People seem to find donation decision write-ups interesting, so here's mine! Cross-posted from my blog.
I’ve decided where (and how much) to donate for 2016! The punchline: I’m donating $20,000 to a donor-advised fund run by Nick Beckstead, $5,000 to GiveWell for discretionary re-granting, and $1,000 to GiveDirectly. Here’s how I came to that decision.
The EA Giving Group
I think the main way I do good is by working at Wave, not by donating, so I don’t want to spend a lot of time optimizing my decision. I also don’t think I’m better at choosing where to give than other people in the effective altruism community. Because of this, I decided to let someone else choose my donations for me.
Fortunately, this year I found out about the EA Giving Group, a donor-advised fund directed by Nick Beckstead and another person who also provides most of its funding. I know both directors personally and have a lot of trust in their thought process, so I’m happy to let them decide my giving for me. Nick wrote a bit about the EA Giving Group in his section of GiveWell’s post on staff donations.
When I was looking at their previous donations, I noticed something interesting. Nick and his co-director made lots of grants to organizations that I now think are doing good work–but almost every grant happened while I was still skeptical of the organization in question. This is pretty clear evidence that they’re better at grant-making than I am!
A few other people have decided to give to the same fund this year, and as Nick mentioned in GiveWell’s write-up, the Open Philanthropy Project is now funding similar organizations, which might make it harder for Nick to find good opportunities. But I expect it will still be easier for him than it would be for me.
GiveWell and GiveDirectly
Even though I think the EA Giving Group Fund is the best place for me to give, I donated to GiveWell’s top charities and GiveDirectly as well. I did this for similar reasons to the ones Alex and Denise cite here:
[Our reasons for donating to global poverty causes] are a bit more complicated and have flowed from a mix of interlinked considerations:
We want at least part of our donations to be tangibly and robustly helping some of the worst-off people in the world.
We don’t want to solely be doing things which amount (or could be seen to amount) to paying salaries of ‘inner circle’ EAs who we know well.
GiveWell charities are easier to talk about and arguably allow us to send a less ambiguous signal to outsiders
I decided to give about 20% to global poverty causes because it was big enough to feel like a strong commitment to those organizations, but small enough not to feel like I was compromising the effectiveness of my main donation.
For the same reason that I’m letting Nick allocate most of my overall donation, I’m letting GiveWell allocate most of my global-poverty donation: I’ve been following GiveWell for years and have complete trust in their research. I made an exception to give $1,000 straight to GiveDirectly because I’m personally really excited about both what they do, and how GiveDirectly itself is run.
How much to give
I originally planned to donate 50% of my income this year, mostly because it’s a benchmark set by lots of other serious effective altruists. People like Jeff and Julia have put a lot of thought into their giving habits, and 50% seems like a level that doesn’t constrain their ability to have a fulfilling life, but still lets them give huge amounts. I earn less than most of the people I’m thinking of here, but I also have lower expenses since I’m not supporting a family, so 50% seems very doable.
This year I missed that target by a lot, mostly because I decided to exercise my Wave stock options early. This post is not the place to explain stock options, but basically, exercising stock options early means that if they go up in value, you pay much less tax on the gains. Financially, it’s mostly equivalent to making a cash investment in Wave.
Since the early exercise terms looked very good, I decided to exercise all my shares, which meant paying Wave a very large sum. I had enough savings to do that, but not enough to have a solid cash buffer afterwards. (I try to keep at least six months’ expenses in the bank to deal with unexpected things–like exercising a large lot of options.) Between building back up a cash buffer and keeping up retirement account contributions, I didn’t have enough left over to meet my original 50% target.
I’m not too disappointed about this–I think early exercising was the right decision, and I missed my goal by almost the exact amount of the early exercise investment. I expect to be able to donate 50% next year unless something else equally large comes up.
There are a few ways I’d like to improve my process next year:
I’m okay with not meeting my original 50% goal this year, but I might have been able to come closer with more budgeting or more strategic saving and investment. On the other hand, it’s possible I should be worrying less about budgeting (potentially at the expense of slightly constraining donations) if it frees up my attention for more important things like my work at Wave. I’d like to refine my views on this trade-off next year.
I’m thinking about making small gifts to popular cause areas that I haven’t found compelling so far. For me, this would probably be animal welfare and maybe some kind of political advocacy. While I’m not as excited about these areas as I am about the places I’m currently giving, I’m worried that this could be partly because I don’t follow them as closely. Making small donations seems like a good way to keep myself open to new information.
I have room to improve my donation logistics. I didn’t finalize my decision until a few days ago, and didn’t mail the checks until the 30th. The donations will still count towards the 2016 tax year if everything goes normally, but if there are any delays (for instance, a bounced check), I could end up having to count them in 2017 instead. I’d like to send out checks by Christmas next year to leave more room for error.
On the other hand, I’m very happy with the actual donations. I think the EA Giving Group will allocate the money much better than I could try to do on my own, and I’m excited to continue supporting GiveWell and their top charities.