What do we mean by earning to give?
Some people have skills that are better suited to earning money than doing good directly. By ‘earning to give’ we mean that:
(i) You deliberately pursue a career that is high-earning (given your options) in order to do good through your donations.
(ii) You donate a very significant proportion of your earnings, where for someone earning more than the average in rich countries, ‘very significant’ means at least 20% of income.
What’s our evidence this strategy is promising?
- Some people are unusually well suited to earning money. They can take a high-earning job and donate enough to pay for several people to replace them in the non-profit sector.
- This money wouldn’t have been donated otherwise, since people in high-earning careers don’t donate much of their income to charity.1
- This strategy is flexible: money can be readily reallocated to whichever organisation is most in need of funding at the time.
- There’s also solid research into which non-profits are most effective (for instance, as provided by GiveWell, which you can take advantage of.)
- Some wealthy philanthropists have had a huge impact in the past, and it may be possible to replicate their success by pursuing careers in business. Cases of philanthropists who deliberately aimed to make money in order to donate it are rarer, but do exist. For instance, Britain’s largest philanthropist, Chris Hohn, set up a hedge fund with the intention of donating much of the earnings.
Earning to give also gives an opportunity for you to make a big difference even if you don’t want to switch career trajectories. For example, Fred Mulder was an art dealer when he realized he wanted to make a difference; but even though he thinks his work is morally neutral, he continued with it, donating 10-50% of his earnings each year.
Since this path is more unusual, we’ve carried out extensive research into its pros and cons, and have published an academic article on the topic.
Which options are best within this strategy?
Of the paths we’ve investigated so far, those that we’ve found to be highest earning (though also often risky and extremely competitive) are, in order:
- Tech startup founder
- Trading in quantitative hedge funds (for earning to give)
- Front office finance (for skill-building & earning to give)
- Management consulting (for skill-building & earning to give)
- High-end law (for earning to give)
- Medical careers
In practice, you shouldn’t only consider the earnings of different paths as they stand today. You should also consider:
- What’s the value of the direct impact of the work? Might you cause harm?
- Which option will provide the best career capital?
- Will you be able to go through with making your donations, or will the culture cause you to give up?
Don’t forget, you may be able to have more impact inspiring others to donate than donating yourself. That suggests it may be better to do something you enjoy where you’ll get along with your colleagues than simply earning the most money.
Is this strategy for you?
Earning to give seems best when:
- You have a strong comparative advantage in a high-earning job.
- You’re particularly concerned to keep your options open about which cause to support.
- You’re at the start of your career and want to build career capital (because high-earning jobs often build good career capital).
- You think you can go through with donating a large percentage of your income, even if your colleagues don’t.