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The Trader Who Donates Half His Pay (nytimes.com)
228 points by anonu on Apr 6, 2015 | hide | past | web | favorite | 190 comments

I talked about this on HN a few years ago, but my friends and I planned to be this guy. In college we talked about all the money we'd make and how much we'd be able to donate. We all had a job offers for $32 - 42k/year. That was amazing! We were living on less than $1k/month in college. We had plans to give away 20%, 30%, or 50% of our income. We would barely even notice. Some of us even managed to do it for a few years. The world got to us, though. You start to notice that the coworkers that dress nicer and go to happy hour get promotions. One guy married a social worker and had four kids. One guy got tired of living in a studio apartment in New Jersey. One guy became a junior high science teacher. Twenty years later, I suspect that our average charitable contribution is down to around 5% of our income.

It is really hard to be counter-cultural like Mr. Wage. Especially when your plan requires you to remain completely immersed in the culture. It feels like there's a constant friction to overcome--like every choice takes a bit more willpower than it should. I think this is part of the reason that truly counter-cultural people and movements tend to segregate themselves from the rest of the world.

I don't mean to degrade Mr. Wage and his project. I hope this works out for him, but it's a very difficult road.

I think this is a really important concern. Btw, 5% is still quite a bit more than the average, so good work!

We're attempting to overcome this worry through community and behavioural economics hacks. E.g. I take every opportunity that I can (like this one) to say publicly that I'm planning to give away the majority of what I earn, which makes it a helluva lot harder for me to back out. Similarly for Matt - it would be embarrassing for him to renege on his commitments when he's been so open about it. And it feels like a much smaller sacrifice (if it's even a sacrifice at all) when most of your friends are doing the same thing - and some, like Jeff and Julia in Boston (http://www.givinggladly.com/2013/06/whats-it-like-to-give-ha...) are doing much more.

Not only is 5% of one's income a rather high number, even the average amount that people give in the United States is far higher than the corresponding amount in other countries (ex: Japan).

It may be the country's Christian leanings that contribute to this, but to be charitable is seen as a virtue and absolute good in this society. This is not necessarily the case in other societies.

I'm not trying to make this political, but I sometimes wonder how much of our charitable exceptionalism is related to the US having a weaker social safety net than many industrialized countries.

Whereas an American might donate to a food bank, homeless shelter, disaster relief, etc., a European might consider those activities the proper role of government and expect their (higher) taxes to go towards remedying the situation.

So, it might be that all industrialized nations share the belief that we should take care of our fellow man, help the needy, etc. Some believe it should be mandated and codified in the laws and policies of a nation; others believe it should be optional and driven by individuals.

I would second this interpretation.

When I lived in Germany I wanted to do some volunteer work and read up on the possibilities. A local explained to me, "Offering to volunteer at the library or a school sounds as strange to a German as someone in the US offering to volunteer with street sweeping, or with the IRS. That's the job of the government. That's what taxes are for."

Someone volunteering at a library can be seen as a rich person taking away a paid job opportunity for a poor person.

This tends to break out along political lines.

Christians, people who lean right, etc tend to give to social welfare organizations like the Salvation Army, Goodwill, foodbanks, etc. Basically groups that help out individuals.

Atheists, people who lean left, etc tend to give to artistic or societal organizations like a symphony, Greenpeace, etc.

I think the reasoning for this is simple. People on the right believe it is up to individuals to solve these problems and don't want the government involved. People on the left believe it is the government's role to solve these problems so they address their interests elsewhere.

D'you have a source?

Sure, googling for "charitable contributions by political party" gives the original article I was thinking of:


which I favored as opposed to the various studies that show Liberals tend to give less often and in smaller amounts of both time and money: http://www.huffingtonpost.com/2013/08/19/giving-back-_n_3781... and http://www.nationalreview.com/home-front/357562/which-politi...

> It may be the country's Christian leanings that contribute to this

Maybe so. I was taught to tithe 10% of everything I earned starting with my grade school allowance. 10% to God (which could go to a church or charity) and 25% to the bank. Everything else got spent on Legos and whatnot.

Fast forward twenty years (I'm 25) and I still siphon away 10% of my income into a separate account that I save for either church donations or charitable causes. At that point the money isn't really "yours" or at least that's what is typically taught in Christian culture. Makes it a lot easier to spend it on others.

Yeah, I seem to recall that the US gives a similar % of income as other countries once you subtract out donations to churches and to universities, which are both a much bigger thing than in other countries.

You're probably thinking of other Western countries. Remember that most Western countries have moral code derived from Christian morals.

What I mean is that if you look at countries with say top 50 GDP, many of them will be much lower than the "other western countries".

Monies donated to charity are also tax-deductible in US, and as a result the nonprofit sector is well-organized in terms of public outreach and so forth. One of the minor culture shocks I experienced coming to the US (from the UK) was the variety of billboards, radio, and TV ads encouraging people to donate their car, or boat, or whatever to this or that charity. At first I wondered why so many different charities were involved in giving cars to poor people, until someone explained that it was because you could (then) deduct the general market rate for the make and model of car involved. Nowadays they require more detailed documentation, eg the nonprofit has to give the donor a copy of the bill of sale within 30 days so that the donor knows how much to deduct. Turns out that some generous souls were inflating the size of their charitable donation on the tax forms in order to reduce their tax liability.

I also can't help noticing that some people who extol the virtues of religious giving are strenuously opposed to any expansion of government services, and seem to consider the whole idea of government taxation an intolerable confiscation of their money and thus an infringement upon their liberty. Such folk don't buy into the notion of a secular social contract between the state and the citizenry, and I often wonder if it because they see the state as being in competition with the religious establishment.

My wife and I are also trying to do this, and I suspect a big part of why we've been able to stick to it is the growing effective altruism community. We commit to donating 50%, post our income and donations publicly [1], and we know people would hold us accountable if we started backsliding.

Still, 20 years is much longer than I have experience for, so I definitely respect people like you who have been working at this much longer!

[1] http://www.jefftk.com/donations

Yay! Thank you! As someone currently choosing to live very minimally and instead donate as much time as possible to the projects I believe in, I really am grateful to those similarly-minded people like yourselves working from the other end of the lifestyle spectrum :)

  The world got to us, though. You start to notice that 
  the coworkers that dress nicer and go to happy hour get
  promotions. One guy married a social worker and had four
  kids. One guy got tired of living in a studio apartment
  in New Jersey.
But in our industry, with salaries how they are at the moment, you don't have to forego nice clothes and happy hour to donate 20% of your income to charity. I mean, the guy with 4 kids is spending way more than 20% of his salary on them, right? As long as you don't have 4 kids, you just need to keep your discretionary spending under control and demonstrate a reasonable amount of ambition in the workplace.

Now granted, your colleagues might have more expensive houses and nicer cars, but even giving 20% of my income to charity I have a much higher standard of living than my friends who studied less remunerative subjects.

One thing that really helps is getting involved with the growing Effective Altruism movement. There are several effective altruists at Jane Street (where Matt works), as well as meetups in NYC (and most major cities in the USA) and being part of a community makes sticking to those ideals a lot easier.

Also, note that 5% of your income donated to effective charities is still huge, and enough to save many lives during your career.

What meetups are there in NYC? I've been really into this topic for years now, but don't really know anyone else who is. Would be cool to change that.

Here's the main one: http://www.meetup.com/Effective-Altruism-NYC/

The organizer Chris Jenkins is a great guy, you should definitely feel free to sign up and ask him any questions!

The muscles you use for giving are the same muscles you use to save or pay down debt.

Know what your expenses are and how much you are spending. Know which of the things you spend money for are really important to you, and what you wouldn't actually miss that much. Know how to keep your spending in check as your income grows, not just increasing spending because the money is there.

People tend to react emotionally to the teachers of these principles, like Dave Ramsey or Mr. Money Mustache. But it's not personal. It's just math. You can choose to cut way back on your spending if you want to retire really early, if that's what's most important to you. Or you can choose to spend more extravagantly and retire later (or not at all).

Or instead or retiring early, maybe you want to live really frugally but keep earning as much as possible, so you can give as much as possible. The underlying principles are the same.

As someone who constantly struggles with the decision to save VS donate, I don't think the two are interchangeable. They seem interchangeable because most of the time they'll lead to the same endpoint, but I view savings as an insurance that protects me against catastrophic events. They enable me to live a riskier life by providing that cushion and security.

I've decided to donate after I've lived the life I envision. If I get sick or injured and can no longer live that life, my savings will be my charity to myself. The subtle difference is that savings can be turned into charity, but not the other way around.

You are saying it's just as easy to save/donate as it is to spend because the muscles and underlying principles are the same? I wish I'd heard about this sooner.

I was comparing saving to donating, and contrasting with spending. So the exact opposite.

Was I really that unclear?

To me you were. They are nothing alike to me. Different states of mind, different objectives, different strategies.

Donating and saving are two entirely different activities in my life, and the only similarity are the numbers on the ledger. (one has an immediate payoff (donating feels good) while the other is not satisfying at all (just helps me sleep)).

You're advice sounded a lot like the financial version of, "stop eating less and you won't be fat." ... but I guess that does work for some people ...

I did have to read bch's sub-reply to grok the metaphor. I'm not sure why.

No, you were clear.

I sometimes feel that some people on HN make a real effort to misunderstand people.

> The muscles you use for giving are the same muscles you use to save or pay down debt.

Citation needed.

I think all he's saying is that if you get in the habit of living on less $ (because you're giving 20, 30, 40, 50% away to others), if you decide to give it to _yourself_ to paydown debt, or save for retirement, you're already used to living on "50% income", so it may not be as difficult as for soemone who hasn't done this exercise.

Edit: sloppy typing

The motivations are different: paying down my debt enhances my own financial well-being, while donating to charities enhances others'. Or: paying down debt is self-interested, while donating is selfless (or at least self-interested in a different way).

The point is: living on 0.5 * $annual_income requires discipline. If you give 0.5 to charity, good for you. If you put 0.5 to a retirement plan, or apply to some long-term debt that you assume, good for you. Not everybody has the discipline to get $10 and only look at $5 as "available".

The Effective Altruism community is working really hard to combat this. It's definitely a real problem. Jeff Kaufman has written a lot about this, and one argument that stood out to me was making very public commitments to charitable giving. You'll feel more compelled to keep donating if a large part of your public identity hinges upon it.

Do you know how well this actually works for people in practice? My friends, acquaintances, and coworkers know I'm frugal, but I avoid telling them it's because I donate a lot of my money. People can become very defensive and judgmental hearing about people who donate or are otherwise "do-gooders," and I just don't like that kind of attention.

Yeah - it's helpful to make public commitments about charitable giving if, e.g. you have a blog where you have enough space to explain the philosophical underpinnings of your need to publicly broadcast how much money you're giving away. Without that context, it can look like you're bragging about how much money you have.

We spend a lot of time agonizing over how much to tell "normal" people about what we're doing and the cost of being "weird". This isn't so much of a factor if you live in a nice EA hub like Oxford-Boston-San Francisco, but for those of us that don't....we're stuck with the internet.

still you can start out simple and build from that. I give to two charities, Children's Healthcare of Atlanta and St. Vincents. I started out with a good amount per month automatically taken from my account.

I became acclimated to that "bill" much as one does their car payment or home payment. It is in the range of a small car payment per month now and I only chide myself for not boosting it more. The idea is to make it a routine expense so that you don't consider it a burden. The danger is forgetting to raise it or give to other good charities thinking you have done your part.

I do not mind people who do not give, I only mind the ones who speak up at charity drives at work with any number of excuses or complaints. It is not hard to find a charity to give money too, its hard to give

    I became acclimated to that "bill" much as one does their
    car payment or home payment. It is in the range of a small
    car payment per month now and I only chide myself for not
    boosting it more. The idea is to make it a routine expense
    so that you don't consider it a burden. The danger is
    forgetting to raise it or give to other good charities
    thinking you have done your part.
That's a great approach!

    It is not hard to find a charity to give money to.
Charities vary dramatically in how much good they can do with your money, so I'm not sure why you would say it isn't hard. With the charities you support, how much do you know about what your money does? Did you compare them with competing organizations? Getting into this much detail about charities is more than a full time job! At this point I mostly go by GiveWell's recommendations, but identifying really great charities isn't something I'd say is "easy".

(I'm not saying this to discourage you, what you're doing is really good!)

That's a good strategy. Anything you can do to reduce the willpower it takes to give is a good thing.

>It feels like there's a constant friction to overcome--like every choice takes a bit more willpower than it should. I think this is part of the reason that truly counter-cultural people and movements tend to segregate themselves from the rest of the world

You neatly summarized something I have been thinking about lately.

My wife and I are "digital nomads". We work on our laptops while traveling the world. Been at it since late 2011 and we spend a lot of time in places like Thailand where nomads tend to congregate, the vast majority of which cobble together a living through various entrepreneurial ventures rather than traditional employment.

At the moment we are back home visiting family and friends. "Constant friction" is pretty accurate. Not meaning arguments necessarily but constant little cultural differences, differences in how we see the world that can become contentious as ideas about how things should be done inform everything we do.

Meanwhile if you remove yourself to a community of similar people all of those little points of friction go away. Its pleasant if a little group-thinky.

I completely agree. It seems to me that this is a problem of nationalism more than anything. In the United States we give many people many thousands of dollars a year in benefits, most for legitimate reasons. That said, If your end goal was the biggest net cut in human suffering wouldn't you get much bigger bang for your buck in the third world? I make exactly the low end of your range there and yet the government takes nearly 30 percent of my income each paycheck. Wouldn't the solution be for me not to give more(I can't really, my asthma medications wipe me out each month), but for the money I do give(taxes) to be used more effectively?

It would certainly be great if tax money were used more effectively (for whatever value of effectiveness). Causing that to be the case, though, is most likely out of reach for most of us. We can really only look at the best thing that we can do, rather than the best thing that someone else could do. Sometimes the best we can do doesn't involve being able to give to charities in the present.

Matt is a friend of mine, and someone who got career advice from what ultimately became 80,000 Hours, a startup non-profit I cofounded. I'm really happy to see the positive response on here; we've advised a lot of people to 'earn to give' and some people... let's say they aren't that happy about the idea that working in trading can be an ethical career.

Anyone, if anyone feels inspired by the story and thinks they might want to do something similar, I'm always happy to provide advice (you can get my contact details on my website). Not just through finance; there are a ton of software engineers and entrepreneurs in the effective altruism community, and it's really a place where everyone's trying to help each other be more successful - because we'll all do more good that way. If you think you might want to get involved, or find out more, there's a pretty active facebook group where you can introduce yourself. https://www.facebook.com/groups/effective.altruists/?ref=br_...

Happy also to take any questions on here.

Ah, you wrote the piece: http://qz.com/57254/to-save-the-world-dont-get-a-job-at-a-ch...

What did you think of Brook Allen's response: http://qz.com/57807/dont-come-to-wall-street-for-the-money-e...

His point was that the actual making of money might actually cause more harm (fraud, etc) than the good your donations would do. I don't agree; objectively weighing the harm with the benefits is possible, as other comments have pointed out.

I and 80,000 Hours take really seriously the harm you might do through your work. I'd feel very uncomfortable to say the least to recommend that someone work in Big Tobacco in order to earn to give.

I don't think of finance like I think of big tobacco though, and the criticisms I hear of finance tend to fall into one of two camps (i) lumping all of finance into one category; (ii) not really understanding what finance does. There are some areas of finance that are morally dubious (creating ever-more-arcane financial instruments that people don't understand). And I'm sympathetic in general to the idea that a lot of finance is rent-seeking, in which case you want regulation to cut down on that. But you don't have to go into dodgy areas of finance. Matt primarily takes advantage of arbitrage opportunities; it's hard to see how that is fucking over the world.

And even on the Big Tobacco front: if you could go in and substantially change their policies for the better (even if you couldn't make them any way close to perfect), I'd think of that as a really honorable thing to do. The same goes in finance. If you do find yourself in a really dodgy situation, you can always be a whistleblower, and potentially do a lot of good that way.

Ben Todd, Will's co-founder, responded to Brook's response with: https://80000hours.org/2013/07/show-me-the-harm/

I like their estimate #1. For earning to give in finance to be net-negative then finance would have to be causing net harm approximately equal to all the deaths in the world.

Are there any good techniques for a programmer/small business owner to be able to deduct charitable contributions more than 50% of one's adjusted gross income?

> From http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organi... Generally, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases.

Looking at http://www.irs.gov/publications/p542/ar02.html I see:

    Cash contributions:  A corporation must maintain a record
    of any contribution of cash, check, or other monetary
    contribution, regardless of the amount. The record can be
    a bank record, receipt, letter, or other written
    communication from the donee indicating the name of the
    organization, the date of the contribution, and the amount
    of the contribution. Keep the record of the contribution
    with the other corporate records. Do not attach the records
    to the corporation's return. For more information on cash
    contributions, see Publication 526.
So it looks like your small business could make the donation, which would then not be taxed. But I don't really know, you probably should ask a tax lawyer.

To make things easy, use a donor-advised fund to meet your 50% of AGI. Thereafter, use retirement accounts. If you are a small business owner, check out SEP-IRAs.

"... let's say they aren't that happy about the idea that working in trading can be an ethical career."

Well, it's at least worth having a discussion about.

If you are in a career where you honestly think damage is being done by your activities, you need to weigh that against whatever good is being done with the money you earn and give away.

What about the traders involved in the near-collapse of the global economy in 2007-2008? It would take a lot of very effective giving to make up for the damage caused.

From http://effective-altruism.com/ea/54/show_me_the_harm/:

"Finance is often taken to be the legal high earning career that’s most harmful to society. The average Goldman Sachs employee earns around $500,000 per year. If someone joined Goldman and donated half of his earnings to Against Malaria Foundation, that would be about enough to save 100 lives per year (or more accurately, saving 4000 QALYs), plus likely have substantial positive flow-through effects. For Earning to Give at Goldman to be net harmful, the marginal employee would need to be causing the death of a hundred people each year. This would mean that Goldman Sachs employees are several orders of magnitude more deadly than American service people in Iraq.

Goldman has 32,000 employees. An upper bound for the harm caused by the marginal employee is thus the total harm caused divided by 32,000. For the harm to outweigh the good, Goldman would therefore have to be killing at least 3.2 million young people each year, or doing something else that is similarly harmful. That would mean that Goldman Sachs would need to be responsible for around 5% of all deaths in the world. Bear in mind that Goldman Sachs only makes up 22% of American investment banking, and 3% of the American financial industry - if the rest of finance is similarly bad, then it would imply that finance is doing something as bad as causing all the deaths in the world."

> The average Goldman Sachs employee earns around $500,000 per year. If someone joined Goldman

... then they wouldn't be earning $500,000. That figure is averaged out between a few people who make multi-millions and the masses on more ordinary numbers.

> The average Goldman Sachs employee earns around $500,000 per year. If someone joined Goldman

They probably wouldn't be making the average salary of a Goldman Sachs employee, which is probably the arithmetic mean of salary of all current employees, and not the median or mode of new hires.

This is a false equivalence. Even assuming Goldman Sachs causes ongoing significant financial damage (something I'm not convinced of), you can't compare that directly to saving lives with an equivalent amount of money. Apples and oranges.

Actually, that is the entire purpose of the Quality Adjusted Life Year (QALY). Keep in mind, no one is really intrinsically concerned with the economy as an abstract concept. The things that we really care about are how this complex system affects real humans, and once we're talking about a change in quality of life for humans, we can compare them to saving lives via the QALY. It's the sort of process that's more statistical in nature, but you can get an idea whether you're doing more harm than good. The point above is that a back of the napkin calculation indicates that it is rather unlikely that someone working at Goldman Sachs is causing more harm than good if they donate half their income.

So if you killed the Goldman Sachs employee, stole $2 million of their savings, and donated half of that to Against Malaria Foundation, then you'd have saved a net 399 lives, and you'd be $1 million richer. Everyone's a winner!

I get the feeling that this particular accounting methodology is not used to justify actions against wealthy people.

There are a number of thought experiments along these lines that philosophers go back and forth on. The general consensus as far as what should be applied to society is that defensive rights trump utilitarian calculus, even when the calculus seems to come out in favor of violating those rights (in this case the employees right to life and property). Different people justify this in different ways.

> I get the feeling that this particular accounting methodology is not used to justify actions against wealthy people.

Keeping in mind that I would not use this methodology to justify violence or theft against anyone, I'm interested in knowing what actions you think I'm justifying against not-wealthy people that I should be applying to wealthy people as well.

The post above said, "to be net harmful, the marginal employee would need to be causing the death of a hundred people each year" and you accepted this as a "back of the napkin calculation". So it certainly appeared as though you were justifying violence, as long as you could pay the wergild (outsourced to Africa, as it's cheaper).

If violence isn't justified by this, and neither is theft, then I've no idea what actions it does justify. Why don't you tell me?

That is a very good point, and it made me realize that I was automatically translating the original statement to something other than what the literal words say. My internal translation of the statement that you quote would be "to be net harmful, the marginal employee would need to be causing [an equivalent level of harm expressed in QALYs as killing 100 people] per year", which is different in a subtle way. Specifically, it is possible to cause negative quality without committing a crime. So, someone could argue that the financial industry as a whole (and Goldman Sachs specifically) redistribute assets in such a way as to cause a net lowering in quality of life across all affected without committing any specific crimes in the process. I don't know enough to say whether this is the case, but it doesn't seem obviously wrong to me (that they cause some harm, not that they cause 100 deaths per year per employee level of harm. That seems way too high).

If someone were to use the original statement to say that it would be ok for the employee to kill 50 people and then save 100 in Africa, I would be against that, even if it were necessary to kill the 50 in order to raise the money to save the 100.

Does that help clarify?

It does. Though I'm not convinced that it's particularly useful to have such a concept as "an equivalent level of harm expressed in QALYs as killing 100 people" when it's not really that at all.

It still suggests that, something like a 70% retroactive tax on bonuses over $10,000 going back 5 years, would be a net good if the money was spent improving people's lives. Yet I think most people would find such a proposal objectionable, despite its legality.

Retroactive taxes are not legal.

> "it would imply that finance is doing something as bad as causing all the deaths in the world"

It's within the realm of possibility methinks.

One of the arguments regarding this is that employment in the sort of higher level careers we're talking about is fairly inelastic, so if you don't take the job then it will go to the next best candidate who applied. The impact is less about the total damage/good done by your position than it is about the difference between you and the next person in line (or basically the average person in that industry). If you're the sort of person who is concerned with maximizing impact in this way you'll probably do at least a bit better on the margin, and any money that you earn to donate is pure benefit since that wouldn't have happened otherwise.

You lend somebody to buy a house, you end up losing your shirt and your job, and they end up going bankrupt...there are a lot of people who should have known better or were downright criminal in the crisis, but most of the actors just didn't know any better...It's hard to do good in your work and it's hard to do good by giving, more power to those who try...Thoreau has some interesting words...

"There are a thousand hacking at the branches of evil to one that is striking at the root, and it may be that he who bestows the largest amount of time and money on the needy is doing the most by his mode of life to produce that misery which he strives in vain to relieve....

As for Doing-good, that is one of the professions which are full. Moreover, I have tried it fairly, and, strange as it may seem, am satisfied that it does not agree with my constitution...But I would not stand between any man and his genius; and to him who does this work, which I decline, with his whole heart and soul and life, I would say, Persevere, even if the world call it doing evil, as it is most likely they will."

I agree it's important to think about; and that morally you can't just take benefits - harms = net good. It's reasonable at least to be more morally concerned about avoiding harm than about doing good. That said, I've never heard a plausible story about how someone like Matt is causing harm in his career (unlike he might be doing if he worked for tobacco companies, for example).

> If you are in a career where you honestly think damage is being done by your activities, you need to weigh that against whatever good is being done with the money you earn and give away.

Or, better, change job.

From the article:

> First, where do we draw the line? If we’re prepared to donate one-third of our incomes to maximize happiness, then why not two-thirds? Why not live in a tent in a park so as to be able to donate 99 percent and prevent even more cases of blindness?

This is an area where the writings of Scott Alexander (Slate Star Codex) have been really helpful for me. He refers to this as "Infinite Debt" (http://slatestarcodex.com/2014/05/10/infinite-debt/):

"For years, I felt like I was probably ethically obligated to give all my income to charity, minus whatever I needed to survive. And the fact that I obviously wasn’t going to do that made me not give anything at all.

Once someone told me that my obligation wasn’t infinite, but just some finite amount like ten percent per year, every year, I was thrilled to be able to comply.

And of course there are people who make fun of this. “Oh, you really think you can just give an amount you find “convenient”, then feel like your conscience is clear and you can stop caring and be smug and self-satisfied?”

The proper response to this person is to ask whether they give so much as ten percent.

(“What? No, why should I?! I do my part by yelling at you!”)"

The problem with that is that it only works if you believe that 10% makes sense. For me it doesn't - it is either 0% or whatever several 100% of my current income it would take to do my part (I don't see how not currently earning enough to repay would be enough to get me of the hook, certainly car payments are not payed in percentage of income).

Thus, for me, the only answer that makes sense is that we have no obligation to save the world, but we are allowed to donate whatever we want. Besides who says all lives have equal value?

Actually, the 10% isn't intended to be the Objectively Correct Amount To Donate. If someone accepts any obligation to help their fellow humans, then the conclusion is that they have an (effectively) infinite obligation. However, people operating as if they have an infinite obligation tend to find a way to reject that, or simply shut down and ignore the problem. Thus, picking a lower percentage than 100 that can be endorsed can result in better outcomes than the alternative, and 10% is a nice round Schelling point. It sounds as if you reject the notion that you have an obligation to help other people, which I find interesting. Would you be willing to explain your thoughts on this?

I reject any obligation to help any random person. I tried to explain my thinking earlier, basically if you have an infinite debt then you don't have any right over your own life. I firmly reject that notion. The only other objectively correct notion is that you have zero debt, as you said 10% is merely a Schelling point. 1% would do as well, so would 5% or 15%.

Does that make sense?

I am willing to help friends, family, etc because I actually care about them, ie making them happy will make me happy.

I am also willing to save the child in this case, because it is a) close b) not especially burdensome and c) will provide me with some measure of happiness. It is a choice I freely make, not a moral obligation (if it was an adult I really hated I might not have rescued him).

It does make sense, thank you for explaining again. I am curious about what meta-ethical system you find to be most compelling. I myself am somewhere within the Consequentialist camp.

The others numbers are also potential Schelling points, but I would argue that 10 is a better one, largely because it matches the Christian Tithe, which western culture is largely familiar with.

In practice, I do find myself with a tiered system of "obligations" (I would also be interested in breaking down this word with you to see if we are using it in the same way, but you may not have either the interest or time, which would be fine). So, loved ones will receive a higher level of help than I give to strangers, which is probably true of most people.

For me, the Objectively Correct Amount To Donate is the maximum I can deduct. I think this is 33% of gross, but someone elsewhere said it may be up to 50%. I'd go research it, but right now I'm working on achieving that 33$ this year--I'm not hitting 50% unless I bump up my income a good bit.

But it's an objective measure externally set for me that is neither 0% or 100% (less the minimum needed to live), so I find it quite helpful.

(I think taxes are great and I think we should all pay more to fund education, research, health care, and social safety nets, but right now a good portion of it goes to arresting people for drug use, killing people in the Middle East, breaking the Internet, and other things I really dislike.)

33% is way more than most people donate, so congratulations!

I would nitpick that the maximum amount you can deduct is set by the government, and thus somewhat arbitrary, and certainly not Morally Objective. However, it is objective to you, the individual, and thus makes a very good Schelling point, and you are finding it helpful, so excellent, good for you.

I also largely agree with your statement regarding taxes, and have nothing to add to it at this time.

> Thus, for me, the only answer that makes sense is that we have no obligation to save the world, but we are allowed to donate whatever we want.

That's the status quo. The whole reason we're having this conversation is because not enough people are donating X% in order to fix global poverty. So, what's your burden? What's my burden? 10% is a handy figure because it's small enough to be doable for most people, but large enough such that if everyone were donating 10%, we'd have enough money to basically fix global poverty forever.

It's handy for us to agree to discharge our infinite debts to each other by agreeing upon some figure. 10% fits that nicely.

That would be handy, granted. However having looked your argument over I don't think it ads up. Thus I maintain that my burden is 0%, so if you want to fix global poverty you will have to do it without my donations.

The real problem isn't that we are not giving enough to Africa, the problem is that we don't buy enough from Africa.

If you try to solve that problem instead the Africans will be much better of, you won't have to worry about convincing me, and you can make yourself rich in the process.

> However having looked your argument over I don't think it ads up. Thus I maintain that my burden is 0%, so if you want to fix global poverty you will have to do it without my donations.

Can you explain your reasoning? If you don't think you have any burden, then naturally the whole point of relinquishing the infinite debt and the 10% Schelling Point won't have any relevance. But in your original comment, you seemed to imply that there was some amount we are on the hook for, you just couldn't understand why we settled on 10%. But if I am misunderstanding, please correct me.

For those interested, one way to build this charitable muscle and lifestyle is to start a charitable trust (at least in the US). It's not just for the ultra wealthy. You can start any old investment account and commit to funding it regularly say $20/month or 1% of your salary to start. Then when you hit $5k or more you can transfer those funds to a trust you create with say Fidelity or Vanguard ($25k minimum). You can then disburse these funds from the trust to the charitable org of your choice.

The nice thing about this option is you can save now without having to decide where to give. You can take time to research and make an educated informed decision on where to give. You also get the dual tax benefit of not getting taxed on these capital gains and the deduction of a donation if you itemize.

It's very cool to see people giving critical thought on how they give. But sometimes it can be intimidating to start. Just starting with anything is better than nothing and you can build from there. You don't have to give 50% like this guy. Building it into your lifestyle and budgeting is a slow and gradual process.

I'm interested in this approach - is there any charge to create the trust? Also, I wish the minimum for Vanguard was lower - I already have an investment account with them, and this seems like a great way to get started.

The fee is a percentage of your assets: https://www.vanguardcharitable.org/individuals/fees_and_expe...

It starts at .6% per year, and decreases when the account size is huge.

Shouldn't be - I think it's just the same as most investment accounts in that there is a small management fee that takes a percentage cut. In this way Vanguard is the best as it has the lowest rates I know of for the casual investor, but the minimum is certainly high.

This is interesting. I created a scholarship that i direct for graduates of my high school and the way it works now is i cut a check to the school who cuts checks to the students. I'd rather have a trust i can write checks directly to the students from and more importantly i'd feel a lot more comfortable about doing a fund raiser or something to make the scholarships bigger (my ultimate goal is a full ride, might not get there alone)

However when I looked in to this it didn't seem so clear cut.

This may be an unpopular opinion, but I've always felt it selfish when people of means partake in 'aid trips' over sending money to an appropriate organization. If you care to help, leverage your abilities efficiently; make the money doing what you're best at, and let others administer the aid.

I used to agree with this view, until I participated in an aid trip in college. When I personally saw what extreme poverty was, it changed the course of my life and future career decisions. So, the $1000 plane ticket and 10 days in a rural, high-need area allowed me to look outside the bubble of American extravagance I had grown up in.

It is one thing to rationally know that people are without food and basic medicine through the reading I did or videos I watched. It is another to be in a high-need community and find myself trying to explain to a father that I just ran out of the antibiotics he needed to help his sick child fight an infection. Of course it would have been more effective to not buy the plane ticket and ship $1000 more of antibiotics to the community, but that is the cost we (myself and the community) paid to change a lifetime of decisions I would make as a privileged American. The cost sickens me, but it is the reality I have come to understand.

Emotional connections are powerful, but they are difficult to form without the personal connection. My hope is that as technology improves, we will be able to build empathy more effectively even without the aforementioned expensive plane ticket. Perhaps then we will be more hesitant about war and more vigorous in helping refugees, victims of natural disasters, and others.

It's about recognizing that you aren't a perfectly rational person, and then taking steps to maximize your altruism in ways that may not have been strictly optimal if you hadn't taken that into account. If seeing poverty firsthand is going to give you the motivation to do something about it when you return, then that's the action you should take, as long as you're being honest with yourself.

That's an interesting perspective, and I'd be interested in seeing whether people who go on these sorts of trips end up giving more on average to charity across their lives than people who don't. If so, then the trips could be worth encouraging as a societal norm, not for the good that they do directly, but for the impact that they have on later donations. If the trips don't have much of an impact, then it would be better to discourage people from doing this, and societally encourage donations instead.

There's even a name for that: voluntourism.

"Voluntourism is ultimately about the fulfillment of the volunteers themselves, not necessarily what they bring to the communities they visit." [1]

“Basically, we failed at the sole purpose of our being there. It would have been more cost effective, stimulative of the local economy, and efficient for the orphanage to take our money and hire locals to do the work, but there we were trying to build straight walls without a level.” [2]

[1] http://www.psmag.com/business-economics/instagrammingafrica-...

[2] http://www.independent.co.uk/travel/news-and-advice/voluntou...

Since he's in the financial business, I'm wondering why he isn't leveraging the effect of "money makes more money" before donating. Isn't it better to invest that money first, before donating it?

Take for example Bill Gates. If he had donated all his "surplus" money instead of building a business, he wouldn't have been able to donate the amount that he has; the amount wouldn't even be of the same order.

This is a really tricky issue; there are lots of competing considerations either way. (e.g. the return you get from your money; but your donated money also generates a 'social return', which can be much higher than what you get in a bank. And you'll learn more about how to do good later on; but the world is also getting richer so there might be fewer outstanding opportunities in the future. Etc etc.) There's a summary of blogposts on the topic here: http://www.effective-altruism.com/ea/4e/giving_now_vs_later_...

There's the obvious counter-argument about not being able to guarantee that investments will increase in value, but I think the more compelling one is that it's an especially useful time to be donating. According to the UN:

> in 2011, 17 percent of people in the developing world lived at or below $1.25 a day. That’s down from 43 percent in 1990.

It seems worth pushing to nearly-eradicate this "extreme poverty" now, rather than waiting another 20 years and doing something that would likely have a lesser effect on suffering.

Factor in the time-value of money, and the risk of investments. Is $100 going to be more useful to the EFF to stop bad law now, or is $200 in a couple years when they have to try to repeal bad law?

Is saving two lives in eight years worth more than saving one life today?

That's certainly a logical opinion, and I agree that efficiency is key. However, I think it's also important to keep in mind the personal value of traveling on aid trips, which allow for an improved understanding of the need that lies. Perhaps this encourages potential donors to increase the frequency and quantity of their contributions.

I'd liken it to the classic criticism: "charities spend too much money on advertising!"

But how do charities get donations without advertising? How do they let people know why they need the money and encourage them to donate? At some point, yes, a charity can spend too much of its donations on advertising, but advertising in general is a necessary evil.

Same with this. The charities might take in less overall if they "saved" money by scrapping these types of programs.

Lots of charities are entirely advertising and exist entirely so that the charity can keep on employing the people it employs.

This isn't 100% useless, as it causes economic activity, but it's done under the lie that non-profits are de facto good things.

This is the challenging thing about charities. If I want to evaluate the person selling me socks or smart phones, I look at the good they offer and decide if it is worth $N. If it is, I make the trade. If not, I don't.

But with charities, you have to figure out "is the marginal change the charity will do with $5 worth me having five dollars less?" And that's incredibly hard to figure out. Even the charity itself, assuming it even wants to know, can have a hard time figuring out the net difference of five dollars.

Which is the whole point of effective altruism.

It is also similar to the criticism of CEO pay for nonprofits. If the CEO brings in additional donations and furthers the organization's mission, why wouldn't they have pay competitive to a for-profit org? Why should you be paid less to do good than evil?

or non-good, marginal good, regular doings, etc.

One can criticizing people for taking the trips isn't the same as criticizing charities for offering them.

I suppose that is fair. But since I don't donate 1/1000th of what these people do even with the trip, I don't really think my grandstanding on how they spend their own money would really be justified.

I will say that I took a holiday last year, and technically that is money I could have used to donate. So in that sense I am just as bad as they are.

why not? it takes two to tango.

Also, it maybe efficient in turning dollars to aid, but nobody at the "rich trader bar" wants to hear a story about someone donating money... that's just a way to reduce taxable income. An engaging personal story about travel and experiences is much more likely to have an impact on others.

From a purely financial, self-interested standpoint, how does a donation to charity which reduces taxable income actually help a person? If I reduce my income by $100, it's true I won't have to give the fraction of that to the government that I might have, but now rather than being out a fraction to the government, I'm out the entirety to the charity.

Even in the case where the donation drop the payer to a lower tax bracket, I don't see how it helps. Any insight greatly appreciated.

What I find most amazing is when bright Ivy League graduates go and do manual labour, like building a school, in a poor country with massive unemployment. It's not exactly playing to comparative advantage.

That's pretty much how they become brighter. These kinds of hands-on experience are far more transformative and contribute to higher efficiency than if they were to simply donate more money.

I agree volunteering abroad can be a great way to experience first-hand some of the problems in the world, which can lead you to do much more in your life than you would otherwise. I did it as a student and it was important in my life. But that's to say it should be a means to having a real impact later on, rather than an end in itself.

At least they could acknowledge that they're going abroad to help themselves, rather than the beneficiaries of their "charity."

Nothing is altruistic.

I'm not sure why you're picking on these guys in particular.

I'm not "picking on" anyone. I'm just reflecting that it would be refreshing if the subjects of this discussion would express some self-awareness. It's hardly surprising that they aren't.

I've found that most people who help others readily admit that they do it because it makes them feel good.

Maybe my anecdote goes against the norm?

Human beings are not absolutely focused, money-seeking, rational economic actors.

Thank the heavens for that.

You certainly could have chosen a path in life where you made a lot of money then donated it more efficiently. I know lots of developers who put hours into whatever games they enjoy. Leveling up that WoW character to level 70.

Most of us could be doing a lot more.

I am not sure it is an unpopular opinion, but if they had instead spent the money on e.g a sports car wouldn't that have been more selfish?

It is less selfish that not helping at all. To criticize those who help inefficiently more than those who don't help at all enforces the notion that it is better to not help at all.

I don't think of it as a criticism, moreso as an opportunity that people may not have fully considered. If you ask most people who do give to charity why they do it they'll usually say that they want to make a difference or alleviate suffering. As long as they aren't overly set in their ways they should be happy to hear about more effective giving opportunities, or maybe even to consider the entire question in a new framework that helps them better accomplish their stated goals.

I had a hiking friend who used to charter jets, collect farm equipment and food, and fly into areas of the world that he thought needed aid. My friend died two years ago in a car accident so I can't ask him, but I think he did that to be more efficient.

But then maybe wanting someone else to use their money efficiently is selfish of us when they might rather develop as people by observing and empathizing with the struggles of others.

If observing and empathizing are the goals of the trip, and everyone is clear about that, then all is fine and good. However, these sorts of trips are generally understood to have the goal of helping people directly, which they are not actually good at. Anecdotally, I find that these sorts of stories generally go "we helped them so much" rather than "I learned so much and will now donate more than I would have otherwise".

> If observing and empathizing are the goals of the trip, and everyone is clear about that, then all is fine and good.

Why does it have to be so explicit? My observations align with yours in regards to how these trips are marketed (if I can use the term) and how most people I know who have done them describe the experience. But I have another anecdote, one which describes why I don't want to hold my speculations or "understanding of the world" in too high esteem:

I know at least one person who was so sheltered that the big realizations on her trip (a "mission" trip as it were so) were that: not all children are born in fancy suites with a host of doctors tending to every need; you can't get processed American lunches out in the middle of the desert; "kids are literally hungry because they don't have enough food". Hearing this was equal parts astonishing and enraging and yet it made me check my own entitlement as well. Why should I want to attack her motivations? Why should I challenge her because the "result" wasn't "good enough", i.e. she didn't suddenly become enlightened as to what it was like to live in such a situation, instead she merely realized that she had a desire to care about the issue and support others who care as well (see: cash donations)? Any minute I could have said obviously, there are people in terrible situations all over the world and it would have done nothing because I already thought it. There will always be "those kinds" of people; we don't want to be them, but they also don't want to be us. The truth is that even if her interests end up being entirely selfish, she'll probably have more of an impact on those things than I ever will. I can appreciate that, even if it's not efficient, altruistic, or whatever. It's frustrating, but not terrible.

One thing that was pointed out to me once was that a normal person on a vacation will spend more money in the local economy than they would otherwise donate.

Spending $500 on a plane ticket and then spend $500 at local restaurants, vendors, and accommodations won't do as much good as the $1000 would straight-up donated, but it's better than the $100 I would _actually_ donate. Don't make perfect the enemy of good.

And ultimately, it will make me care more about wherever I visited, and prompt further donations in the future.

You may find it selfish but I don't see why they shouldn't go to verify that the money their spending is being used appropriately.

Empirically speaking, aid is almost completely useless[0], no matter who administers it. So whether he gives it all to the "appropriate organization" or "wastes" some of it on an aid trip is ultimately irrelevant.

[0] Easterly's book is great if you're interested in the stats: http://www.amazon.com/The-Elusive-Quest-Growth-Misadventures...

That's not true. There are hundreds of thousands of different aid project, it would be miraculous if all were entirely ineffective. E.g. you'd have to be crazily skeptical to suggest that the programs recommended by GiveWell aren't of positive expected value; there's just so much evidence to the contrary. In terms of the link between aid and economic growth - aid is just such a small part of developing countries' economies that you simply can't peer through the statistical fog; it's such a weak signal, and there are so few data points ,that it's not surprising that we can't detect a correlation. A nice even handed discussion is given by Owen Barder of the Centre for Global Development: http://cf.owen.org/wp-content/uploads/Can-Aid-Work-Owen-Bard...

>E.g. you'd have to be crazily skeptical to suggest that the programs recommended by GiveWell aren't of positive expected value;

Their top charity for a long time was a mosquito net distribution agency. It turned out that the mosquito nets were used as fishing nets instead and, since they were treated with insecticide, polluted the local lakes.

It turns out that the nets in question came from net distributors with shoddy follow-up practices; GiveWell suggested Against Malaria instead of other distributors in part because they saw this issue years ago.

http://blog.givewell.org/2015/02/05/putting-the-problem-of-b... https://www.againstmalaria.com/NewsItem.aspx?newsitem=Net-us...

Great find.

To me there are two issues at stake: taking their 90% claim at face value that may very well still leave them a very effective charity.

I am more concerned for the fishing stock. Assume 5% chooses to use their nets to fish with - is the this enough to have a material impact on fishing stocks? Will this effect the community to the point that the rest also have to use these nets to catch enough fish? Even if not, what is the effect of the insecticide?

Your articles seem to be really convincing with usages rate, but unfortunately rather handwavingly with the insecticide.

Function of aid is not to cause economic growth. Function of aid is to have a child not die of malaria.

The ciriticism is that malaria is just a symptom of the larger problem of a lack of economic growth and development. Aid can save a child from malaria, but it will never solve the underlying problem.

Reducing or eradicating these diseases removes a huge burden from those in extreme poverty, it definitely is among the underlying problems that contribute to a lack of growth. It's also the most tractable.


Obviously there was a lot more to the Civil Rights movement than a lack of malaria. But it was one of the factors that helped. How likely is someone with “body aches, headache and nausea, general weakness, and prostration” to make it to the polls, to school, or to work? How likely are they to march on Washington?

It's easier to dream big from behind a windowscreen. Easier when you're not hungry. When you're not sick. When you're not weakened from parasites and malnutrition. And for those of us who would love to see systemic change, the "one-trick ponies" may be a good way forward. """


Having children not die of malaria causes economic growth. And economic growth causes children not to die of malaria. So either way they're connected...

Easterly's book is about aid mostly from western governments to developing country governments to encourage growth. That I can believe doesn't work very well and can end in rent seeking and corruption.

Giving $3.5k to save a child from dying of malaria is quite a different thing and seems obviously a good thing to do.

As an introduction, here's an episode of Econtalk with the author: http://www.econtalk.org/archives/2008/02/easterly_on_gro.htm...

Dead Aid is also a great book on why Aid to Africa is usually in vain.


I agree with this view.

Here's the view of the trader's professor (Peter Singer) on being ethical with one's money (in the first few minutes he gives his famous example of a child drowning). https://youtube.com/watch?v=dBvsZVlcXR4 (7 min)

This 14 min lecture goes through Singer's example, and it explores his view further. https://youtube.com/watch?v=Pyzv2UWzaos

thats an interesting video. Gave me a lot of food for thought.


10% of income is doable.

I treat it like a form of tax in which I have a say. It's going to be taken (that's the way in which I think of it as a tax), but now I get to say who receives it.

Last year I favoured Medicine San Frontiers due to the Ebola outbreak, but in general I favour Liberty, Open Rights Group and small charities that provide computers to Africa, or bicycles for the disabled in the UK (Wheels for Wellbeing).

10% really isn't too much, and so long as you do it early you'll likely never notice it.

Then again... perhaps this is why I don't have a deposit for a mortgage. Or perhaps that was poor budgeting for the bit of salary I did take home and keep.

The money he earns has to come from somewhere - what benefits a hedge fund is not likely to benefit the 'disposable populations' [for lack of a better term] that one of the fund's traders is supporting. In other words, if your hedge fund makes money by betting against the 3rd World, then half of your salary is only going to go so far for karmic rebalancing.

> if your hedge fund makes money by betting against the 3rd World

What makes you think that's how they make their money?

If he chose a lower paying, more noble job, would the hedge fund leave his position unfilled?

> Singer himself donates about one-third of his income to charity, he says, and I admire his commitment. Still, I wonder... where do we draw the line?

Peter Singer himself wrote, in the New York Times Magazine, nearly a decade ago, an article titled "What Should a Billionaire Give – and What Should You?"

[1]: http://www.nytimes.com/2006/12/17/magazine/17charity.t.html?...

I am not sure if this is really "effective altruism". When I decided to leave a high paying job to start an education startup in order to pursue my passion to make a change through education, I got similar advice. I was told it would be more "effective" to keep my job and donate the money to education related charities instead. But I realized that as an software engineer, my skills could prove much more impactful, and directly so than the relatively meagre money I could donate. As they say money is cheap. I felt, and I still feel I could amplify my impact by using my skills rather than just throwing money at the problem.

Second, I wanted to be more aware and involved in the issues I wanted to contribute to, which I couldn't do unless I dove in. There are a lot of good organization out there that are making great impact, but there are equal number of "bad" ones that are perhaps having a negative impact or are not aligned to ones values. GiveWell and CharityNavigator can only go so far.

I think both you and the article are in-line with effective altruism (the movement). The crux of EA is objectively and dispassionately deciding what causes do the most good with your scarce resources (time & money) and deciding how to best support them. Reasonable people will disagree on whether working in the industry or donating profits from a higher-paying industry will work better for you. Education isn't a popular EA cause but whether it is or isn't optimal depends on the change you think your start-up will have contrasted against what impact you could have elsewhere.

Check out https://80000hours.org for a way more in-depth exploration of the different career-related EA strategies.

The relative impact of your money vs your time depends in part on your income, you skill-set, and the causes you would choose.

A person with a high income but few relevant skills would probably have the greatest impact by donating money. For example, a trader interested in preventing disease might not have any skills in developing or delivering vaccines. But that trader might have a substantial amount of money to donate to organizations that do have those skills.

On the other hand, a software engineer with a modest income might find a very effective nonprofit that could do much more if only it had access to software development talent. For that engineer, donating time might achieve much more than donating money.

This article has a few links but REALLY is lacking this one:

http://en.wikipedia.org/wiki/Giving_What_We_Can https://www.givingwhatwecan.org/

And interesting bunch of people where you pledge to donate X% of your pre-tax income to charity for life. The founder, Toby Ord capped his income to 18,000 British Pounds:


I'm ashamed to say I donate $0. It's the right thing to do, it's altruistic and I respect the people that do it; but I can't bring myself to care more about the rest of the world then I care about myself/my family. Am i the norm or the minority?

You and your family live in the rest of the world. It's not just altruistic, it's also rational for your own self interests. It's not mutually exclusive: That's a false dichotomy.

If you can't care about your community enough to donate something, then I think your values may need reexamining. Even if that something is donation of old clothes and used items instead of throwing everything away.

And finally, it's not about how many people donate and how many don't. It's the right thing to do, and asking if you're "the norm" is just looking for a justification. Do the right thing. Don't just be narrowly selfish.

Logic doesn't apply in this case. If I donate money I am acting against logic.

My self interest benefits more if I use the money for myself rather then giving it away and getting the benefits in a form that is heavily diluted. It is the aggregate donations of people that can, in the end mutually benefit my self interest. However my individual donation is just a drop in the bucket; I stand to benefit the most by not donating and letting others donate. Thus, the logical move is to not donate. It is actually counter intuitively detrimental to my self interest if everyone acted this way. Garrett Hardin described the paradox in his famous paper:


This does not mean I think it's ok not to donate. A large part of our lives as humans are not dictated by logic. What I meant in the original post is that from an emotional standpoint I just don't feel a heavy burden that I need to donate. $20000 that could be a donation I'd rather spend on a worthless luxury (i.e. new car) for me... and that's not logic talking either, it's just my gut, emotional desire.

You said it yourself, "worthless luxury" is worthless. Your emotional desire once met will be only be temporary before you desire the next thing. It's an endless consumption cycle which will leave you feeling empty inside but with a garage full of junk. Donating to noble causes would have you the reverse of that.

"Mr. Wage" is a lovely example of an aptronym: http://en.wikipedia.org/wiki/Aptronym

Not to be a downer, but it's pronounced "wah-GEE", with a hard G.

source: used to work a few desks down from Matt.

Wow, now there's a guy guaranteed to have his name mispronounced 99% of the time (well, at least by people who have never heard it spoken). [ edited for typo ]

I know; his brother actually just gave up and started introducing himself as "Wage" (pronounced as you'd think) rather than "WAG-ee"

Right now I don't give a large amount to charity past Kiva loans (I try to average $25 every month or two) and a handful of causes online (sub $500/yr) on an as-needed basis. I'm trying to be as aggressive as possible paying off my debt (my debt payoff is a little over 30% of what I take home monthly and I plan on using the "snowball method" so that number will not change as I pay off debt to accelerate the payoff) because it doesn't seem smart to give away money when that puts me on the hook for more money (interest). If there is an error in this logic I would greatly appreciate it being pointed out to me.

I'd be interested in increasing my charitable contributions but I'm not sure where would be best to send more money to. I am personally a fan of direct charity instead of going through an organization as I feel it reduces overhead. I like Kiva loans because once I get paid back I just re-loan the money so that slowly I am increasing the amount I loan monthly while keeping my monthly contribution the exact same (or slowly increasing it, I want to get to $50/mo within a few months). I also like Kiva because I know exactly how much is going to Kiva vs the person asking for money (something that is hidden or hard to find out for most charities IMHO).

My approach is not based on anything specific it's more of just what has happened naturally since I started working full time.

How many here are pursuing a similar goal? Donating 5%, 10%, even 50% of their pre-tax income? I love the effective altruist movement - it's pretty much what I spend most of my time thinking and reading about - but this is a very touchy subject to discuss casually so I've never met people in real life (or in my industry) who are also into this.

My own goal is to give about 50% of lifetime earnings, though with the flexibility to scale that back to a floor of 20% in the event my income drops a lot (I'm at the mercy of tech salaries, and just not willing to jump to a career that destroys my work-life balance).

The tech industry is known for having a disproportionate amount of effective altruists, given how pragmatic and numerical the conclusion to donate to the most effective charities is.

I'm doing 1/3rd of gross, though it's not really very much since I'm still a student and I only work summer internships. Once I graduate I'm planning on setting a cap based on the cost of living wherever I end up, and donating everything above that.

That's great! (I'm guessing I probably know you, but can't tell who you are). I'm hoping to donate >50% too; I've been donating about 10% but I've been on a low salary; next year I'll be able to do 50% I think.

Not sure if you'll see this, but this thread inspired me to send an email to 80K, which I've known about for a while. I'm planning to become a 50+% donator in the next couple of years.

> Sure enough, he says that in 2013 he donated more than $100,000, roughly half his pretax income.

This is pretty impressive to me. Many will say "well, if half of it is 100k, he still has at least 100k", except this is pretax, meaning he keeps less than 100k; besides, before saying it's not a big deal, how much are you contributing?

I personally donate 40% of my post tax income anonymously to various initiatives/organizations, which means even less pretax, but that's what I can afford without jeopardizing my family's well being.

It doesn't have to be monetary, but a little bit of help goes a long way. I'm glad there are people who do whatever they can to help out with the less fortunate.

If only our government taxed people appropriately and had a system for foreign aid that was well studied and effective. Is whats proposed in this article as effective or better than the alternative? I have no idea but it certainly seems less organized.

It probably does lose out on some coordination efficiency that a hypothetical world government could achieve, but in today's world governments have a mandate to care for their own citizens before others, which means that first world governments miss out on the incredibly cheap interventions in the developing world. For example, the NHS in Britain will spend as much as £30,000 to provide a QALY (Quality Adjusted Life Year), when a similar year of life in the developing world can be provided for £50 at a conservative estimate.

I think that this is great!

Here's an idea, and one that may already be implemented (please tell me if you know that it is and who is doing it): One could set up a charitable nonprofit that uses HFT systems to maximize the growth of donated assets before sending them off to other charitable organizations. Investors would be able to influence where the money is donated at the end of the day. In a sense, use the "easy money" from wall street to back altruistic endeavors.

The problem that I see with this is the easy chance for corruption and graft; however, given a clear altruistic management philosophy, a truly dedicated group of people could run a tight ship and make a difference for people in need.


Those HFT traders profit from the clumsier pension funds and other similar funds. e.g. algorithm detecting a broker, on behalf of a fund, is buying some stock with one batch per hour, so front run them. They are profiting from teachers and the elderly. I suppose at the end of the day half of the resources lost to those two groups are given to the even more worse off, albeit giving charity administrators a cut.

Fund managers also employ dealers who very much do not buy stock one batch an hour so as to allow HFTs to profit from them. They have a fiduciary duty to their clients to aim for best execution, so if they were being disadvantaged they would be crying out to regulators - who like to look after pension funds.

The head of Vanguard is on the record saying that his firm benefits from HFTs actions on the market. Narrower margins are a good thing.

Not that this is exactly how the middle class has been decimated, but nice illustration.

HFT isn't easy money.

Many foundations invest their money, with the idea that they will have a greater overall impact. I guess a prominent example is university endowments.

There was a story of a university researcher doing this a few years ago, on a for more modest wage.


On the one hand I think its far more generous, though as pointed out, the trader will end up donating a lot more cash.

Either way, good on them.

I have too much uncertainly about my future to make such a commitment at this moment (and to be fair I really think that politics should arrange a fairer society so that individuals don't need to do such things). It's in the back of my head that if I get rich I could do so much more for society.

I know about one well known tech executive who donates about half his income every year, and increases that percentage by 1% each year (he's been doing this for a few decades, since before he "made it.") Granted, not everyone is in the position to do this, but the point is that there are people who have managed to keep a serious long term commitment to philanthropy, but whose efforts are (probably intentionally), not so well known.

There was a similar story with Jason Trigg, an MIT graduate who went to work for a hedge fund just so he could give money away, also influenced by Peter Singer. See these discussions:



Here's the top comment from the second link:

Quote from quanticle:

        If you choose a profession that doesn't arouse your everyday passion for
	the sake of serving instead some abstract faraway good, you might end up as a
	person who values the far over the near. You might become one of those people
	who loves humanity in general but not the particular humans immediately
	around. You might end up enlarging the faculties we use to perceive the far
	-- rationality -- and eclipsing the faculties we use to interact with
	those closest around -- affection, the capacity for vulnerability and
	dependence. Instead of seeing yourself as one person deeply embedded in a
	particular community, you may end up coolly looking across humanity as a
	detached god.
Brooks sees this as a disdvantage, but I do not. Frankly, given the levels of irrational thought and behavior we see in the world today, we should be doing everything we can to increase the amount of rationality and far-oriented thinking in the world. I would posit that a world in which people were more like Jason Trigg would be a far better world, on every measurable metric, than the present that David Brooks endeavors to defend. I mean, Trigg, at least, has a goal and a plan to achieve it. The goal is the old utilitarian one of achieving the greatest good for the greatest number. The means is to earn lots of money and spend it on that goal.

        Third, and most important, I would worry about turning yourself into a means
	rather than an end. If you go to Wall Street mostly to make money for charity,
	you may turn yourself into a machine for the redistribution of wealth. You may
	turn yourself into a fiscal policy.
And what's wrong with that? The problem with fiscal policy is not the goal of fiscal policy. It is the coercive means used to achieve it. There is no coercion here. No one is forcing Jason Trigg to give away his wealth. He is doing it of his own volition. Were he older and richer, he'd be lauded as another Carnegie, or another Gates.

        Making yourself is different than producing a product or an external outcome,
	requiring different logic and different means. I'd think you would be more
	likely to cultivate a deep soul if you put yourself in the middle of the
	things that engaged you most seriously. If your profoundest interest is dying
	children in Africa or Bangladesh, it's probably best to go to Africa or
	Bangladesh, not to Wall Street.
That's not true at all. Sure, if you have skills that are needed in Africa or Bangladesh, it's best to go there. But not everyone has such skills. If we all pitched in like Jason Trigg and managed to get a cheap malaria vaccine crafted, say, 3 years from now, we'll have done far more good than if we'd all gone to Bangladesh or Africa volunteering to hand out bed nets. It comes down to the old question: are you worried about doing good or feeling good? If you're worried about doing good, you coldly analyze all the alternatives, and pick the one with the highest impact, even if it has zero visibility whatsoever. If you're worried about feeling good, you do what David Brooks advocates. You go down to Africa, Asia, or where-ever and get warm fuzzies by hoisting the white man's burden.

Rationality is not a sin. Calculation is not a sin. Money is not inherently sinful. All of these things are means, and have the capability to do both great good or great harm, depending on the end to which they're applied. Jason Trigg understands this. David Brooks does not. And that's why I, personally, respect Jason Trigg a lot more than David Brooks.

"What is the moral code of altruism? The basic principle of altruism is that man has no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice is his highest moral duty, virtue and value.

Do not confuse altruism with kindness, good will or respect for the rights of others. These are not primaries, but consequences, which, in fact, altruism makes impossible. The irreducible primary of altruism, the basic absolute, is self-sacrifice—which means; self-immolation, self-abnegation, self-denial, self-destruction—which means: the self as a standard of evil, the selfless as a standard of the good.

Do not hide behind such superficialities as whether you should or should not give a dime to a beggar. That is not the issue. The issue is whether you do or do not have the right to exist without giving him that dime. The issue is whether you must keep buying your life, dime by dime, from any beggar who might choose to approach you. The issue is whether the need of others is the first mortgage on your life and the moral purpose of your existence. The issue is whether man is to be regarded as a sacrificial animal. Any man of self-esteem will answer: “No.” Altruism says: “Yes.”"

-Ayn Rand

Gotta love Ayn Rand and her incredible ability to make bare, simplified, polarising dichotomies out of rich, complex topics, then paint the extreme opposite to her as evil, without examining whether her own chosen extreme may be equally evil. I mean, she really has taken the "build a straw man and set it on fire" approach to an art form (quite literally... and I'd add that the Fountainhead is a great book, if thoroughly misguided from a philosophical point of view).

Altruism as she defines it is obviously crap. What she fails to do is to clarify the extreme egocentrism that she proposes in an equally critical way. Here's an amusing attempt to do so using her own format:

> "What is the moral code of egocentrism? The basic principle of egocentrism is that other people have no right to exist other than for your sake, that service to you is the only justification of their existence, and that their sacrifice for your good is their highest moral duty, virtue and value.

> Do not confuse egocentrism with self-respect, self-awareness or respect for your rights. These are not primaries, but consequences, which, in fact, egocentrism makes impossible. The irreducible primary of egocentrism, the basic absolute, is the total unimportance of the other—which means; not caring one whit about others, using them for your own means, sacrificing their feelings and even their lives if necessary—which means: the other as a standard of evil, the self as a standard of the good.

> Do not hide behind such superficialities as whether you should or should not use people. That is not the issue. The issue is whether those people have the right to exist without being of use to you. The issue is whether you are really compelled to notionally support the existence, day by day, of people who are of no apparent use to you. The issue is whether your needs are the first mortgage on their life and the moral purpose of their existence. The issue is whether other people are to be regarded as sacrificial animals. Any man worth calling that will answer: “No.” Egocentrism says: “Yes.”"

As usual, the better place to sit is somewhere in the middle. No, you do not exist just to serve others, and total self-abnegation and sacrifice is certainly not a productive way to live. Neither, however, is total self-adoration and worship of your ego. Both are mistaken paths. The far better path is to realise that you need a balance of both respect for your own self, and connection to others, to live a good, fulfilled life.

For your own sake, fobcat, and not for mine, I hope you can read and understand the above...

Could anyone explain to me how donating money to charities is better than giving money to your family, service providers and businesses that give you food and goods?

$200K in pretax income ... nice.

Keep in mind, he does live in NY and works on Wall St so he likely needs $100k to live a decent middle class life tbh.


Since it doesn't want me to reply again [I'm submitting too fast]

If you can support a family of 4 in NY with less than $100k while qualifying as middle class, I'm curious how you manage it. :)



Real median household income for all working age residents adjusted for a family of four peaked in 2001 at slightly over $72,000, and for middle class households at just over $111,000. During the 2001-2008 cycle, however, median middle income actually fell despite the strong growth of the City’s economy, and has continued to fall during the recovery – for reasons that will be discussed further on – declining 7.8 percent in inflation-adjusted terms.

For NYC, $100,000 is a very average middle class income. Cost of living by area does matter.

I was composing a critical comment, and then realized it doesn't matter that this guy makes. Even if he made only $50K there would be some criticizing how "well off" he is.

The moral here is to make a difference - and don't hesitate to give money (if that is what you have) based on the fear that it will me mismanaged or not help.

I would disagree with the latter half of the moral as stated. I think those are entirely reasonable concerns to hesitate in giving money to e.g. a specific charity.

That said, what I think you intend to get at - don't let the perfect be the enemy of the good - do some basic due diligence, but don't let "due diligence" freeze you into inaction - I agree with that.

(edit: I started a sentence without finishing it -_-;;)

That and he's in a field that has volatile pay and employment so extra nest egg is essential. Not sure how he builds up savings (probably lives very frugal) but props to him for donating half his pay.

I'm in a similar boat to this guy for income, location, and donation goals. I spend < $30k per year living in downtown Manhattan, so that leaves a lot of room for saving. And I feel like my life is positively luxurious, so I'd never remotely use the word "sacrifice" to describe this.

I can think of a few reasonable changes I could make to lower my expenses to < $20k if I wanted to be more aggressive, but my current spending level works to compromise with my (incredibly understanding) girlfriend. Social factors are always there, but the absolute reality of this level of spending in NYC is fantastic.

The numbers will change when a family is involved, of course, but both the article guy and I (probably) have a long time to save up before that happens.

Living on $75k or so after-tax in NYC as a young single man isn't 'very frugal'. A nice room in a roommate situation can be had for $1000/mo, a very nice one for $2000, which totals $12k-$24k per year. Likewise a modest reasonably-located 1bedroom/studio can be had for $2000/mo. After that, the only mandatory expenses are $1000 or so a year for transportation and reasonable expenses for food, though much of that cost is likely paid by his employer.

I'd argue that it's extremely frugal given the city's high cost of living and like I mentioned above, an industry where pay and employment is volatile. He could easily get laid off or paid down year over year through no fault of his own. Your living expenses do not leave much leftover in the way of savings, travel (kinda good to vacation in a high stress job), or even just experiencing what one of the greatest cities in the world has to offer.

Should you also donate money to save hypothetical aliens in a far away galaxy, if we find out they exist? What about a fund to help people relocate from flooded cities from global warming 200 years in the future? What about donating to keep A.I. simulations from being shut off? Why donate to help people and not animals or bacteria? What about the fact that the universe is going to die from entropy, and all people die anyways from old age? What's the point?

Note: I try to not donate any of my money to any cause ever

Because some people are not as lucky. Some people don't have the basics such as water which we take for granted and it is all because of LUCK.

What's the point of life if not to help each other survive and enjoy life?

Sure, you need to keep yourself and your family comfortable but to actively distance yourself away from ANY kind of donation is just sub-human imo.

If you think one of those is the most efficient way to avert suffering then sure, why not?

We all almost do through taxes. He goes further and donates 50% more from the remaining money.

> We all almost do through taxes. He goes further and donates 50% more from the remaining money.

This is an odd argument. Are you saying that paying taxes is some form of altruism? The story is about a guy who donates money with no tangible benefit to himself. We all get benefits and services from the government. It debatable whether the value we receive is equal to the amount we pay in taxes, but the value is certainly not zero.

US entitlement spending is about 66% of the federal budget. Unless you're on disability, medicare, social security, or some other entitlement program that's money you're receiving no direct benefits from.

I dunno, I think the government employees (federal and, because much of the federal entitlement spending is joint state/federal programs like Medicaid) and contractors paid to work directly in the administration of those programs (or, in the case of companies running Medicare Advantage plans, working in for-profit businesses directly subsidized by the entitlement spending) are receiving at least as direct a benefit from those programs as the program recipients are, and often, per person, a much larger benefit, as well.

Government employees and administration are overhead.

> Government employees and administration are overhead.

The only way you get close to the claimed 66% number is if you are including all spending, including overhead, of the programs identified.

Exactly what I meant. I'm not saying there isn't any nobleness in his actions. Merely pointing out that we are all giving half or close to half the money we are producing and most of which we receive no benefit from.

He's probably taking the tax deductions for the donations, so it's not the same as donating an additional 50% "from the remaining money" (as some of it comes out of what would have been taxes). I didn't see it explicitly one way or the other in the article, though, so he could be donating 50% while still paying taxes on the full 100%.

This is a rounding error. Altruistic foreign aid (i.e., development aid) is a miniscule fraction of government spending in all countries. Norway tops the list with 1.07% of national income, and the US gives 0.19%.


Even if you count "non-altruistic" foreign aid (i.e., aid given to a recipient government by a donor government who also benefits, e.g. military aid), this barely budges the numbers. The US goes up to about 0.3%.

Throwing in private aid, like Wage's, makes the US look comparable to Europe because the US gives more money privately than Europe. But this is still within a factor of 2.

This is the same Peter Singer who told parents not to send their kids to college and instead send their tuition money to Africa. But apparently, if you send your kid to college anyway, he could make enough to send half his salary to Africa every year, far outweighing his parents' initial college fund. So who is right?

I like that Singer holds this guy up as an example, for doing the exact opposite of what Singer actually claimed was morally right.


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