To me an overriding consideration here is the not-only-meta consideration; people who want to become effective altruist donors in the future would be extremely well advised to give something today, even if it's only a small amount. The same applies on a much larger scale to effective altruism as a movement. It must be doing something today, preferably a good deal; for it to wait into the indefinite future is death as a movement, and not only because others, perhaps already on the fence, will be as suspicious as I am of the Indefinite Meta. There will be no future EA orgs if the EA orgs that exist today are not supported today. (This is also true within particular EA categories.)
Also, waiting to donate increases the chance that you'll not donate in the future - donating now boosts motivation
I have an intuitive aversion to this idea of taking out a loan and I suspect other people do as well. Exploring why we're averse to this idea could explain why it might be a bad idea to donate as much as possible now (or lead us to all take out loans).
I think an EA should actually bite the bullet and do exactly that, if they believe the rate of return is high. The reason why people (including myself) don't do it is because debt is considered a bad and a negative thing. Psychologically there is a big difference between having a positive or 0 balance vs a negative one.
As a separate point, it's very likely that the most effective strategy for EA movement as a whole is a mixed one.
This is a useful post, and it's helping me think through my own decisions. Some quibbles:
Most generally, it seems like effective altruist organizations, like all organizations, are constrained by logistics and management and cannot absorb money and talent as quickly as it can be flung at them.
If your talents are logistics and management, this argument leads in the opposite direction!
if you don't fall into the upper limit of talent, it would be more advisable to ignore the haste consideration here and work on cultivating further talent first.
These two paths aren't necessarily exclusive. For example, I've heard people argue that founding a tech startup is both the best way to earn (expected) money and the best way to cultivate talent.
Given these constraints, I think it's worth taking the haste consideration somewhat seriously, but perhaps less seriously than it may seem on face value.
Strong agreement.
I have a question. If one sets up a Trust for a Charity, and appoints themselves the Trustee of that Trust, then my limited understanding under U.S. Law is:
1: The money is legally the Charities. It has been given by setting up the trust in the first place. (The advantage of giving now.)
2: The Trustee still has control over the money, and can decide to make investments to bolster it's strength, and such. (The advantage of investing.)
Is this sort of a similar legal construction to what is desired?
Or alternatively, at least close enough that if you brought that to an actual lawyer the lawyer could say something more specifically helpful, like the fake legalese below:
"Rather than a trust, it sounds like you want to make a 412(c) Endowment for a public charity, I can generate the necessary paperwork, which will likely cost hundreds dollars, However, I need to warn you that you can't use the money in the 412(c) to short sell as that is illegal under U.S Trust code 47c." Particularly since states likely have differing laws on this anyway.
I see at least one obvious downside which is 'That would cost legal fees.' I don't think generally lawyers are so expensive that this is a crippling objection, assuming some level of wealth, organization and/or fund pooling, but it definitely wouldn't work if you were considering something along the small scale of "What do I what to do to maximize the effectiveness of my 100 dollars without working with other people?" though.
Are there other positives or negatives to this possibility I am not aware of?
What exactly are you trying to achieve by setting up a trust?
Trusts are typically tax-avoidance vehicles.
Well, it appears to allow you to give money to someone/something else while still keeping control of the management of that money yourself.
So in theory, with a trust, the Charity is richer, but you're still investing the money rather than giving it to them immediately.
This seems to guard against the failure mode of deciding to hold off on giving and instead investing the starter money, becoming very rich, and then deciding "Nah, my value system has changed. Now I want to buy a private island instead of saving thousands of starving children."
Unless I just totally misunderstand trust law (Which is certainly possible.)
it appears to allow you to give money to someone/something else while still keeping control of the management of that money yourself.
Not "give money" -- the charity still doesn't get the money until it actually gets the money. What you give now is a promise that the trust in the future will give the charity something.
For example if the trust plans to disburse the money in 10 years, but the charity closes down in 5 years, have you given it anything?
seems to guard against the failure mode
Do you think the potential future you will also consider this scenario to be a "failure mode"? :-)
But yeah, you can use a trust as a precommittment device. However unless you're committing at least $100K or so to it I don't think it's worth the bother. You will need lawyers to set it up anyway, you'll have to maintain it, if you get cheap lawyers and they screw things up IRS might show up and be very unpleasant about it...
It seems to me that letting charitable organizations hold on to money for later purchases (over-funding them) just decreases their efficiency (amount of good done divided by amount of money donated). So a potential metric is whether the efficiency of a charity is going up or down over time (after adjusting for differences in the methods used to calculate the efficiency). If a charity's efficiency is increasing over time then it is under-funded. If efficiency is decreasing over time then the charity is potentially over-funded (but may just be investing in increasing it's productive capacity to do good). Once a charity's efficiency drops below that of the next-most-efficient charity, it is probably over-funded.
Additionally, money held in an account by a charity for more than a year can probably be personally invested for a higher expected rate of return than the charity is likely to feel is safe. If the charity can believe your precommitment then pledging to donate a lot of money (sufficiently "a lot" so as to over-fund them into inefficiency for several months or years) is probably more efficient than donating hastily. Set up a trust with solid investments and a reasonable payout schedule or something.
In personal terms, give what you can. That means balancing the opportunity cost of saving/improving random human lives against your own needs, which is more of a personal decision. A loan may be an appropriate donation if the rate of return is greater than the interest rate, but I wouldn't recommend getting a loan that costs more per month to service than you would otherwise willingly donate per month directly or getting a loan for more than the total donations a charity is expecting that year.
Quite a few people have talked about whether or not it's better to donate money or donate time now rather than save and donate more money later. While there's lots of nuance on these positions, there does seem to be roughly these two camps -- weighing in (mostly) on the give now side includes GiveWell, Giving What We Can, Scott Alexander, Matt Wage, and me. Weighing in (mostly) on the give later side include Paul Christiano, Robin Hanson, and maybe Brian Tomasik.
The general idea in favor of giving/working now is what Matt Wage calls the haste consideration, or the idea that we can spend resources now to get additional people involved in the movement, and doing so multiplies our impact substantially -- getting just one person to pursue altruism with the same effectiveness we would have done doubles our impact for the rest of our life.
This haste consideration, if true, has strong implications. It means not only would we want to donate as soon as possible, but we'd want to make sure we earn money as soon as possible as well, meaning opportunities like law or medicine that have high incomes but also significantly more schooling may be less appealing from an altruistic perspective. It also would mean we should be donating higher percentages of our income instead of saving, even if this would lead to giving less money over the long term.
However, I think the haste consideration might not be as powerful as it might appear, for three reasons I haven't seen discussed much:
Caveats
Before I begin to elaborate on these three points, I'd like to remind everyone that I'm speculating about funding needs that I know only a little bit about and it's quite possible I'm misrepresenting organization's needs for money or how they plan on using their funds.
I offer these ideas in the spirit of "putting things out there" for discussion and reconsideration, but I think there's a good chance that I'm wrong and look forward to being corrected.
How quickly can money and talent be used?
Right now it seems that the effective altruist movement cannot make quick use of large amounts of funding and talent. There are a couple examples of this:
Funding the Against Malaria Foundation
First, the Against Malaria Foundation is said to be constrained entirely by a need for more money, but they're still holding on to more than $4M from the previous year that they weren't able to immediately convert into nets. This leads me to believe, perhaps naïvely, that donating to AMF now versus donating to it a year ago would not make a difference in net distribution, therefore giving a larger length to the haste consideration than immediately thought.
Funding Effective Altruist Orgs
Second, organizations where the haste consideration is most immediately applicable, like Giving What We Can, 80,000 Hours, or Effective Animal Activism are constrained not just by money but also by the talent needed to spend that money well. Currently they're in large need of funding about six or seven staff positions between them. While there's definitely a need for this staff, funding them would take up, by my guess, less than $200K in the first year. Additional funding beyond that probably couldn't be spent immediately.
And even then, the salaries for careers couldn't be spent immediately either, because a recruitment process needs to be run first and people need to be hired and settled into their positions. So even among the $200K that could be spent soon wouldn't be spent for several months, and therefore there would be little difference between donating now and donating a few months from now.
Working for Effective Altruist Orgs
Furthermore, while the haste consideration would favor trying to launch into work as fast as possible without spending time to gather experience or further education in unrelated fields. However, many of these organizations also lack the capacity to take on a large amount of staff for long periods of time and are only looking for the "best of the best". Therefore, if you don't fall into the upper limit of talent, it would be more advisable to ignore the haste consideration here and work on cultivating further talent first.
More Generally...
Most generally, it seems like effective altruist organizations, like all organizations, are constrained by logistics and management and cannot absorb money and talent as quickly as it can be flung at them. Perhaps this is optimistic of how many resources are being channelled into the effective altruist movement and it turns out that everything could be used up, but excess money and talent would be better invested until it can be used well.
Could there be significantly better opportunities just a few years from now?
On the flip side of things, it could turn out that we end up with enormously better opportunities to spend money in just a few years. Given that non-profit cost-effectiveness varies widely, the discovery of a new giving opportunity (by say GiveWell Labs) could be huge and it's quite plausible that the returns from saving now and donating to this much better opportunity are higher than donating to whatever we can best find now.
It might make sense to give now if your giving time or money will make us find this opportunity quicker (value of information in giving), but it seems like many people are not in the position for this to be the case. For example, GiveWell labs is already fully funded and working about as fast as they can, and there might not be anything we can do to speed things up but wait.
Should we take out loans to give now?
While perhaps unfair or infeasible for a variety of reasons, a possible reductio ad absurdum of the idea of giving as fast as possible is the idea that we would be in the best position to give now if we took out large loans and donated the proceeds. Interest rates for loans are very frequently much less than the returns on giving now that some people have suggested, which could be 20% or more. Therefore, one could take out a loan now, donate it all, and use the rest of the income they earn over their life to repay the loan.
I have an intuitive aversion to this idea of taking out a loan and I suspect other people do as well. Exploring why we're averse to this idea could explain why it might be a bad idea to donate as much as possible now (or lead us to all take out loans).
Conclusion
Overall, it seems like the haste consideration is not as "smooth" or "linear" as it may seem. Non-profits rarely spend every dollar right as it comes in, instead gathering together many donations and making large purchases all at once. Therefore, whether you donate today or a year from now might not make much difference at all.
Given these constraints, I think it's worth taking the haste consideration somewhat seriously, but perhaps less seriously than it may seem on face value. For example, I think it often would be a bad idea to do things like eschew further education or refuse to save portions of your income. Though, luckily, I haven't heard of anyone taking the haste consideration so seriously that they would do this.