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I've been pretty disappointed that I haven't heard people mention charitable donations as something to do once you've hit it big. That we have talents and opportunities makes us pretty damn lucky and helping out the unfortunate -- not just the less fortunate -- shouldn't be ignored.



That's a pretty difficult topic of its own. Philanthropy is like investing, except much more difficult. The good news is, like investing, you have time to think and learn.

Philip Greenspun has some interesting thoughts: http://philip.greenspun.com/non-profit/ and http://philip.greenspun.com/materialism/early-retirement/

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Very well put. If you find your self with a few spare million, I would think it is good stewardship to apply that advice to selecting charities, with as much care as you would investments. It also helps with the "purpose" aspect paul mentions.

It would be pretty frustrating if you quickly did a sizeable donation (sizable compared to the norm for that charity) and find out a month later about some scandal, or how only a small portion of what you thought was a donation really was a donation etc... you would just get on with life, but it would innoculate you against further causes in future which is a loss for everyone.

So good advice, think of it as an investment (in terms of dilligence, time etc).

That and giving stupendous tips and totally making someones day, that must be a whole lot of fun.

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Plus, it is very difficult to tell if charitable giving is actually helping or if it is only helping people to rely on you.

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Wow. I couldn't disagree more.

I grew up the child of missionaries in Central America in the 70's and 80's. My parents ran a school for Hondurans during a time when 1 out of 100 kids graduated from High School. Half the students paid tuition and half were scholarship students.

In 1997, my parents went back to Honduras to help with the disaster relief after a hurricane destroyed much of the Honduran infrastructure.

And over the course of 6 months they were there, they had dozens and dozens of former students find them after hearing that they were in the country, and they stopped by to say "thank you". Those former students were now Doctors, Lawyers, Teachers, Company owners etc...

So, I'd disagree rather heartily with the idea that charity increases dependency.

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While your point about the help your family gave and the long term impact they made is totally valid, you are missing the point I think. The incorrect assumption you're making is that charitable donation == starting a school and teaching self-sufficiency.

I think that the good kind of charitable giving is exactly what your parents did, going and teaching a valuable skill that others can use to help themselves. I guess it foes back to the "education is the key" mantra that so many people tout, but it's true.

So while I disagree with your post and I believe that many, if not most, of charitable donations are poorly spent, siphoned off by bureaucracy, or otherwise wasted, teaching people skills is a type of charity that I would support.

Though the model you post about sounds like it was actually quasi-charity, as students had to pay for the classes. This I believe is the best of both worlds, as it allows do-gooders (your parents and other donors who supported the program) to do good, but it also requires sacrifice from the student and their families, which builds character and makes it more likely that the gift will be recognized for what it is and appreciated - and that the person will go and do likewise for others.

From my iPhone - excuse typos etc

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I disagree with your post and I believe that many, if not most, of charitable donations are poorly spent

Really? I'd be interested to hear why you think that. Are you speaking from personal experience? Have you been involved with different charities and been dismayed or shocked when you looked at how poorly run or wasteful they were?

I gave just one example of what my parents did. But, I was surrounded by people that worked for Christian missionary agencies, and non-religious organizations overseas while growing up. They all did a wide variety of things from straight religious work, education, running hospitals, building houses, schools, wells, teaching better agricultural techniques, etc...

All of that was funded by donations to the non-profits that they were working for. If you want to call that other work "quais-charity" I guess that's up to you. But, I've been involved in the grass roots with many different non-profit's and that's pretty much what the vast majority of them do.

I can't think of a single organization out of the dozens that I personally interacted with that simply handed out cash to people.

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Haiti GDP graph:http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mk...

Haiti population graph: http://www.google.com/publicdata?ds=wb-wdi&met=sp_pop_to...

Haiti Unemployment: http://en.wikipedia.org/wiki/File:Haitiunemployment.GIF

Haiti aid: (for relative scale of aid) http://www.devex.com/articles/haiti-aid-facts

USA GDP graph: http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mk...

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Dude I was a missionary for a few years. But that's not the point. And your personal experiences (and mine) are irrelevant when it comes to looking for the unbiased data about whether there is waste in the world of charity. Do you agree?

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I don't doubt that charity can be useful in some cases however, from what I've read I am not fully convinced that it helps most of the time. I lived in Kenya for a short while several years ago and since then have become interested in African development.

I have read or heard of a number of cases where "do-gooders" only make the situation worse.

For example, after the genocide in Rwanda, the UN set up refugee camps in neighboring Congo to help the refugees. Unfortunately, the refugee camps mainly ended up helping the people who were responsible for killings. They would take refuge there, control the food supply and then use their power to keep on terrorizing people.

Many charity projects are also extremely tough to know if they will work. An example is a story I heard about an aid project in a small village in a developing country. The project's goal was to install a well for the village to use as people (mainly women) would need to walk 2 hours each way every day to the nearest water supply. The project was well thought out and created a sense of ownership amongst the local people. After a number of weeks, the well was completed and there was a big celebration. Several weeks later, the aid organization came back to do a follow up. To their shock, they found that the women were still walking miles each day to get water rather than using the well. When they asked the women why they were doing this, the women responded "We used the well for a few days but then we realised that walking to get water was the only time during the day for us women to bond and talk amongst ourselves."

Another example is that when malaria nets are given away only a small percentage of the nets will actually be used. However, if people in a village are educated about the benefits of malaria nets and then given the opportunity to buy a net for $1, even if $1 might be a day's pay, the nets have a remarkable high-use rate. People are similar no matter where you go - if you get something for free, you value it less than if you have to make a decision with your earnings. You may say that is a good case of charity but if they are selling the nets, it sounds more like a business rather than charity.

A lot of aid sent to developing countries is siphoned off by bureaucrats and government officials thereby making them more rich and powerful and less accountable to their own people. If a government is getting a substantial sum of money from foreign donors, accountability then goes to those foreign donors, not the people of the country.

Over $1 trillion dollars in aid has been distributed to African countries in the past half century or so and what is the result of that? Are many places really better off because of that charity?

Mobile phones are completely changing the way business is done in developing countries. I can't remember the exact study but there is a correlation between the number of mobile users in a developing region and the GDP growth. I believe that the availability of mobile phones at competitive rates (not government controlled) are probably doing more to help countries develop than many aid projects. Landlines in many countries have been government regulated and painfully inefficient. When I was in Kenya, my host family received a visit from the government-controlled telecom company to fix their landline. They had been waiting four months for them to show up.

In your case, with the schools, I think that is an example of a good case of charity. However, many charities and aid organizations are under pressure to show results in X number of months rather than in X number of decades. Many decisions about aid projects are not even made in the areas themselves but are made back at the head offices or at the government level in places with completely different realities.

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Yes, Ritz difficult but by no melanie impossible if you are willing to investoren some time an thought.

As far as I know the best organisation focusing on the effectiveness of charities is www.givewell.net. Might be a good startinpoint, even if you are only donating small amounts (all their research is available online for free).

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> Yes, Ritz difficult but by no melanie impossible if you are willing to investoren some time an thought.

Off-topic, but still. Did you use speech recognition?

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Yeah I did, my fault, sorry. Will be more careful in the future when using my german milestone/droid for commenting (or any other text related matter).

Since I can't delete/edit my original comment any more, here is what I intended to write:

"Yes, it’s difficult but by no mean impossible if you are willing to invest some time an thought.

As far as I know the best organisation focusing on the effectiveness of charities is www.givewell.net. Might be a good startingpoint, even if you are only donating small amounts (all their research is available online for free)."

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Especially if it's in high-impact/low-probability causes that are starved for money. Small amounts there could make big differences if they pay off.

Eliezer Yudkowsky wrote a lot about this on LessWrong.com, about how dog shelters get a lot more money than existential risk prevention (singinst.org or Lifeboat.com), Friendly AI research (singinst.org again) or finding cures to the diseases of aging (sens.org). Of course, puppies deserve our help. But do they deserve more resources than the kinds of things I mentioned above? Or is this just the way our cognitive biases steer us, pulling at our heart strings against our best interest?

A couple of wealthy people could easily double the amount of research in those fields (in fact, Peter Thiel, formely of Paypal did pledge a few millions, but more are needed).

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While I understand your point, I think that most people don't know what "existential risk prevention" is. And quite frankly, websites you linked to (except sens.org) convey impression of overly-paranoid semi-crazy science fiction, which is unlikely to win funding over puppies.

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That's part of the point--people irrationally care more about the marginal puppy than the marginal degree of killer asteroid/supervolcano/nuclear war prevention. If you're one of the few people who care about making a small contribution toward preventing nuclear war than a large contribution toward saving a single puppy, the websites look much saner.

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I'm late to the party, but rationally speaking...

Chance that a bunch of nice, sane, ordinary people can save the lives of lots of cute animals (or hell, humans)? Very good.

Chance that a bunch of crazy people with their crazy web site can stop aging, or better yet, stop an asteroid?

Slim to none.

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In order to speak rationally about it, you would have to give the likelihood ratio you believe they could reduce the sum of existential threats by, however low that is; then multiply that by the utility you would receive from saving human civilization. Compare this to the utility you receive from saving a puppy, multiplied by the probability of saving that puppy. Compare the two numbers.

Rationality means thinking quantitatively where applicable, not qualitatively.

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For those who want to learn more:

http://www.nickbostrom.com/existential/risks.html

http://en.wikipedia.org/wiki/Existential_risk

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> finding cures to the diseases of aging

I'll be also be old and sick someday, and I think that accepting the fact that you're going to die eventually will make you happier.

I also have a cynical view on ... increasing the life span of people can only be harmful to anybody.

> Or is this just the way our cognitive biases steer us, pulling at our heart strings against our best interest?

Again, what makes you so sure it's in our best interest?

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> I'll be also be old and sick someday, and I think that accepting the fact that you're going to die eventually will make you happier. > I also have a cynical view on ... increasing the life span of people can only be harmful to anybody.

This reaction is totally rational as long as you believe that aging is both bad and inevitable. It's called the pro-aging trance. If we were hit by a baseball bat on the head every week and there was nothing we could do, over time we would also rationalize why it's good. But if you were to ask someone who had never been hit on the head if he wanted too, he would say no. In the same way, if you asked someone who biologically stayed with the body of a 25 years old if he wanted to get frail, he would say no. As soon as someone proves that the diseases of aging aren't inevitable (say, by making a mouse live in good health for 10x the normal lifespan), the pro-aging transe will be broken. Listen to the part about the pro-aging transe here: http://www.ted.com/talks/aubrey_de_grey_says_we_can_avoid_ag...

Your body is already repairing most of the damage of aging and replacing most of your cells over time. It's just that there are certain kinds of damage that we haven't evolved to repair, and over time they add up. Past certain thresholds they cause pathologies, and we get frail, suffer and die. But if we can periodically repair that damage (without the need to understand all of metabolism, just the damage), we can avoid ever getting close to these thresholds.

> Again, what makes you so sure it's in our best interest?

Not being killed by an asteroid or a supervolcano is pretty obviously in our best interest, as well as not dying from cancer or alzheimers. If I put a gun to your daughter's or your fiancee's head, you'd feel it. But if I say "all of humanity could die" (which include your daughter and your fiancee), you suffer from scale insensitivity and don't care nearly as much even if it's a much more terrible fate (all the things about which humans care about would be gone).

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Yeah, well, if everybody would live forever ... our planet doesn't get any larger, which means overpopulation and NO CHILDREN.

Be careful what you wish for, it might just became true.

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This has been addressed many times (and btw, people wouldn't live "forever" -- you can still be hit by a truck, at least until we can backup brains).

http://fightaging.org/archives/2006/09/overpopulation.php

But in general, you have to ask if the problem that would be solved is bigger than this new potential problem, and do we have the right to make the decision not to develop these therapies and condemn future generation to die from aging? Every day that they are delayed, thousands die.

Maybe hard choices will have to be made: very low birth rates, or some rate of voluntary deaths (religious people who refuse to take the therapies, maybe?), etc. Maybe it'll be no problem because of technological advances (molecular manufacturing, advanced biotech, etc) and we'll have more than enough resources for everybody, and can colonize other planets.

But these problems caused by people not dying so much seem to be smaller than 100k-150k people dying each day after a long-period of suffering and frailty, causing pain to their families and friends. We've cured many diseases and fixed many of humanity's problems so far, and the benefits seem to outweigh the costs. Goal #1 is to cure diseases, living longer is just a side-effect, as it always was.

Objections to curing the diseases of aging must be at least as big as the problem. Otherwise it's the same old thing about overpopulation that has been going around ever since we invented sanitation and vaccines.

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> do we have the right to make the decision not to develop these therapies

Actually the bigger question is what gives you the right to play with mother nature?

> But these problems seem to be smaller than 100k-150k people dying each day after a long-period of suffering and frailty

So? I've had relatives dying, not that big of a deal. They live on in the heritage they leave behind (like their children).

Very low birth-rates so that some old farts with money can live longer?

What do you think, those vaccines or those modern HIV treatments are getting to poor countries like those in Africa?

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> Actually the bigger question is what gives you the right to play with mother nature?

Nature doesn't care about us (or anything), and our genes don't care about us (only about being replicated). But we care about us, and if we don't take charge, nobody will. Reducing our suffering and making our lives better is a noble goal. It's the same as helping someone on the street or caring for a sick friend, except on a much larger scale.

> So? I've had relatives dying, not that big of a deal. They live on in the heritage they leave behind (like their children).

That's fine, you can refuse to take the medicine, then. But those that want it should be able to develop it.

> Very low birth-rates so that some old farts with money can live longer?

So that everybody who wants to can live longer. Once these things exist, there'll be such popular pressure to make them accessible that it won't be a choice, and like all technologies, at first it will be expensive and won't work very well, and later it will be very cheap and work well. Even if not everybody gets it simultaneously, it's still better if it exists than if it doesn't.

> What do you think, those vaccines or those modern HIV treatments are getting to poor countries like those in Africa?

Would things be better if those vaccines didn't exist at all? And yes, they are getting there (ask the Gates Foundation or Larry Brilliant about his work on smallpox), just not as fast as most people would want to. But that's not the fault of the science.

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If you think the decision of whether to give away money isn't one that can wait, you disagree on the main point of the article's advice, which is that you can go wrong by spending your money quickly, and should therefore wait until you're ready before doing anything major with your money.

Perhaps he could have given philanthropy a little mention where he suggested investing a tiny bit in startups, for experience, but his genearl advice was, "Do something remarkable." He didn't suggest investing a big chunk of the money in startups, or founding a startup, or anything else.

There are plenty of unremarkable ways to donate money to non-profits. Anyone can start a non-profit. They claim to be benevolent. So does the government. If you donate to some non-profits, you might as well be donating to the government by optimizing for high taxes. He could find someone to advise him to donate to a good organization, so the money doesn't get wasted, but that brings us back to the point about not trusting every financial advisor on the planet.

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Philip Greenspun did address this in an article on a similar subject: http://philip.greenspun.com/materialism/early-retirement/ (scroll down to section "Non-profits are NOT the Answer" if you don't want to read the whole thing).

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Greenspun's piece on nonprofits is a hackjob written by someone who hasn't spent enough time around them to know much other than his own perception. The idea that the nonprofit world is filled with people who just couldn't make it in the corporate sector is a fallacy, plain and simple.

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And let's not forget that Philip's own non-profit enterprises - namely, ArsDigita University and the ArsDigita Foundation - collapsed long before the company did.

Why was that? Probably because Philip ran them like a business, and decided that, when the going gets tough, the tough fire their Executive Directors and half the paid staff.

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I feel like Philip had already been pushed out of the company before the university and the foundation shut down. But, it's been almost 10 years, my memory could be faulty.

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Why not take that money and instead of tossing it to 'charitable' destinations use it to create an investment fund to help jumpstart people with projects that will create jobs and/or are aimed at sustainable living or 'green' technologies ?

That would be a lot more effective in the long run than it would be to just pass the responsibility for the spending off to some overhead ridden charity.

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being charitable is admirable and all, but i'd be pretty disappointed to see someone turn this type of article into an opportunity to impose their personal beliefs on others.

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[deleted]

I fail to see how saying that I am disappointed that something hasn't been mentioned is saying "most of the adivce in the HN comments is crap" or is imposing my beliefs on others.

Saying people should think about something does neither and makes strong assumptions about what I think without evidence.

And btw -- I have found the advice across the recent threads to be high quality, particularly that relating to the Graham/Buffet value investing.

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Yeah, that didn't come out like I wanted it to and I didn't really mean to say anything about your article, but rather the comment... I was going to edit it, but I guess I just deleted it, so either way never mind.

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Frequently quoted number is the 80% that are spent by the charities on supporting themselves and 20% reaching the actual people they are helping.

A friend of mine worked for a larger charity and the level of self-indulgement was astounding. Especially around the end of fiscal year when they had to spend the whatever budgeted cash left on something... anything, so not to have the budget cut next year.

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Ok, but isn't it better that at least 20% goes to charity than 100% towards buying luxury cars or other less constructive ways of using that money?

Also, doesn't a very large percent of the money invested in a business go towards supporting themselves too? To keep things running, people have to be rewarded, just like any other organization. Bills have to be paid, people have to be fed. And its even harder to keep good people on board at a nonprofit when they could be making 3x as much at a for-profit company.

I've worked with dozens of nonprofits and have a bunch of friends that do. They drive me completely insane with disorganization, red tape and horror stories of mismanagement. But I've never met someone who worked in a legitimate nonprofit who's heart wasn't in the right place. At the end of the day, the money is usually doing something good

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I've always felt that if I ever cashed out big on something, I'd probably put a good chunk of the money into building a charitable foundation and make the foundation my fulltime job. If you have the money to invest and you've already been successful at founding an organization, why not invest in something that can continue to fund raise and keep giving over the long term?

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Great. One more foundation to which I have to apply, pitch and convince the decision makers. More red tape.

Seriously, when you are faced with that problem (of having too much money), please look around. Just maybe, there might be something that already does what it is that you want to do. You do not have to reinvent the wheel to satisfy your ego by having a foundation with your name on it.

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I've worked with plenty of nonprofits over the years. More than I can count. The point here isn't about putting a name on something for an ego boost, its about effectively managing my (hypothetical) money in a controlled and sustainable way over a longer period of time so it can be put into multiple causes, rather than dumping it all into someone's lap one day and saying 'go'. And by moving this hypothetical money into a 501(c), it puts the money to work over time while keeping it out of reach to blow on tempting luxuries. I stand behind this idea.

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