Be A Charity Angel

I’ve overheard many folks lately discussing what sort of charity most deserves their money. They consider the plans of various charities, and try to analyze the chances that such plans will lead to good outcomes. Most folks I’ve heard have been favoring various intellectual charities, where the money goes mostly to pay intellectuals to develop and communicate ideas. And most of these folks also seem to spend lots of time consuming intellectual ideas. They read a lot, and have many opinions about what previous ideas were interesting and useful.

Such folks would do well to review the advantages of prizes over grants, and consider becoming charity angels. Let me explain.

Consider a donor who seeks to encourage or induce some sort of result in the world. With a grant, such a donor must decide ahead of time who seems to have a promising ability and approach. But with a prize, a donor need only decide after the fact who seems to have achieved a lot. Once potential awardees see a pattern of achievements being rewarded by prizes after the fact, they will gain an added incentive to achieve, an incentive roughly proportional to the prize amounts being offered. And the prize process avoids much of the added waste of grant proposals, review, search, etc. (Promising potential winners who are strapped for cash might obtain resources by selling their future prize rights in capital markets.)

Since it is much easier to evaluate what has worked than what will work, folks who read a lot of intellectual work and who are inclined to support future intellectual work via charity should consider making a habit of just giving money to those who have already accomplished something noteworthy. Most intellectuals have some resources at their disposal and look for promising future directions on which to spend such resources. Your awards for previous achievements should increase the incentive to all intellectuals to achieve similarly praiseworthy results in the future. This will better target your goals because you can better judge what past work has promoted your goals than which future people and approaches might do so.

Of course you may have other goals for your charity than encouraging a result in the world.  You may, for example, want to signal your personality and allegiance by donating to a familiar brand name that others will recognize.  You may want to affiliate with a high status organization and with high status others who donate to the same cause.  You may want to more directly affiliate with the doers who are the recipients of your donations, and to put yourself in a dominance role of control over them, and to take credit later for having believed in them when others did not. You may also prefer to affiliate with new and upcoming doers rather than old and past their prime doers. And you may want to signal your confidence in your judgements about promising people and approaches. For all of these other purposes, grants are probably your better bet today.  Which is of course why there are so few prizes.

But if you think yourself one of the rare exceptions, whose primary purpose is to actually encourage changes in the world, consider just finding a person who you think has already made a substantial contribution to your cause, and just writing them a check. (And maybe encourage him or her to periodically post summaries of donations received.) No further complication is required. (Should you think I deserve such an honor, a donate button is now available on this page. :) )

Added 11a: If you think risk-aversion creates diminishing returns in donations, i.e., that there’s less to gain by giving more to someone who’s already got a lot, then focus on neglected prior doers – those who have received too little attention and reward for their good accomplishments.

Added 12a: If you think some promising intellectuals lack resources, then buy shares in their future prize winnings.  If you think there are insufficient prizes in some area, then by all means create such prizes.  Just don’t confuse rewarding past intellectual accomplishments with investing to gain future financial returns.

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  • Jess Riedel

    I really like the ideas behind this post, but it seems to ignore obvious problems. Yes, the people who are implementing your goals will spend less time on grant writing if you give them money for results, not proposals. But won’t they spend a similar amount of time or resources advertising their accomplishments after the fact?…like writing blog posts? :)

    This is why I like the idea of well-defined prizes; everyone can see and agree about the prize, and the only incentive is to win it. But if the philanthropic are just throwing their money at whatever intellectuals they know exist and by whom they are suitably impressed by—remember, we’re operating under the hypothetical that this method is suitably popular to change expectations—then this will just force intellectuals to spend time advertising and impressing.

    • http://liveatthewitchtrials.blogspot.com/ iamreddave

      There are plenty of prize sites that would do a lot of the advertising for you. If you put up a competition on kaggle with a few hundred dollar prize you can get many people working on a prediction model. The first challenge on their page at the moment has a $150 prize.
      http://www.kaggle.com/

      I am not sure what predictions models would be useful for charity? Maybe a model that would predict the number and location of cases for some infectious disease?

      There are other challenge sites out there with their own communities so i think the advertising problem is not as bad as you might imagine.

    • http://hanson.gmu.edu Robin Hanson

      I’d rather people spent time promoting what they’ve actually done than spent time promoting what they think they might be able to do if given sufficient grants.

      • http://reprabbits.blogspot.com James Andrix

        This seems incompatible with letting underfunded dogooders get investment. “Fund me and it will be so awesome people will donate.” seems extremely speculative unless this kind of donation were common. This could be facilitated with a website devoted to such donations, like a time-reversed kickstarter.com

        I also wonder if people will be less willing to donate if they know much of the money will go to investors instead of “the people who really did the work”

      • http://hanson.gmu.edu Robin Hanson

        As I discuss below responding to Holden, underfunded doers is an exceptional case. If they must promote their potential, that just brings us back to a grant like level of promotions for that exceptional subset of cases.

  • http://entitledtoanopinion.wordpress.com TGGP

    Was this post inspired by the same thing as tug-o-war is not charity?

  • cournot

    But isn’t this what happens when rich people give to established universities, museums, etc? They are basically saying that they like existing filters and are rewarding those who cater to the demands of elite gatekeepers.

    • michael vassar

      It’s much more efficient to pay the producers of ideas directly. Universities, and even the most efficient research groups, produce WAY fewer ideas per dollar than, for instance, Robin Hanson does.

  • http://daedalus2u.blogspot.com/ daedalus2u

    This is an interesting idea.

    The problem with donors exerting control over intellectual product creators is that then the intellectual product creators create whatever the donors want to hear, not necessarily what is correct, the “Emperor’s new clothes” effect. It selects for sycophantic pseudointellectualism, not intellectual integrity and correct ideas.

    The intellectual products that should be most valuable to the donor are intellectual products that corrects the donor’s wrong ideas. That is exactly the kind of intellectual product generation that donors are least likely to fund.

    Because intellectual products can be replicated at very low cost and are not used up by that duplication, it isn’t clear to me what benefit a donor would derive by exerting dominance over an intellectual product creator, other than to prevent the generation of the exact intellectual products that would be most valuable to the donor.

    This would seem to be an argument for providing a minimum level of support for all individuals, basic food, housing, medical care, clothing, education, internet access, net neutrality, universal free speech and universal access to the marketplace of ideas. Without these things an intellectual cannot produce anything. Providing these things to everyone will result in the largest number of individuals with the resources to produce intellectual products independent of donor influences.

    It would also argue for donors funding research on ideas that they don’t like, provided their goal actually is intellectual understanding and not false signaling. By looking at what kinds of ideas donors fund, we can tell if their goal is intellectual understanding or sycophantic pseudointellectualism.

  • Desertopa

    I think this idea rests on some rather dubious premises. The idea that people are effectively motivated by rewards underlies a lot of economic theory, but it’s not well validated by experiment. This video points out some of the rather counterintuitive findings.

    http://www.youtube.com/watch?v=u6XAPnuFjJc

    Also, while an organization’s purchasing power is directly proportional to the amount of money they have, scope insensitivity suggests that the motivating power of a prize likely does not have a directly proportional relationship to the scale of the prize, even if we assume that the prizes are a positive motivator in the first place.

    The system might assist people who’ve already done good work in doing more good work, but I’m doubtful that it would be effective in induce people to do work in order to receive the prizes.

    • B1shop

      I don’t buy the interpretation of that study in the video. In this post, Robin says the Indian experiment was about choking.

      http://www.overcomingbias.com/2009/04/choke-to-submit.html

      That makes more sense to me. I choose my career in part because it’ll one day make me lots of money. If venture capitalists had gotten back to me about my sexy charity ideas, I’d be doing that instead.

      • Desertopa

        The degree to which financial incentives motivate people may vary a great deal from person to person, and we could use more research to narrow down the explanation that best describes the behavior of the average person. For my own part though, I find a model that assumes strong response to financial incentive to be very poorly predictive of my motivations or those of the people I work with.

        I’m reminded of a conversation I had with a friend of mine recently, who was hired to a job with a $90,000+ salary directly out of college, and has received pay raises since then. He’s currently looking for a new job, with the expectation of receiving much lower pay, because he finds his current job stressful and unfulfilling.

      • B1shop

        If you want to say things other than money also motivate us, then I’m all with you.

        But I don’t think you want to go to the other extreme either. The video says money doesn’t motivate people for cognitive tasks at all. That’s even more silly.

  • http://hanson.gmu.edu Robin Hanson

    Jess, yes charity angel prizes create incentives to advertise, but the overall losses don’t seem worse than with grants. I have no objections to well-defined prizes – but such things are not easy for most of my readers to create. They’d have to rely on another org to handle it, and then they’d have to evaluate that org.

    TGGP, inspired by examples of inefficient charity, but not political charity especially.

    cournot, those who do not track the work of individual intellectuals may need to instead donate to a large org based on a reputation for good prior work. But my post was addressed to those who do track many individual intellectuals.

    Desertopa, if money rewards do not influence behavior then grants are also ineffective. So are salaries for that matter.

    • Desertopa

      There’s some indication that salaries, as personal financial reward, are ineffective above a certain level. On the other hand, if money is a limiting factor in actually carrying out a project, then it won’t be able to proceed until the necessary level of funding is achieved.

  • http://hanson.gmu.edu Robin Hanson

    I added to the post.

  • http://www.givewell.org Holden Karnofsky

    This is Holden Karnofsky, co-founder of GiveWell. We try to help people do as much good as possible with their giving, and we’re open to anything – if we became convinced of the merits of this idea, we would promote it. However, we are currently not convinced. A couple of points:

    1. It often takes a long time to understand the impact of the kinds of initiatives we’re talking about (i.e., initiatives that set out to accomplish good in a way that is not profitable / does not pay for itself).

    2. If you give to an organization that has accomplished great things, you may be “rewarding” completely different people from the ones who were responsible for the accomplishment.

    3. I believe that people who set out to accomplish good in a way that is not profitable are usually confident in / happy with their financial situation, and looking for a non-monetary reward. Donations to people who have succeeded may thus have diminished impact on incentives relative to most monetary transfers.

    4. The points above are assuming that “charity angel” activity is to be undertaken in a fairly small-scale, irregular way. Visible, regular rewards for good works may work well, especially if they were predictable enough to allow people to borrow the needed resources against the hope of these rewards. Therefore, if you saw an opportunity to promote this idea in a big way and turn it into something visible and regular, I’d be more supportive of that; I think it is a poor idea for scattered individuals trying to accomplish as much good as possible with 3-6 figure donations.

    • http://hanson.gmu.edu Robin Hanson

      Holden, on 1, that is a big advantage of prizes over grants, especially if you wait longer before awarding them. On 2, that is a reason to give to individuals instead of organizations. On 3, monetary grants and prizes are equally ineffective at motivating folks who don’t want money. Once you have something to offer that they do care about (e.g., sex), then the issue of rewarding promise before hand or accomplishment afterward becomes relevant. On 4, you suggest there are scale economies in charity, but don’t really say what they are. Yes of course if there are scale economies whereby big amounts more than proportionally effective, then donors should try to coordinate to join together to offer bigger amounts. But coordination is expensive, so I’d like to see a clearer case made for the existence of such scale economies.

      • http://www.givewell.org Holden Karnofsky

        Robin, I don’t see how you are addressing the argument that grants are important for the capital they provide, not the incentives. I see a grantmaker as trying to find people who don’t need any more incentive to accomplish good things, but do need more capital. Grants provide capital; the “charity angels” idea doesn’t.

        Certain incentives can be “converted” into capital. For example, people know that certain kinds of businesses reap rewards; therefore, there are investors who provide capital to businesspeople, in the hopes of later getting a cut of these rewards. But this is where my point #4 comes in – incentives have to be psychologically prominent & seemingly predictable enough to build a plan around and be worth taking a risk on. I think the X Prize succeeds at this, and that a widespread enough “charity angels” program might as well, but that individuals acting on your suggestion are unlikely to create prominent and (seemingly) predictable incentives for doing good. I wasn’t referring to economies of scale in charity, but rather in prizes.

      • http://hanson.gmu.edu Robin Hanson

        Holden, first most intellectuals do have some discretionary resources to allocate, especially most of the ones you would actually want to attract to work on your cause. Second, yes in general it might help for customers to band together to promise large purchases if certain products were developed, to help entice investors to try to develop those products to sell to such customers later. But there is certainly no general requirement for such customer group commitments in order for capital markets to induce and fund investments in pursuing such customers. A great many products are developed without such commitments. This general point applies to future charity angels as customers of intellectual’s ideas, as well as to many other kinds of products and customers.

      • Jess Riedel

        most intellectuals do have some discretionary resources to allocate, especially most of the ones you would actually want to attract to work on your cause

        My first instinct is that many important causes would benefit most from drawing young intellectuals (i.e. grad students and post-docs) who currently squeeze into over-populated fields because, though crowded, these fields guarantee an audience and source of citations for mechanically produced papers. New and underdeveloped fields are too high risk for many young academics unless they are guaranteed steady employment for at least a few years and a chance at tenure.

      • http://hanson.gmu.edu Robin Hanson

        Jess, those young intellectuals aren’t going to get much grant money in today’s system. So hard to see how prizes make it worse.

  • scott

    Interesting! Reading Holden’s and Hanson’s points, I thought of GiveWell as a proxy prize. If GiveWell was more well-known, such that a good recommendation from GiveWell causes an increase in donations (is this the case even now?), that increase can be considered a prize for passing GiveWell’s standards.

    To the extent that GiveWell’s standards are a good approximation of “achieved a lot” (part of their evaluation is looking for statistically significant improvements from the charity’s work, which is precisely “achieved a lot”), they are a specific instantiation of Prof Hanson’s recommendation – that sacrifices a small amount of efficiency relative to the recommendation to gain a large satisfies-other-goals-of-charitable-giving bonus.

    Given that it appears many people have other goals for charity (see “But if you think yourself one of the rare exceptions”), I think the tradeoff is a good one.

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  • Jordan

    So your charity model is to pay people for work?

    So like, let’s say I can buy a burrito for $5 and eat it. While I’m at it, I can give $5 more to give the broke hungry man next to me a burrito.

    One could claim that I’ve bought a $5 burrito and also given a $5 cash prize to the burrito store for an act of charity. One could also claim I bought two burritos for $10.

    This sounds like exactly the kind of plan an economist would come up with.

    But how about we go one step further and focus specific organizations to altruism? After all, it’s usually harder than buying a burrito for a man standing next to you. The beneficiaries and donators are probably going to be quite distant; that’s why you need the organization. To try and ensure a minimum of fraud and corruption, these organizations will have to be financially transparent and avoid profit-seeking. We’ll call these “non-profits”. So the idea is, you’d give these “non-profits” some money, and then they would do a specific service that is a matter of public record. People would be able to donate to non-profits that they deem to be effective investments of cash.

    So, if I may finally shed the veneer of sarcasm, you basically implied a method for seeking out effective charities ($5. 1 burrito. Clear cost and clear effect.), without actually suggesting any kind of new institution.

    • Jordan

      And to pre-empt any mention of long shots that end up being extraordinarily beneficial: don’t worry about the people working at the research lab that cures cancer. I have a feeling they’ll be able to put food on the table.

  • Ely

    Regarding 12a: How should a young scientist go about marketing shares of future prizes? I am a graduate student and I feel that basic science research is painfully underfunded. This is not to say that “science in academia” is underfunded; on the contrary, there is a lot of money available if you want to do research that caters to short term commercial gains for companies and sponsors. As a scientist, I want to specifically avoid this kind of research from the very start of my career (most advisers tell me to just “play the game” and try to sneak in a couple of ‘basic’ research papers here and there when I can eek out the extra time. To me, this is a poor solution and if I can’t do better then I’ll just leave academia and embrace the fact that I have to cater to short term commercial interests (which are inherently very uninteresting to me) and at least earn some money).

    You seem to have a successful track of publishing research that’s tightly clustered around your interests. How can a young (not yet established) scientist do the same thing? I don’t consider having to “conform to the system” until I become “established” to be a feasible answer.