I’ve had very good results from offering unsolicited no-strings $X,000 gifts to friends who were financially struggling while doing important work. Some people have accepted, and it took serious pressure off them while they laid the foundations for what’s become impressive careers. Some turned me down, although I like to imagine that knowing they had backup available made them feel like they had more slack. It’s a great way to turn local social knowledge into impact. The opportunities to do this aren’t super frequent, but when it arises the per-dollar impact is absolutely insane.
Some advice for anyone who’s thinking of doing this:
—Don’t mention it to anyone else. This is sensitive personal stuff. Your friend doesn’t want some thirdhand acquaintance knowing about their financial hardship. Talking about it in general terms without identifying information is fine.
—Make gifts, not loans. Loans often put strain on relationships and generally make things weird. People sometimes make “loans” they can’t afford to lose without realizing what they’re doing, but you’re not gonna give away money without understanding the consequences. Hold fast to this; if the recipient comes back three years later when they’re doing better and offers to pay it back (this has happened to me), tell them to pay it forward instead.
—The results will only be as good as your judgements of character and ability. Everyone makes mistakes, but if you make *big* mistakes on either of those, then this probably isn’t your comparative advantage.
Do you give such gifts once per friend or sometimes multiple times? If you do it multiple times with the same friend, how do you handle conversations around that?
I guess if they found themselves in a similar situation then I’d *want* them to ask me for help. I have a pretty easy time saying no to people and wouldn’t feel bad about sympathetically rejecting a request if that felt like the right call, and maybe that’s not the norm, idk. But in any case, I offered one-off gifts, and it was always understood that way.
That does seem great. The hardest part of donating to your friends though is that you have to make it really clear that you don’t expect anything back, but that you also don’t want to fully provide them for the rest of their life. You won’t want to make your friends feel like they depend on you financially.
This sounds great—I think many underestimate the effectiveness of this kind of direct support. When giving money directly to talented and well-motivated people you know personally, you are operating with much more information, there are no middlemen so it’s efficient, and it promotes prosocial norms in communities. They can also redistribute if they think it’s wise at some point—as you mentioned, paying it forward.
I’ve had very good results from offering unsolicited no-strings $X,000 gifts to friends who were financially struggling while doing important work. Some people have accepted, and it took serious pressure off them while they laid the foundations for what’s become impressive careers. Some turned me down, although I like to imagine that knowing they had backup available made them feel like they had more slack. It’s a great way to turn local social knowledge into impact. The opportunities to do this aren’t super frequent, but when it arises the per-dollar impact is absolutely insane.
Some advice for anyone who’s thinking of doing this:
—Don’t mention it to anyone else. This is sensitive personal stuff. Your friend doesn’t want some thirdhand acquaintance knowing about their financial hardship. Talking about it in general terms without identifying information is fine.
—Make gifts, not loans. Loans often put strain on relationships and generally make things weird. People sometimes make “loans” they can’t afford to lose without realizing what they’re doing, but you’re not gonna give away money without understanding the consequences. Hold fast to this; if the recipient comes back three years later when they’re doing better and offers to pay it back (this has happened to me), tell them to pay it forward instead.
—The results will only be as good as your judgements of character and ability. Everyone makes mistakes, but if you make *big* mistakes on either of those, then this probably isn’t your comparative advantage.
Do you give such gifts once per friend or sometimes multiple times? If you do it multiple times with the same friend, how do you handle conversations around that?
Once per. That’s not a policy, I just haven’t yet felt moved to do it twice, so I haven’t really thought about it.
Does that mean that there were also no conversations where people who received money asked later for more from you?
That’s correct.
I guess if they found themselves in a similar situation then I’d *want* them to ask me for help. I have a pretty easy time saying no to people and wouldn’t feel bad about sympathetically rejecting a request if that felt like the right call, and maybe that’s not the norm, idk. But in any case, I offered one-off gifts, and it was always understood that way.
That does seem great. The hardest part of donating to your friends though is that you have to make it really clear that you don’t expect anything back, but that you also don’t want to fully provide them for the rest of their life. You won’t want to make your friends feel like they depend on you financially.
This sounds great—I think many underestimate the effectiveness of this kind of direct support. When giving money directly to talented and well-motivated people you know personally, you are operating with much more information, there are no middlemen so it’s efficient, and it promotes prosocial norms in communities. They can also redistribute if they think it’s wise at some point—as you mentioned, paying it forward.