No, why should I?! I do my part by yelling at you!”)"

tomjen3 12y ago
The problem with that is that it only works if you believe that 10% makes sense. For me it doesn't - it is either 0% or whatever several 100% of my current income it would take to do my part (I don't see how not currently earning enough to repay would be enough to get me of the hook, certainly car payments are not payed in percentage of income). Thus, for me, the only answer that makes sense is that we have no obligation to save the world, but we are allowed to donate whatever we want. Besides who says all lives have equal value?
- krstck 12y ago
  > Thus, for me, the only answer that makes sense is that we have no obligation to save the world, but we are allowed to donate whatever we want. That's the status quo. The whole reason we're having this conversation is because not enough people are donating X% in order to fix global poverty. So, what's your burden? What's my burden? 10% is a handy figure because it's small enough to be doable for most people, but large enough such that if everyone were donating 10%, we'd have enough money to basically fix global poverty forever. It's handy for us to agree to discharge our infinite debts to each other by agreeing upon some figure. 10% fits that nicely.

drcube 12y ago

This is the same Peter Singer who told parents not to send their kids to college and instead send their tuition money to Africa. But apparently, if you send your kid to college anyway, he could make enough to send half his salary to Africa every year, far outweighing his parents' initial college fund. So who is right? I like that Singer holds this guy up as an example, for doing the exact opposite of what Singer actually claimed was morally right.

driverdan 12y ago
Source?

bshimmin 12y ago

"Mr. Wage" is a lovely example of an aptronym: http://en.wikipedia.org/wiki/Aptronym http://en.wikipedia.org/wiki/Aptronym

rry 12y ago
Not to be a downer, but it's pronounced "wah-GEE", with a hard G. source: used to work a few desks down from Matt.
- nocman 12y ago
  Wow, now there's a guy guaranteed to have his name mispronounced 99% of the time (well, at least by people who have never heard it spoken). [ edited for typo ]
  - willmacaskill 12y ago
    I know; his brother actually just gave up and started introducing himself as "Wage" (pronounced as you'd think) rather than "WAG-ee"

ernestipark 12y ago

For those interested, one way to build this charitable muscle and lifestyle is to start a charitable trust (at least in the US). It's not just for the ultra wealthy. You can start any old investment account and commit to funding it regularly say $20/month or 1% of your salary to start. Then when you hit $5k or more you can transfer those funds to a trust you create with say Fidelity or Vanguard ($25k minimum). You can then disburse these funds from the trust to the charitable org of your choice. The nice thing about this option is you can save now without having to decide where to give. You can take time to research and make an educated informed decision on where to give. You also get the dual tax benefit of not getting taxed on these capital gains and the deduction of a donation if you itemize. It's very cool to see people giving critical thought on how they give. But sometimes it can be intimidating to start. Just starting with anything is better than nothing and you can build from there. You don't have to give 50% like this guy. Building it into your lifestyle and budgeting is a slow and gradual process.

xur17 12y ago
I'm interested in this approach - is there any charge to create the trust? Also, I wish the minimum for Vanguard was lower - I already have an investment account with them, and this seems like a great way to get started.
- ernestipark 12y ago
  Shouldn't be - I think it's just the same as most investment accounts in that there is a small management fee that takes a percentage cut. In this way Vanguard is the best as it has the lowest rates I know of for the casual investor, but the minimum is certainly high.
- rhc2104 12y ago
  The fee is a percentage of your assets: https://www.vanguardcharitable.org/individuals/fees_and_expenses/ https://www.vanguardcharitable.org/individuals/fees_and_expe... It starts at .6% per year, and decreases when the account size is huge.
djb_hackernews 12y ago

techtivist 12y ago

I am not sure if this is really "effective altruism". When I decided to leave a high paying job to start an education startup in order to pursue my passion to make a change through education, I got similar advice. I was told it would be more "effective" to keep my job and donate the money to education related charities instead. But I realized that as an software engineer, my skills could prove much more impactful, and directly so than the relatively meagre money I could donate. As they say money is cheap. I felt, and I still feel I could amplify my impact by using my skills rather than just throwing money at the problem. Second, I wanted to be more aware and involved in the issues I wanted to contribute to, which I couldn't do unless I dove in. There are a lot of good organization out there that are making great impact, but there are equal number of "bad" ones that are perhaps having a negative impact or are not aligned to ones values. GiveWell and CharityNavigator can only go so far.

jarrettc 12y ago
The relative impact of your money vs your time depends in part on your income, you skill-set, and the causes you would choose. A person with a high income but few relevant skills would probably have the greatest impact by donating money. For example, a trader interested in preventing disease might not have any skills in developing or delivering vaccines. But that trader might have a substantial amount of money to donate to organizations that do have those skills. On the other hand, a software engineer with a modest income might find a very effective nonprofit that could do much more if only it had access to software development talent. For that engineer, donating time might achieve much more than donating money.
ceras 12y ago
I think both you and the article are in-line with effective altruism (the movement). The crux of EA is objectively and dispassionately deciding what causes do the most good with your scarce resources (time & money) and deciding how to best support them. Reasonable people will disagree on whether working in the industry or donating profits from a higher-paying industry will work better for you. Education isn't a popular EA cause but whether it is or isn't optimal depends on the change you think your start-up will have contrasted against what impact you could have elsewhere. Check out https://80000hours.org https://80000hours.org for a way more in-depth exploration of the different career-related EA strategies.

buro9 12y ago

https://en.wikipedia.org/wiki/Tithe https://en.wikipedia.org/wiki/Tithe 10% of income is doable. I treat it like a form of tax in which I have a say. It's going to be taken (that's the way in which I think of it as a tax), but now I get to say who receives it. Last year I favoured Medicine San Frontiers due to the Ebola outbreak, but in general I favour Liberty, Open Rights Group and small charities that provide computers to Africa, or bicycles for the disabled in the UK (Wheels for Wellbeing). 10% really isn't too much, and so long as you do it early you'll likely never notice it. Then again... perhaps this is why I don't have a deposit for a mortgage. Or perhaps that was poor budgeting for the bit of salary I did take home and keep.

a3voices 12y ago

Should you also donate money to save hypothetical aliens in a far away galaxy, if we find out they exist? What about a fund to help people relocate from flooded cities from global warming 200 years in the future? What about donating to keep A.I. simulations from being shut off? Why donate to help people and not animals or bacteria? What about the fact that the universe is going to die from entropy, and all people die anyways from old age? What's the point? Note: I try to not donate any of my money to any cause ever

hmate9 12y ago
Because some people are not as lucky. Some people don't have the basics such as water which we take for granted and it is all because of LUCK. What's the point of life if not to help each other survive and enjoy life? Sure, you need to keep yourself and your family comfortable but to actively distance yourself away from ANY kind of donation is just sub-human imo.
JacobLBryan 12y ago
If you think one of those is the most efficient way to avert suffering then sure, why not?

crimsonalucard 12y ago

I'm ashamed to say I donate $0. It's the right thing to do, it's altruistic and I respect the people that do it; but I can't bring myself to care more about the rest of the world then I care about myself/my family. Am i the norm or the minority?

SomeCallMeTim 12y ago
You and your family live in the rest of the world. It's not just altruistic, it's also rational for your own self interests. It's not mutually exclusive: That's a false dichotomy. If you can't care about your community enough to donate something, then I think your values may need reexamining. Even if that something is donation of old clothes and used items instead of throwing everything away. And finally, it's not about how many people donate and how many don't. It's the right thing to do, and asking if you're "the norm" is just looking for a justification. Do the right thing. Don't just be narrowly selfish.
- crimsonalucard 12y ago
  Logic doesn't apply in this case. If I donate money I am acting against logic. My self interest benefits more if I use the money for myself rather then giving it away and getting the benefits in a form that is heavily diluted. It is the aggregate donations of people that can, in the end mutually benefit my self interest. However my individual donation is just a drop in the bucket; I stand to benefit the most by not donating and letting others donate. Thus, the logical move is to not donate. It is actually counter intuitively detrimental to my self interest if everyone acted this way. Garrett Hardin described the paradox in his famous paper: http://en.wikipedia.org/wiki/Tragedy_of_the_commons http://en.wikipedia.org/wiki/Tragedy_of_the_commons This does not mean I think it's ok not to donate. A large part of our lives as humans are not dictated by logic. What I meant in the original post is that from an emotional standpoint I just don't feel a heavy burden that I need to donate. $20000 that could be a donation I'd rather spend on a worthless luxury (i.e. new car) for me... and that's not logic talking either, it's just my gut, emotional desire.
  - 12y ago

ceras 12y ago

How many here are pursuing a similar goal? Donating 5%, 10%, even 50% of their pre-tax income? I love the effective altruist movement - it's pretty much what I spend most of my time thinking and reading about - but this is a very touchy subject to discuss casually so I've never met people in real life (or in my industry) who are also into this. My own goal is to give about 50% of lifetime earnings, though with the flexibility to scale that back to a floor of 20% in the event my income drops a lot (I'm at the mercy of tech salaries, and just not willing to jump to a career that destroys my work-life balance). The tech industry is known for having a disproportionate amount of effective altruists, given how pragmatic and numerical the conclusion to donate to the most effective charities is.

willmacaskill 12y ago
That's great! (I'm guessing I probably know you, but can't tell who you are). I'm hoping to donate >50% too; I've been donating about 10% but I've been on a low salary; next year I'll be able to do 50% I think.
- knite 12y ago
  Not sure if you'll see this, but this thread inspired me to send an email to 80K, which I've known about for a while. I'm planning to become a 50+% donator in the next couple of years.
JacobLBryan 12y ago
I'm doing 1/3rd of gross, though it's not really very much since I'm still a student and I only work summer internships. Once I graduate I'm planning on setting a cap based on the cost of living wherever I end up, and donating everything above that.

fobcat 12y ago

"What is the moral code of altruism? The basic principle of altruism is that man has no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice is his highest moral duty, virtue and value. Do not confuse altruism with kindness, good will or respect for the rights of others. These are not primaries, but consequences, which, in fact, altruism makes impossible. The irreducible primary of altruism, the basic absolute, is self-sacrifice—which means; self-immolation, self-abnegation, self-denial, self-destruction—which means: the self as a standard of evil, the selfless as a standard of the good. Do not hide behind such superficialities as whether you should or should not give a dime to a beggar. That is not the issue. The issue is whether you do or do not have the right to exist without giving him that dime. The issue is whether you must keep buying your life, dime by dime, from any beggar who might choose to approach you. The issue is whether the need of others is the first mortgage on your life and the moral purpose of your existence. The issue is whether man is to be regarded as a sacrificial animal. Any man of self-esteem will answer: “No.” Altruism says: “Yes.”" -Ayn Rand

swombat 12y ago
Gotta love Ayn Rand and her incredible ability to make bare, simplified, polarising dichotomies out of rich, complex topics, then paint the extreme opposite to her as evil, without examining whether her own chosen extreme may be equally evil. I mean, she really has taken the "build a straw man and set it on fire" approach to an art form (quite literally... and I'd add that the Fountainhead is a great book, if thoroughly misguided from a philosophical point of view). Altruism as she defines it is obviously crap. What she fails to do is to clarify the extreme egocentrism that she proposes in an equally critical way. Here's an amusing attempt to do so using her own format: > "What is the moral code of egocentrism? The basic principle of egocentrism is that other people have no right to exist other than for your sake, that service to you is the only justification of their existence, and that their sacrifice for your good is their highest moral duty, virtue and value. > Do not confuse egocentrism with self-respect, self-awareness or respect for your rights. These are not primaries, but consequences, which, in fact, egocentrism makes impossible. The irreducible primary of egocentrism, the basic absolute, is the total unimportance of the other—which means; not caring one whit about others, using them for your own means, sacrificing their feelings and even their lives if necessary—which means: the other as a standard of evil, the self as a standard of the good. > Do not hide behind such superficialities as whether you should or should not use people. That is not the issue. The issue is whether those people have the right to exist without being of use to you. The issue is whether you are really compelled to notionally support the existence, day by day, of people who are of no apparent use to you. The issue is whether your needs are the first mortgage on their life and the moral purpose of their existence. The issue is whether other people are to be regarded as sacrificial animals. Any man worth calling that will answer: “No.” Egocentrism says: “Yes.”" As usual, the better place to sit is somewhere in the middle. No, you do not exist just to serve others, and total self-abnegation and sacrifice is certainly not a productive way to live. Neither, however, is total self-adoration and worship of your ego. Both are mistaken paths. The far better path is to realise that you need a balance of both respect for your own self, and connection to others, to live a good, fulfilled life. For your own sake, fobcat, and not for mine, I hope you can read and understand the above...

jayhuang 12y ago

> Sure enough, he says that in 2013 he donated more than $100,000, roughly half his pretax income. This is pretty impressive to me. Many will say "well, if half of it is 100k, he still has at least 100k", except this is pretax, meaning he keeps less than 100k; besides, before saying it's not a big deal, how much are you contributing? I personally donate 40% of my post tax income anonymously to various initiatives/organizations, which means even less pretax, but that's what I can afford without jeopardizing my family's well being. It doesn't have to be monetary, but a little bit of help goes a long way. I'm glad there are people who do whatever they can to help out with the less fortunate.

collyw 12y ago

There was a story of a university researcher doing this a few years ago, on a for more modest wage. http://www.bbc.com/news/magazine-11950843 http://www.bbc.com/news/magazine-11950843 On the one hand I think its far more generous, though as pointed out, the trader will end up donating a lot more cash. Either way, good on them. I have too much uncertainly about my future to make such a commitment at this moment (and to be fair I really think that politics should arrange a fairer society so that individuals don't need to do such things). It's in the back of my head that if I get rich I could do so much more for society.

joshstrange 12y ago

Right now I don't give a large amount to charity past Kiva loans (I try to average $25 every month or two) and a handful of causes online (sub $500/yr) on an as-needed basis. I'm trying to be as aggressive as possible paying off my debt (my debt payoff is a little over 30% of what I take home monthly and I plan on using the "snowball method" so that number will not change as I pay off debt to accelerate the payoff) because it doesn't seem smart to give away money when that puts me on the hook for more money (interest). If there is an error in this logic I would greatly appreciate it being pointed out to me. I'd be interested in increasing my charitable contributions but I'm not sure where would be best to send more money to. I am personally a fan of direct charity instead of going through an organization as I feel it reduces overhead. I like Kiva loans because once I get paid back I just re-loan the money so that slowly I am increasing the amount I loan monthly while keeping my monthly contribution the exact same (or slowly increasing it, I want to get to $50/mo within a few months). I also like Kiva because I know exactly how much is going to Kiva vs the person asking for money (something that is hidden or hard to find out for most charities IMHO). My approach is not based on anything specific it's more of just what has happened naturally since I started working full time.

dennisgorelik 12y ago

Could anyone explain to me how donating money to charities is better than giving money to your family, service providers and businesses that give you food and goods?