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Torgo comments on Open thread, Nov. 24 - Nov. 30, 2014 - Less Wrong Discussion

4 Post author: MrMind 24 November 2014 08:56AM

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Comment author: Torgo 26 November 2014 01:49:25AM 2 points [-]

Certainly that is an important point to consider. I could always place funds in a donor advised fund for now. However, if an organization that I donated to thought the funds would be best spent later, they could invest the funds. Considering this, my current thinking is that I should donate to an organization if they share the goal of reducing existential risk and I think they would be better at deciding on the best course of action than I would. Considering I am not currently an expert in areas which would prove useful to reducing existential risk, I'm leaning towards donating. Does this seem like a sensible course of action?

Comment author: jkaufman 01 December 2014 12:14:47PM 2 points [-]

In practice, charities don't really invest excess money or take out loans to spend money sooner. I'm not sure why. Possible explanations:

  • No one will lend much to charities, because they don't have much collateral and their income expectations are so uncertain. Or this leads to very high interest rates.
  • Investing money instead of spending it looks bad and is visible externally through things like the US Form 990.
  • You're required to spend at least X% of the money that comes in each year.
  • If you take a loan, having already spent the money makes it harder to fundraise. People want to pay for things to happen.
  • Investing extra money signals that you don't have room for more funding and so should get less money in the future.

Regardless, if you're thinking that your decision doesn't matter because the recipient can just do X or Y, and it turns out X and Y aren't really options for them, then your decision does still matter.

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