Interview with Holden Karnofsky, co-founder of GiveWell
Holden Karnofsky is the co-founder and co-executive director of GiveWell, an independent, nonprofit charity evaluator. We recommend GiveWell as a leading source of information on where to have the largest impact with your charitable donations.
In 2012 GiveWell moved over $9.5 million to its top charities and the amount of money moved by GiveWell has so far been roughly doubling each year. GiveWell also recently formed a partnership with GoodVentures, a new multi-billion dollar foundation which aims to do as much good as possible. This has already had huge impact. For example, at the end of 2012 Good Ventures awarded $2 million in grants to GiveWell’s top recommended charities.
Key career points:
- Initially choosing jobs that you are good at, helps to be able to have impact and influence later in your career.
- More broadly, paying attention to abilities and fit when choosing a career is important for estimating the impact of your career.
- The direct impact of your job is important because the creation of wealth and improvement of productivity generally benefit the world as a whole in the long-term.
- Academia is a career you have to decide about relatively early on in your life.
- As an entrepreneur, passion and belief in your project is very important for eventual success.
What were the biggest decisions you made in your career, and how did they lead you to your current role?
It wasn’t a very deliberative process; when I got out of college I just wanted a job and the only thing I knew that I wanted was to earn money. There was something about going travelling around the world for a year or going to grad school that just didn’t sit with me. I didn’t have a good reason, but I thought I was going to go insane if I spent more time borrowing money and learning and gathering information instead of going out and doing something. I wanted to live in New York and so I looked for jobs there, and I got three offers. I took the best offer in terms of convenience and pay, which was a job at a hedge fund.
After a year there I applied for jobs at companies recruiting in colleges, again looking for something that sounded interesting and would pay me well. I was given an offer from another hedge fund and I really liked the people who interviewed me. It sounded like what they were doing was really intellectually fascinating. They were in an area of markets that is not the most quantified and there are a lot of qualitative things you need to do to make good predictions and they were making good predictions. So I wanted to see how they did that and I thought it would make me smarter about understanding the world and making predictions. I didn’t think that this was the job that would have the most impact, but I thought that this is a job that I have available to me that will develop my general personal talents. And then at the hedge fund I was trying to give away my own money and that’s what led to GiveWell.
Just to be clear, I was always very focused on social impact; it’s not like I just wanted money so that I could buy things. There were just so many things out there and I knew so little about the world, that I thought the proper first step would be to have a real job and build my skills at something and bounce around until I found something that made sense.
Also, while I was at the hedge fund, I spent a lot of my free time trying to think about what I could do to have maximal positive impact on the world. I came up with a lot of ideas for businesses or nonprofits. But ultimately I think the best idea I came up with was the one I bumped into because I was, myself, an underserved customer, and therefore I could see and verify a real unfilled void, not just theorize about something that seemed to be an unfilled void. I don’t think this is a coincidence. I think a lot of the best ideas get “bumped into” because it’s hard to know that something is a real need, and one way is by actually needing it.
Looking back at the process you went through in your career choice, how would you evaluate it?
It was a process that wasn’t as good as it could have been. I could have used help from an organization like 80,000 Hours. I think I made good decisions, but one of the things I could have used help with is understanding what it’s like to be an academic. People usually either completely ignore that possibility or they completely ignore every other possibility. And it’s something you have to decide on quite soon. My path of rolling around in different jobs to see what would develop me personally would have disqualified me from academia after a certain point. I don’t think I should have been an academic, but I think I should have thought about it harder and been more informed about what it involved. I think an organization like 80,000 Hours could have helped me be more certain that I didn’t want to be an academic, and I might have been an entrepreneur earlier, because I think I do actually have an entrepreneur personality and skill set, but I didn’t realise that. I wasn’t very aware of entrepreneurship and I could have been. Another example where I could have used help is that I applied and got rejected twice from Teach for America. I obviously wasn’t a good fit; I just didn’t have the right personality for it.
How did you get the idea to start GiveWell?
When I was working at the hedge fund and looking to give and do as much good as possible, I realised that I was just way too busy and that there was nowhere for me to even start, there was no information that I could get which was even vaguely comparative, in terms of comparing charities impacts, and looking for the highest impact one. That was what led to starting GiveWell.
How optimistic were you about GiveWell becoming a success?
I looked at the size of the charitable giving market, and I realised that even 1% of the market would be $2bn/year. I didn’t necessarily think 1% was doable, but at least I knew that GiveWell didn’t need to be a mainstream phenomenon to be impactful. I didn’t know if we would find enough people to have much impact but I was just so passionate about what we were doing and believed in it so much, that I felt like it was crazy if there weren’t enough people to support this idea. It was kind of irrational. This is a very common phenomenon in entrepreneurs - starting a new organisation is hard and it has a lot of ups and it has really deep downs. So it’s very common for entrepreneurs to be a little bit insane and convinced that their idea is good, without necessarily having the data to believe it.
Where do you see your own career going?
I see myself as being at GiveWell indefinitely, possibly for the rest of my life, although I’m open to anything. Certainly I’m now at the point where I would definitely leave and do something else if I thought that it had higher social impact, and I would have the ability to assess that more than I did when I was out of college. But I don’t really expect that to happen, so I expect to be at GiveWell indefinitely.
What are your tips on how to choose a career with the highest social impact?
When it comes to picking a career, I really think that abilities and fit, and to some extent interest, are really important. It’s the kind of thing where you get very high variance and it will be detectable variance, in how well a job fits you and how well it fits your abilities and interests. Whereas I think that doing conceptual cost effectiveness analysis on which careers do the most good is very hard to do well, to a degree that is going to have low enough error bars to really play much of a role in the decision.
My advice is to start with what are you good at, what are you interested in, what job is a good fit for you. Then once you have a lot of jobs on the table, then narrow it down based on social impact. For example, you don’t want to be a salesperson for a tobacco company, when comparing it to being a fundraiser for a great non-profit. So there are differences that I think are semi-obvious and not too hard to detect. But I think a lot of differences are much harder to discern. As an example: say someone is trying to decide if they want to work in tech software or in non-profit fundraising. I actually think the question of which of these has higher social impact is really vexed. And it’s not going to do a lot of good to try and answer that question. I think it’s going to be more productive to look at which environment is a better fit for a person and leads to their being more productive and more excited about the job.
GiveWell has been the kind of thing that if I hadn’t been super passionate about it, it would have just fallen apart. And I think that to have a really high impact in a job, if the fit isn’t there, it will fall apart no matter what your social impact calculations say. Also the jobs that don’t seem to have high social impact, if you’re really good at them, you will gain in status, connections, contacts, you’ll learn things you never would have thought and you’ll be in unexpected positions to do good.
This is all from the frame of assuming the main goal is to do the most good for the world; I’m not saying that people should drop the idea of social impact, I’m saying what I think is the best way to get there.
Do you think that being good at a job is what you would expect to produce a lot of value, even apart for all the indirect things such gaining status and connections and building up skills which you can use later?
My intuition is that a really high fraction of the good that you accomplish with your career is the actual work that you are doing. When I think about the good done by a software company, I first and foremost think about what software does for the world, not about how much one will make and can give to charity, although that’s important too. But what software does for the world is a really big factor and it’s hard to estimate how much good is done by that.
Does this assume that the market is roughly efficient? If you believed that the market was often very inefficient, then just because you could get a job that you were really good at, you might not think that you would produce much social value through that job.
I don’t think I am assuming that. I think that a lot of jobs you can do have a lot of social value. I think that contributing to economic growth has a lot of social value and I think that making things more efficient has a lot of social value. I don’t think that requires an efficient market hypothesis. I am assuming a connection between productivity and social impact, which is something I believe for a reason, which is that creation of wealth and improvement of efficiency and productivity generally benefit the world as a whole. I do believe that.
Can you summarise your views on why job abilities are more important to consider when choosing careers rather than social impact?
It seems that there are two arguments that I’ve made for paying a lot of attention to job abilities and fit. You could imagine a formula where S is the social impact factor of your work - how much good is done by a unit of efficiency produced. E is your efficiency at the job, how good you are at it. So then social impact = E * S. But we have a much better estimate of E than of S. S has giant uncertainty bars around it. Though this is not always true, because sometimes S is distinguishable between options, as in the case of the tobacco company. But in a lot of cases, like tech versus non-profit I feel like it’s too hard to pin down which one has the better S, and so focusing on E is a way to get better direct impact.
Then there’s a totally separate argument that job trajectories tend to be more related to your effectiveness at a job than to their social impact factor, so even if you know what’s the most socially impactful, you may still want to focus on your skills because status, credentials and networks are so important to amass early in your career. Then later on you will be better positioned to take something with a high social impact factor and do it with high efficiency.
Thinking about social impact is very valuable when you’re narrowing down the field. But there are so many other constraints: what jobs can you actually get at your age, what jobs are the ones where the environment or the manager and the people fit you well. The more options you have, the more factors it makes sense to be narrowing things on, and one of those should be estimated social impact (the “S” factor) to be sure. And the more expertise and skills and status you gain, the more it makes sense to be thinking about how to apply them for maximal “S”, whereas when you’re still short on such things, it makes sense to be thinking about how to gain them.
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