Strategies

The effective altruism guide to donating this giving season

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People in the effective altruism community aim to use evidence and careful reasoning to work out how to best promote the wellbeing of all. To find the highest-impact charities this giving season, they’ve done tens of thousands of hours of research and published over 50,000 words of analysis this month. We read it all, and summed up the main recommendations by area.

But which of the 9 problem areas listed should you personally give to? We’ve got you covered here too. This tool asks you six questions and adjusts the ranking based on your beliefs:2

Quiz: Which problem should you give to? →

In the full post, you can find (i) how we came up with the list, (ii) more advice on how to narrow down the list, (iii) more information on each charity.

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How much is one vote worth?

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Just 537 votes in Florida would have been enough to change the outcome of the 2000 election from George Bush to Al Gore – a margin of 0.009% (recount pictured above). And that wasn’t even the closest-won state that year: in New Mexico the margin was a mere 366 votes.

People say it’s your civic duty to vote, but it also seems like it’s very unlikely your vote will make a difference.

Who is right? Is voting really valuable, or a waste of time?

We looked into the research on this, especially regarding the US Presidential election. The answer, surprisingly, is that the single hour you spend voting for the President and Congress can be the most important thing you do with an hour each four years – and we expect similar numbers for other kinds of elections outside the USA. It also looks like there are effective techniques you can use to ‘get out the vote’, if you want to do more than just vote yourself.

The impact of your vote largely depends on 2 things, which we’ll investigate in turn:

  • The chances of your vote changing the election outcome.
  • How much better for the world as a whole one candidate is, compared to another.

At first blush it might seem that the chances of your single vote changing the election outcome are zero. But while the chances are low, they could be around 1 in 10 million if you live in a swing state.

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Interview: trying to change the resources industry from the inside

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Benjamin Todd interviewed Michael Dello-Iacovo about his attempts to do good as a geophysicist inside the Australian mining industry.

What does the job involve?

I’m a geophysicist working for a resources company in Australia. The resources industry is broad, and includes exploration, mining and oil and gas production. Roles in the resources industry include geologists, environmental scientists, engineers (of almost all types), information technology, and a host of others. All of these potentially involve some intermittent field work. I’ll focus on geophysics and geology, as these are the roles I’m most familiar with. Note that this summary is focussed on private oil & gas and mining companies, not government or research organisations. While the roles may be similar in these organisations, the culture, salary and other perks are likely not.

As a resources geophysicist, my work ranges from data processing (which is actually more enjoyable and challenging than it sounds), interpreting and developing geological models and spending time in the field, where my role becomes more one of contractor management, environmental/safety auditing and data quality management. Being in a technical role, I don’t have a lot of meetings (perhaps 2-3 formal meetings per week), and a lot of time is spent behind a computer screen.

Why did you take this job?

I first decided to enter the resources industry part-way through my university science degree because I had a long-time love of rocks and minerals, I liked physics,

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Just how bad is being a CEO in big tobacco?

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In 1994 the CEOs of the largest tobacco companies all testified before congress that they thought nicotine was not addictive and were widely mocked. How much were they paid relative to the damage they were doing?

Last year I wrote about the most harmful careers and had encouraging smoking at the top. But how bad is it exactly?

Two researchers recently put together some data that can help us estimate this and the numbers are pretty remarkable.

They compared the number of deaths caused by a cigarette company with the amount the CEO was paid. For this they used market share in the cigarette industry as a proxy for harm, and the WHO’s old estimate that 5.6 million people die due to cigarettes each year – now up to 6 million.

Doing some calculations, it looks to me like across the companies they could track, which collectively make up 45% of the global market, CEOs are paid $23 for each premature death resulting from the existence of their firms.

Note that there are other moral and practical reasons not to take jobs that do harm, but here we will focus just on the direct damage caused.

The authors draw a comparison to the life-saving treatments available if these CEOs wanted to make up for their harmful work by donating to charity:

If it is assumed that all of the CEOs analyzed are attempting to maximize their income in order to give to charities to save lives [25],

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Where should you donate to have the most impact during giving season 2015?

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Many of our readers choose to give away substantial sums over the ‘giving season’ around Christmas and New Year. Where should they give so that their money has the biggest social impact?

This post is based on a combination of my existing knowledge, some judgement calls based on three years working in effective altruism, and brief consultation with the people involved in the groups below. It’s not based on in-depth research, and the recommendations could easily change. Take this post as a starting point for your own analysis.

Note that we’re looking for the charities that help others the most, treating everyone’s welfare as equal. If you have a particular attachment to a specific cause, you’ll need to factor that in separately.

This flowchart is a summary of the advice below. Read on for more details.

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Podcast with Ben West, who expects to donate tens of millions for charity through tech entrepreneurship

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I recently interviewed Ben West (second to left), the founder of Health eFilings. After reading 80,000 Hours’ website, Ben entered tech entrepreneurship – from software engineering – in order to ‘earn to give’. Amazingly, Ben pledged to donate any money he made above the minimum wage. His company helps American physicians file paperwork with the US government, and collect ‘performance based pay’, much more easily. Several other 80,000 Hours alumni have ended up working in his company. You can read a summary of the key points from the interview below.

Summary of the interview

  • Ben West was influenced by Peter Singer’s work when he was young to start donating his income. Four years ago he was a software engineer donating to New Harvest, a meat substitute organisation.
  • He spent almost a decade at a large healthcare IT company, which helped to prepare him for what he’s doing now. He doesn’t think he could have successfully started this company without having experience in the health IT sector first.
  • He learned about 80,000 Hours through a link on the blog Overcoming Bias. Reading our work on entrepreneurship made him willing to consider starting his own business despite the fact that he’s risk averse by nature. He then spoke with some other well-informed people, including Carl Shulman (who volunteered for 80,000 Hours in the early days), who gave him more information about what the path involved.

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What’s the easiest way anyone can have a big social impact?

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Many people want a career that contributes to the world, that helps others live happier lives. To do this, some become teachers, some work in the nonprofit sector, and others work in many other sectors. Sometimes this involves significant personal sacrifice – at the very least, “socially good” jobs usually have lower earnings.

Let’s suppose you want to minimise sacrifice and maximise social impact. What should you choose then? What would be good is a career option that’s:

  1. Open to most of our audience (college grads in developed countries).
  2. Involves little or no sacrifice.
  3. Has as large a social impact as possible, with high confidence.

I think a path like this exists, as I’ll argue in the rest of this post. I call it the easy baseline:

  1. Take whichever job you’d find most personally fulfilling.
  2. Give 10% of your income to the world’s poorest people.

As of 2008, you can give your income to the world’s poorest people through GiveDirectly, a charity that provides one-off cash transfers to the poorest people in Kenya via mobile app. Every $1 you give results in $0.90 in the hands of one of the world’s poorest people. This intervention could soak up billions of dollars in the coming years, so could be pursued by many people.

If you want to have a social impact with your career, giving 10% is the easiest thing you can do, and I think almost everyone reading this should do it. You can take a public pledge to do so in just a few minutes.

Below I’ll explain in more detail why doing so is such an attractive option.

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Why you should focus more on talent gaps, not funding gaps

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Many members of the effective altruism community see making a difference primarily in terms of moving money to fill funding gaps rather than moving talent to fill talent gaps. This seems to me to be one of the community’s more serious mistakes, which causes us to:

  • Put too much weight on earning to give and fundraising.
  • Put too little weight on gaining expertise and developing the skills needed for direct work.
  • Overlook pressing causes that aren’t funding constrained.

In the rest of the post, I’ll:

  1. Outline what I mean by talent gaps.
  2. Suggest why the community might be biased towards focusing on funding gaps.
  3. Argue there are whole cause areas we’ve completely overlooked due to this focus.
  4. Argue that many of the causes the community does support are also more talent constrained than funding constrained.
  5. Argue that the importance of talent constraints compared to funding constraints is likely to increase over the next 2-5 years.
  6. Argue further that this imbalance is likely to persist in the long-term.
  7. Consider some of the arguments against focusing on talent gaps.
  8. Give ideas for what the community should do differently in order to focus more on talent gaps. In particular, I’ll outline who should earn to give and who shouldn’t, and list the greatest talent needs within the community.

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Common investing mistakes in the effective altruism community

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TRADE_L1_Pillar_headline_Graphs_o_tcm5044-9478Many in our community are investing money to donate later, as well as saving for retirement and emergencies. Here’s some mistakes I’m concerned they’re making when investing.

I’m not a qualified financial advisor, and this should not be taken as investment advice. For speed, I’m also not referencing all my claims and this piece isn’t as thoroughly researched as normal – I just want to get the ideas out there. Please do your own research before making any investments. This post is based on personal interests of mine, and was not written in work time.

This post is aimed at people who already understand the basics of personal finance and investing. Some starting points for an introduction are here and here.

In summary:

  1. Don’t expect to earn 7-10% returns from US equities. It’s more likely to be 1-7%. Adjust your assumptions about retirement savings and giving now vs. giving later calculations accordingly.
  2. The baseline portfolio is the global market portfolio, roughly 40% international stocks (half US, a quarter emerging and a quarter other developed markets), 20% corporate bonds, 30% international government bonds, and 15% real assets. If you don’t think you can beat the market, this is much closer to what you should invest in than 100% US equities.
  3. Divide your savings into a personal component and an altruistic component. Make sure you’re saving enough in the personal component to cover emergencies and your retirement.

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Can you have more impact working in a foundation than earning to give?

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Photo credit: Flickr – Refracted Moments

Key points

  • Working to improve grants at a foundation could well be more effective in terms of the impact of the money moved than earning to give. Which is better will usually come down to how good your personal opportunities are to make money, or get a job at a large foundation working on an important cause.
  • If you know of a cause area or organisation that is many times more effective than what any foundations you could work at would make grants to, then earning to give is likely to be better.
  • There are other issues, like the impact on your long-term career trajectory, that you have to consider as well as the direct impact of the money you move.

As soon as we thought of the idea of earning to give, we started thinking of ways to beat it. One idea that was floated in the very early days of 80,000 Hours was working in a foundation to allocate grants to more effective causes and organisations. Since a foundations grantmaker might allocate tens of millions of funding, far more than they could earn, maybe they could have a greater impact this way?

In this post, we provide a model for comparing the impact of foundations grantmaking and earning to give, which some people may find useful for specific scenarios where they have more info on the inputs. We also provide some very tentative estimates using the model to demonstrate how it works.

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Update: how many extra donations have we caused?

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One way 80,000 Hours has an impact is by increasing the amount our users donate to high-impact charities. As part of our annual review, we did a quick update to the figures from our last review. The process we used wasn’t as thorough as we would have liked, but provides some encouraging evidence of our impact.

What we did

We identified the largest donors we know of who (i) have made significant plan changes according to our definition and (ii) say they intend to earn to give.

We asked them the following questions via email:

  • How much have you donated over the last three years?
  • How much do you expect to donate over the next three years?
  • Where to?
  • How much of this is attributable to 80,000 Hours? (meaning what wouldn’t have been given if 80,000 Hours didn’t exist).
  • How much have you pledged to give as part of GWWC or otherwise?

For those people who responded last year, we asked for an extra year of data. You can see the answers and case studies from last year’s review in the appendix here.

We received responses from all ten people asked. Each intends to give to whichever charities they believe to be highest-impact (in practice, this mostly means effective altruist organisations or charities recommended by GiveWell or Giving What We Can). Also included in our results is last year’s highest donor (“A”),

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Is wealth inequality so extreme that it’s OK to be a ruthless trader?

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U.S._Distribution_of_Wealth,_2007Wealth inequality globally is incredibly high. Perversely, this can be an argument in favour of working in finance.

Many people are concerned that ‘earning to give’ in the financial industry is overall harmful for the world, even if you give away most of your income to outstanding charities.

To figure out if this is true, we have been researching the size of the harms, and benefits, caused by finance. (Though please note 80,000 Hours is not just about earning to give and in fact we think it’s the best path for only a small share of our readers.)

One of the concerns we’ve investigated is that certain parts of quantitative finance are a socially-useless competition between traders that only changes who gets some amount of income, not that someone gets it. I think this is the case, but the incredible amount of inequality in the world makes this argument against working in finance fairly weak.

If you are working in ‘low-latency arbitrage’, make a random clever trade on a stock exchange and beat some other trader to a profit by 1 millisecond, whose pocket is this money coming from? A poor African farmer? No, they have no wealth to take. A middle class American family? It’s possible, but most of their wealth, if they have any, is probably in their house or bank account.

We don’t have perfect figures here, but looking at reasonable estimates,

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Defining ‘Earning to Give’

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We’ve found there’s sometimes been confusion about what ‘earning to give’ means. Here’s our working definition.

You’re earning to give if and only if:

  1. You deliberately pursue a career that is high-earning (given your options) in order to do good through your donations AND
  2. 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.

As with all the technical terms the effective altruism community has introduced, we should worry about how the meaning of that term might change over time as it gets more widely used. For ‘earning to give’ I think the biggest concern is that the qualifying bar for % donations goes down: I think someone who’s in a high-earning career but only giving 2% shouldn’t count as ‘earning to give,’ but I can foresee scenarios in which people start using the term that way. Of course, for someone who is not able to take a very high-earning career, the bar for % donations should be lower.

Sometimes I hear ‘earning to give’ to be used almost synonymously with ‘donating’: I think, though, that it’s more useful to keep the concept of ‘earning to give’ focused on a specific career strategy, rather than simply donating in whatever career you’re already in.

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Effective altruists love systemic change

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Effective altruists are out working every day to fix society’s systemic problems. It’s time to definitely rebut the claim that we don’t care about systemic change.

Yesterday we put to rest the idea that 80,000 Hours, and effective altruists more generally, are only enthusiastic about ‘earning to give’. While some people should earn to give, we expect the right share is under 20%, and think that ‘earning to give’ is now more popular among the people who follow our advice than it ideally would be.

Today I want to put to rest another common misunderstanding about effective altruism and 80,000 Hours: that we are against systemic change.1

Despite being the most widespread critique of effective altruism, the idea is bizarre on its face. We are pragmatists at heart, and always looking for any ways to more effectively make the world a better place.

Why couldn’t pursuing broad-scale legal, cultural or political changes be the most effective approach to making the world a better place? The answer is simply that they could!

So there is nothing in principle about the idea of maximising the social impact of your work that rules out, or even discourages, seeking systemic change.

What about in practice, though? Here are some systemic changes people who identify as effective altruists are working on today:

  • Most of the recent Open Philanthropy Project research and grants, on immigration reform, criminal justice reform, macroeconomics, and international development, are all clearly focussed on huge structural changes of various kinds.
  • The OpenBorders.info website also researches and promotes the option of dramatic increases in migration from poor to rich countries.
  • A new startup called EA Policy, recommended for support by my colleagues at EA Ventures, is trialling making submissions to open policy forums held by the US government over this summer.
  • Our colleagues at the Global Priorities Project research the most important policy priorities for governments, and how they can establish better cost-benefit and decision-making processes.
  • One of GiveWell’s main goals from the beginning, perhaps it’s primary goal, has been to change the cultural norms within non-profits, and the standards by which they are judged by donors. They wanted to make it necessary for charities to be transparent with donors, and run projects that actually helped recipients. They have already significantly changed the conversation around charitable giving.
  • Giving What We Can representatives have met with people in the UK government about options for improving aid effectiveness. One of the first things I wrote when employed by Giving What We Can was about appropriate use of discounts rates by governments thinking about health services. Until recently one Giving What We Can member, who we know well, was working at the UK’s aid agency DfID.
  • Some 80,000 Hours alumni, most of whom unfortunately would rather remain anonymous, are going into politics, think-tanks, setting up a labour mobility organisations or businesses that facilitate remittance flows.
  • Several organisations focussed on existential risk (FHI, CSER and FLI jump to mind) take a big interest in government policies, especially those around the regulation of new technologies, or institutions that can improve inter-state cooperation and preclude conflict.
  • 80,000 Hours alumni and effective altruist charities work on or donate to lobbying efforts on animal welfare, such as Humane Society US-FARM, or are activists working for dramatic society-wide changes in how humans view the moral importance of non-human animals.

It looks to me like it’s more accurate to say that effective altruists <3 systemic change.

We’re not done though.

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80,000 Hours thinks that only a small proportion of people should earn to give long term

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Norman Borlaug didn’t make millions, his research just saved millions of lives.

One of the most common misconceptions that we’ve encountered about 80,000 Hours is that we’re exclusively or predominantly focused on earning to give. This blog post is to say definitively that this is not the case. Moreover, the proportion of people for whom we think earning to give is the best option has gone down over time.

To get a sense of this, I surveyed the 80,000 Hours team on the following question: “At this point in time, and on the margin, what portion of altruistically motivated graduates from a good university, who are open to pursuing any career path, should aim to earn to give in the long term?” (Please note that this is just a straw poll used as a way of addressing the misconception stated; it doesn’t represent a definitive answer to this question).

Will: 15%
Ben: 20%
Rob: 10%
Roman: 15%

Instead, we think that most people should be doing things like politics, policy, high-value research, for-profit and non-profit entrepreneurship, and direct work for highly socially valuable organizations.

The misconception persists for a few reasons: when 80,000 Hours first launched, we led with the idea of earning to give very heavily as a marketing strategy; it was true that we used to believe that at least a large proportion of people should aim to earn to give long-term;

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Why are wages less stable in skilled professions?

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There is some evidence, in fact, that markets for highly skilled workers, such as engineers and other specialized professionals, exhibit systematic periods of boom and bust…1

Earnings tend to fluctuate significantly more in highly skilled professions than in others, rising to high levels for a number of years before plunging and, ultimately, rising again. Why is this the case? Here’s the explanation put forward by Harvard economist George Borjas in his leading textbook on Labor Economics.2

What’s going on?

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What are your chances of getting elected to Congress, if you try?

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Congress being sworn in

The short answer to this question is ‘very low’. In total there are 535 seats in Congress and 320 million people living in the USA. At any point then, just 1 in 600,000 people living in the USA are members of Congress.

In a competition this insanely selective, only a small share of the population will have what it takes to seriously pursue a career in national politics. Some people who seem like they could be in with a chance – great undergraduate results, high verbal intelligence, charisma and persuasiveness – come to us looking for advice on their career.

If you were one of these people and actually tried to become a member of Congress, your odds would be much higher than 1 in 600,000 – but how much higher exactly?

It’s not straightforward to find a way to make progress. Nevertheless, we think we have found an approach that can get us in the right ballpark for some kinds of people. The method we will use is called reference class forecasting. In reference class forecasting you find a group that you are a member of and see what share of people in that group succeed.

Who makes it to Congress?

If you want to know how closely you resemble existing members of Congress the paper to start with is ‘Membership of the 114th Congress: A Profile‘, from the Congressional Research Service.

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What’s the best way to spend $20,000 to help the common good?

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I recently came across the following question posted by Paul Buchheit (the founder of Gmail):

Assume that I’m going to get rid of $20,000 and my only concern is the “common good”. Which of these is the best use of the money: give it to the Gates foundation, buy a hybrid car, invest it in a promising startup, invest it in the S&P500, give it to the US government, give it to a school, other?

Many of our users donate money as way to do good with their careers, and I liked this way of posing the question – it’s both broad and concrete. So I spent an hour writing out a rough answer.

I’ll take each option in turn and eliminate the worst ones, then compare a shortlist at the end.

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The winner takes all economy

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It’s said that we live in an increasingly “winner takes all” economy. The following chart provides a nice illustration.

From “The Rich are Getting Richer” by The Investor Field Guide (click image for link)
From “The Rich are Getting Richer” by The Investor Field Guide (click image for link)

It shows that from the mid-90s, the companies with the largest profit margins have seen their profit margins expand dramatically – from about 15% to over 20%.

Those at the bottom have seen their profit margins shrink, and the middle 60% have seen little change. The winners are increasingly taking it all.

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