Occasionally I encounter small donors (e.g. 10% pledgers earning <$200K) with highly specialised skills and knowledge (e.g. working on a sub-sub-topic of an EA cause area) who donate primarily to GiveWell top charities. These people do incredible amounts of good, and are highly commendable.
That said, I think would probably do more good by donating according to their inside view and special knowledge. Worldview diversification makes sense for large funders like Coefficient Giving, but their reasons don’t apply to small donors: diminishing returns, cross-pollination of ideas, etc. If all the small donors switched to specialised donations, then the community overall would still be worldview diversified, where the diversification is happening across donors rather than within each donor.
I think the optimal donation strategy for a small donor with domain expertise looks something like:
Save 10% in index funds by default.
Donate when you encounter an opportunity where (i) you can make a non-deferential case for funding it, and (ii) you are unusually positioned to evaluate or support it. This might happen once or twice a year.
Paradigm cases:
Political donations
Opportunities that the institutional funders wouldn’t fund, or it would harm them to fund
Areas where you think institutional funders lacks in-house expertise
Research that is illegible to generalist grantmakers but legible to you:
conceptual work requiring significant background to evaluate
a researcher you’re convinced is excellent through direct interaction but who lacks credentials
a theory of change requiring many inferential steps
A project that needs bridging before it becomes legible for institutional funding
Volunteering, when there’s some reason hiring you would be inconvenient
Richard Ngo seems to follow something like this strategy (though he might qualify as a mid-sized donor). I disagree with some of his specific donations — but that’s pretty much the point.
The main risks are:
Unilateralist curse — mitigable by focusing on opportunities with limited downside risk
Value drift — mitigable via donor-advised funds or similar mechanisms. I also think that people who have been donating 10% consistently for a few years should have more faith in their future self.
Cause Area Distortions — this would distort donations towards areas with a high intersection of {EAs} ∩ {specialists} ∩ {high-incomes}. So this would increase funding to AI policy, AI safety, pandemic preparedness, etc. But I think these areas are relatively underfunded compared with GHD and Animal Welfare.
Risk intolerance — a single bet that fails will sting much more than donating to a fund which has a 50% failure rate. But EAs routinely choose jobs on hits-based impact, so they should think of hits-based giving similarly. One partial solution: an impact insurance syndicate — ten friends each make highly specialised bets but agree to “share” the impact.
Awkwardness — giving a meaningful chunk of your income to someone you know personally is socially uncomfortable for both parties.
Another donation strategy that seems reasonable, if you have a high-impact job, is hiring a personal assistant or research assistant, to maximise your own productivty.
I’ll add again that GiveWell top charities achieve an incredible amount of impact, and have room for much more funding, so small donors should have a high bar for shifting their donations from GiveWell.
That’s fair. I think people mostly overestimate risks from value drift. I imagine following the “optimal strategy” I described above would still involve making 1-2 big donations a year, and most people don’t drift too far over a year. Especially if you’ve signed the pledge, you’ve been donating consistently for a couple years, most of your friends are EA, etc. The better ways to avoid value drift, and keep yourself committed, is writing a yearly blog post on your donations.
Some pushback seems warranted, so I upvoted and agree-voted. On the other hand, if you’re giving to a registered charity anyway, you can get tax credits, which means you can give more for the same net cost to you.
in Canada, you can get a 50% tax credit on donations to registered charities (meaning basically you get half back and can choose to donate twice as much for the same after tax cost, up to 75% of your annual income), and RC Forward lets you donate to GiveWell recommended charities (they forward on to various EA charities that aren’t registered in Canada, whereas RC Forward is, so you get the tax credit). I don’t know how generous the tax situation is in other countries, but typically there is some tax benefit, so if you’re going to give to a recognized charity, then DAFs make sense. I’ve used them for “I’m not exactly sure where I’m going to give because I haven’t done all the research I want to, but I want that tax credit, and it is inaccessible for prior years, so I’d like to give now and hold it in a DAF”. Which ended up with “I can give a large chunk of saved up funds from prior years to GiveWell’s mostly-unrestricted fund in the year when the US government defunded USAID”—worked out well!
But, I did find an opportunity last year (AIGS Canada—basically trying to inform Canadian parliamentarians about superintelligence risks and influence policy in a direction of “AI will be really impactful, don’t just treat it as normal technology”) where they needed money urgently, didn’t want to take money from non-Canadians because that’s a public relations vulnerability if trying to influence Canadian government policy, and weren’t a registered charity—and I felt the twinge of having stuck everything I’d planned to give for that year into a DAF, which is not ideal because giving them enough for a few months more operations really does seem to have had a good effect and I endorse having done it, in retrospect. So “don’t put all you’re planning to give into a DAF” is good advice.
I think for small donors, donating to the best unregistered charity is >>2x times the best registered charity, for the reasons OP outlines: registered charities are much better covered by large institutions, and lots of people are overanchored on registration so the unregistered are neglected by comparison.
The counterargument is that bednets/givedirectly are just pretty good and it’s unlikely any particular new thing beats them. Which is a fine approach, but not what we’re talking about here.
Small donors should not worldview-diversify.
Occasionally I encounter small donors (e.g. 10% pledgers earning <$200K) with highly specialised skills and knowledge (e.g. working on a sub-sub-topic of an EA cause area) who donate primarily to GiveWell top charities. These people do incredible amounts of good, and are highly commendable.
That said, I think would probably do more good by donating according to their inside view and special knowledge. Worldview diversification makes sense for large funders like Coefficient Giving, but their reasons don’t apply to small donors: diminishing returns, cross-pollination of ideas, etc. If all the small donors switched to specialised donations, then the community overall would still be worldview diversified, where the diversification is happening across donors rather than within each donor.
I think the optimal donation strategy for a small donor with domain expertise looks something like:
Save 10% in index funds by default.
Donate when you encounter an opportunity where (i) you can make a non-deferential case for funding it, and (ii) you are unusually positioned to evaluate or support it. This might happen once or twice a year.
Paradigm cases:
Political donations
Opportunities that the institutional funders wouldn’t fund, or it would harm them to fund
Areas where you think institutional funders lacks in-house expertise
Research that is illegible to generalist grantmakers but legible to you:
conceptual work requiring significant background to evaluate
a researcher you’re convinced is excellent through direct interaction but who lacks credentials
a theory of change requiring many inferential steps
A project that needs bridging before it becomes legible for institutional funding
Volunteering, when there’s some reason hiring you would be inconvenient
Richard Ngo seems to follow something like this strategy (though he might qualify as a mid-sized donor). I disagree with some of his specific donations — but that’s pretty much the point.
The main risks are:
Unilateralist curse — mitigable by focusing on opportunities with limited downside risk
Value drift — mitigable via donor-advised funds or similar mechanisms. I also think that people who have been donating 10% consistently for a few years should have more faith in their future self.
Cause Area Distortions — this would distort donations towards areas with a high intersection of {EAs} ∩ {specialists} ∩ {high-incomes}. So this would increase funding to AI policy, AI safety, pandemic preparedness, etc. But I think these areas are relatively underfunded compared with GHD and Animal Welfare.
Risk intolerance — a single bet that fails will sting much more than donating to a fund which has a 50% failure rate. But EAs routinely choose jobs on hits-based impact, so they should think of hits-based giving similarly. One partial solution: an impact insurance syndicate — ten friends each make highly specialised bets but agree to “share” the impact.
Awkwardness — giving a meaningful chunk of your income to someone you know personally is socially uncomfortable for both parties.
Another donation strategy that seems reasonable, if you have a high-impact job, is hiring a personal assistant or research assistant, to maximise your own productivty.
I’ll add again that GiveWell top charities achieve an incredible amount of impact, and have room for much more funding, so small donors should have a high bar for shifting their donations from GiveWell.
I would push back on DAFs- one of the value adds of nimble donors is donating to projects that don’t have formal status.
+1, especially with the vast majority of future Anthropic employee donations already locked in to DAFs
That’s fair. I think people mostly overestimate risks from value drift. I imagine following the “optimal strategy” I described above would still involve making 1-2 big donations a year, and most people don’t drift too far over a year. Especially if you’ve signed the pledge, you’ve been donating consistently for a couple years, most of your friends are EA, etc. The better ways to avoid value drift, and keep yourself committed, is writing a yearly blog post on your donations.
Some pushback seems warranted, so I upvoted and agree-voted. On the other hand, if you’re giving to a registered charity anyway, you can get tax credits, which means you can give more for the same net cost to you.
in Canada, you can get a 50% tax credit on donations to registered charities (meaning basically you get half back and can choose to donate twice as much for the same after tax cost, up to 75% of your annual income), and RC Forward lets you donate to GiveWell recommended charities (they forward on to various EA charities that aren’t registered in Canada, whereas RC Forward is, so you get the tax credit). I don’t know how generous the tax situation is in other countries, but typically there is some tax benefit, so if you’re going to give to a recognized charity, then DAFs make sense. I’ve used them for “I’m not exactly sure where I’m going to give because I haven’t done all the research I want to, but I want that tax credit, and it is inaccessible for prior years, so I’d like to give now and hold it in a DAF”. Which ended up with “I can give a large chunk of saved up funds from prior years to GiveWell’s mostly-unrestricted fund in the year when the US government defunded USAID”—worked out well!
But, I did find an opportunity last year (AIGS Canada—basically trying to inform Canadian parliamentarians about superintelligence risks and influence policy in a direction of “AI will be really impactful, don’t just treat it as normal technology”) where they needed money urgently, didn’t want to take money from non-Canadians because that’s a public relations vulnerability if trying to influence Canadian government policy, and weren’t a registered charity—and I felt the twinge of having stuck everything I’d planned to give for that year into a DAF, which is not ideal because giving them enough for a few months more operations really does seem to have had a good effect and I endorse having done it, in retrospect. So “don’t put all you’re planning to give into a DAF” is good advice.
I think for small donors, donating to the best unregistered charity is >>2x times the best registered charity, for the reasons OP outlines: registered charities are much better covered by large institutions, and lots of people are overanchored on registration so the unregistered are neglected by comparison.
The counterargument is that bednets/givedirectly are just pretty good and it’s unlikely any particular new thing beats them. Which is a fine approach, but not what we’re talking about here.