Tag Archives: Charity

GiveWell Interview

Alexander Berger from GiveWell interviewed me on prediction markets, and has posted his notes here. Alex and I seem to disagree about the importance of this topic:

Organizational obstacles  The main barrier to wider-scale adoption of prediction markets is that most organizations are reluctant to use them. It is unclear why this is the case. Those currently in power within firms may resist prediction markets because the markets would spread previously privileged information across the company and change perceptions of what is knowable and who knows

I tried to emphasize this topic, but Alex devotes only 60 out of 1800 words to it.

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Multiplier Isn’t Reason Not To Wait

On the issue of whether to help now vs. later, many reasonable arguments have been collected on both sides. For example, positive interest rates argue for helping later, while declining need due to rising wealth argues for helping now. But I keep hearing one kind of argument I think is unreasonable, that doing stuff has good side effects:

Donating to organizations (especially those that focus on influencing people) can help them reach more people and raise even more money. (more)

Giving can send a social signal, which is useful for encouraging more giving, building communities, demonstrating our generosity, and coordinating with charities. (more)

Influencing people to become effective altruists is a pretty high value strategy for improving the world. … You can do more good with time in the present than you can with time in the future. If you spend the next 2 years doing something at least as good as influencing people to become effective altruists, then these 2 years will plausibly be more valuable than all of the rest of your life. (more)

Yes doing things now can have good side effects, but unless something changes in the side-effect processes, doing things later should have exactly the same sort of side effects. And because of positive interest rates, you can do more later, and thus induce more of those good side effects. (Also, almost everyone can trade time for money, and so convert money or time now into more money or time later.)

For example, if you can earn 7% interest you can convert $1 now into $2 a decade from now. Yes, that $1 now might lend respectability now, induce others to copy your act soon, and induce learning by the charity and its observers. But that $2 in a decade should be able to induce twice as much of all those benefits, just delayed by a decade.

In math terms, good side effects are multipliers, which multiply the gains from your good act. But multipliers are just not good reasons to prefer $1 over $2, if both of them will get the same multiplier. If the multiplier is M, you’d just be preferring $1M to $2M.

Now it does seem that many people are arguing that these side-effect processes are in fact changing, and changing a lot. They suggest that that if you work with or donate to them or their friends, then these efforts today can produce huge gains in inducing others to copy you, or in learning better how to do things, gains that won’t be available in the future. Because they and you and now are special.

I think one should in general be rather suspicious of investing or donating to groups on the basis that they, or you, or now, is special. Better to just do what would be good even if you aren’t special. Because usually, you aren’t.

Now one very believable way in which you might be special now is that you might be at a particular age. But the objectively best age to help is probably when you have peak abilities and resources, around age 40 or 60. If you are near your peak age, then, yes, maybe you should help now. If you are younger though, you should probably wait.

Added 14Apr: Every generation has new groups with seemingly newly urgent or valuable causes. So you need some concrete evidence to believe that your new cause is especially good relative to the others. I am not at all persuaded that today is very special just because some people throw around the phrase “effective altruism.”

Added 19Apr: Since my point doesn’t seem to get through just using simple words, here is a more formal math explanation:

Without loss of generality, we can define help x so that it is time-independent, i.e., so that x gives the same amount of direct help no matter the time t it is given. Also, assume that the process by which direct help x at time t results in indirect help at later times is stationary. That is, for every small x spent at time t, a distribution of gains are produced at later delays s according to the same function f(s). Thus the total help resulting from direct help x at time t is x*(1+Integral_t^Infty f(u-t)*du) = x*(1+Integral_0^Infty f(s)*ds. So if this integral is finite, then direct help x induces a constant indirect help multiplier M = 1+Integral_0^Infty f(s)*ds.

One might define a rate of return r for this indirect help as the r that solves the equation 1 = Integral_0^+Infty exp(-r*s)*f(s)*ds. And this rate of return r might in fact be huge. But note that regardless of the return r one calculates from a formula like this, one always gives more total help by choosing a larger amount of direct help x. So if you can give more direct help by helping later, you should.

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Socializers Clump

Imagine that this weekend you and others will volunteer time to help tend the grounds at some large site – you’ll trim bushes, pull weeds, plant bulbs, etc. You might have two reasons for doing this. First, you might care about the cause of the site. The site might hold an orphanage, or a historical building. Second, you might want to socialize with others going to the same event, to reinforce old connections and to make new ones.

Imagine that instead of being assigned to work in particular areas, each person was free to choose where on the site to work. These different motives for being there are likely to reveal themselves in where people spend their time grounds-tending. The more that someone wants to socialize, the more they will work near where others are working, so that they can chat while they work, and while taking breaks from work. Socializing workers will tend to clump together.

On the other hand, the more someone cares about the cause itself, the more they will look for places that others have neglected, so that their efforts can create maximal value. These will tend to be places places away from where socially-motivated workers are clumped. Volunteers who want more to socialize will tend more to clump, while volunteers who want more to help will tend more to spread out.

This same pattern should also apply to conversation topics. If your main reason for talking is to socialize, you’ll want to talk about whatever everyone else is talking about. Like say the missing Malaysia Airlines plane. But if instead your purpose is to gain and spread useful insight, so that we can all understand more about things that matter, you’ll want to look for relatively neglected topics. You’ll seek topics that are important and yet little discussed, where more discussion seems likely to result in progress, and where you and your fellow discussants have a comparative advantage of expertise.

You can use this clue to help infer the conversation motives of the people you talk with, and of yourself. I expect you’ll find that almost everyone mainly cares more about talking to socialize, relative to gaining insight.

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Rejection Via Advice

We get status in part from the status of our associates, which is a credible signal of how others see us. Because of this, we prefer to associate with high status folks. But it looks bad to be overt about this. So we try to hide this motive, and to pretend that other motives dominate our choices of associates.

This would be easier to do if status were very stable. Then we could take our time setting up plausible excuses for wanting to associate with particular high status folks, and for rejecting association bids by particular low status folks. But in fact status fluctuates, which can force us to act quickly. We want to quickly associate more with folks who rise in status, and to quickly associate less with those who fall in status. But the coincidence in time between their status change and our association change may make our status motives obvious.

Since association seems a good thing in general, trying to associate with anyone seems a “nice” act, requiring fewer excuses. In contrast, weakening an existing association seems less nice. So we mainly need good excuses for pushing away those whose status has recently fallen. Such opportunistic rejection, just when our associates most need us, seems especially wrong and mean. So how do we manage it?

One robust strategy is to offer random specific advice. You acknowledge their problems, express sympathy, and then take extra time to “help” them by offering random specific advice about how to prevent or reverse their status fall. Especially advice that will sound good if quoted to others, but is hard for them to actually follow, and is unlikely to be the same as what other associates advise.

If different associates offer different advice, then this person with fallen status simply must fail to follow most of that advice. Which then gives all those folks whose advice was not followed an excuse to distance themselves from this failure. And those whose advice was followed, well at least they get the status mark of power – a credibly claim that they have influence over others. Either way, the falling status person loses even more status.

Unless of course the advice followed is actually useful. But what are the chances of that?

Added 27Dec: A similar strategy would be useful if your status were to rise, and you wanted to drop associates in order make room for more higher status associates.

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Beware Value Talk

Decisions depend on both values and facts. Values are about us and what we want, while (beliefs about) facts are about everything else, especially the way everything else changes how what we get depends on what we do. Both values and facts are relevant to decisions.

But honestly, facts usually matter far more. Yes, sometimes we err by mistaking our values, and sometimes our values are more complex than we realize. But for the vast majority of our decisions, we have a good rough idea of what we value, and most of our decision problem (on the margin) is to figure out relevant facts. (If you review the last ten decisions you made, I think you’ll see this is obvious.)

Even when learning values is important, talking values with others usually helps less. To learn what we value, we mostly just need to try different things out and see how we feel about them. So compared to thinking about values, talking values seems even less useful for informing decisions. That is, we have better ways to coordinate to discover the world we share than to coordinate to learn our individual values. Yet we seem to spend an awful lot of time discussing values. Especially on grand topics like politics, religion, charity, sex/love, the arts, the future, etc., we seem to spend more time talking values than facts. (We also love to drop names on these topics.) Why?

Such topics tend to put us in a far mental mode, and far modes focus us on basic values relative to practical constraints. Which makes sense if far modes function more to manage our social impressions. That is, value-focused talk makes sense if such talk functions less to advise decisions, and more to help us look good. By talking values we can signal our loyalties and the norms we support, and we can covertly hint about norm violations we might overlook. (Dropping names also lets us covertly signal our loyalties.)

This is what bugs me personally about most discussions of grand topics — they are so full of value affirmations (and name dropping), and so empty of info to improve decisions. The modes that we prefer for such topics, such as stories, music, testimonials, and inspirational speeches, are much better for transmitting values than facts. Worse, people love to revisit the same value topics over and over, even though their values rarely change; it is info about facts that change, and so justify revising topics often. Also, the “experts” we prefer on these grand topics are mostly those whose main celebrated credentials are about their values and their abilities to move values, not about their understanding of facts.

I’m glad to be an academic, since our standard mode of talk is better suited to discerning and sharing facts than values. And I’m especially glad to be an economist, since our using a standard value metric lets us focus most of our disagreement on differing views about facts. Of course even so most academic discussion isn’t very well targeted at improving decisions; we are far more interested in getting better credentialed as being impressive. But at least we mostly talk facts.

If you think you are one of the rare folks who actually cares more about making better decisions than about signaling loyalties, and if you wanted to find other like minded folks to work with, I’d think you’d tend to avoid talking values, as that would be a bad sign about your interests. But in fact most folks who say they are the rare ones who care mainly about better decisions, and who take lots of personal time talk about it, seem in fact to spend most of their time talking values. They even tend to prefer the value focused modes and experts. Why are so few folks willing to even pretend to focus on facts?

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Graeber’s Debt book

About a year ago I finished David Graeber’s 2011 book Debt: The First 5000 Years. Since he’s an Occupy Wall Street anthropologist, you might expect me to dislike the book. But I enjoyed it, and learned a lot, even though it does ramble, and his economics is weak.

Graeber’s overall mood is anti-debt:

For thousands of years, the struggle between rich and poor has largely taken the form of conflicts between creditors and debtors – of arguments about the rights and wrongs of interest payments, debt peonage, amnesty, repossession, restitution, the sequestering of sheep, the seizing of vineyards, and the selling of debtors’ children into slavery. By the same token, for the last five thousand years, with remarkable regularity, popular insurrections have begun the same way: with the ritual destructions of the debt records – tablets, papyri, ledgers, whatever form they might have taken in any particular time and place. (After that, rebels usually go after the records of landholding and tax assessments.) As the great classicist Moses Finley often liked to say, in the ancient world, all revolutionary movements had a single program: “Cancel the debts and redistribute the land.” (p.8)

That is sure a dramatic image, and makes one’s opinion on debt seem pretty fundamental. Oddly, Graeber never actually comes out directly against debt. He doesn’t seem to want to forbid it. Instead he seems to just want to set a low bar for forgiving the debts of the poor, mainly because helping the poor is a good thing. The closest thing to an argument I found:

The remarkable thing about the statement “one has to pay one’s debts” is that even according to standard economic theory, it isn’t true. A lender is supposed to accept a certain degree of risk. If all loans, no matter how idiotic, were still retrievable – if there were no bankruptcy laws, for instance – the results would be disastrous. What reason would lenders have not to make a stupid loan? (p.3)

Actually standard economic theory doesn’t say that the results without bankruptcy laws would be disastrous. Yes, the more stuff people can promise as collateral to support loans, or promise to suffer if they fail to pay, the more loans will be made, and the more people there will end up poorer or suffering because they can’t pay loans. But economists can’t say this is bad without adding assumptions about why such poverty is inefficient.

You might say that poverty is economically inefficient because it makes other people feel bad to know it exists, or because it keeps investments from being made in poor folks’ human capital. It could make sense to support general redistribution to deal with such problems. But debt forgiveness is not general redistribution. A policy of forgiving the debts of the especially poor mainly keeps the nearly poor from taking out loans from which they expect to gain overall, and raises the loan interest rates they pay.

Standard economic theory says that such debt forgiveness redistributes to the very poor, but not by taxing the rich. Anticipated future debt forgiveness instead taxes the nearly poor who take out loans and then do well, by raising the interest rates at which they repay their loans.

Yes debts are one of the ways by which people take chances with their wealth level, sometimes rising and sometimes falling. And yes if we stopped the nearly poor from taking such chances we might reduce the numbers of the very poor. But why pick only on loans? There are lots of other ways in which the nearly poor take chances with their wealth level, such as by trying new careers, jobs, neighborhoods, and social groups. Should we try to stop these risky behaviors as well?

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Why Think Of The Children?

When a cause seems good, a variation focused on children seems better. For example, if volunteering at a hospital is good, volunteering at a children’s hospital is better. If helping Africa is good, helping African kids is better. If teaching people to paint is good, teaching children to paint is better. If promoting healthy diets is good, promoting healthy diets in kids is better. If protecting people from war is good, protecting kids from war is better. If comforting lonely people is good, comforting lonely kids is better.

Why do most idealistic causes seem better when directed at kids? One explanation is that kids count a lot more in our moral calculus, just as humans count more than horses. But most would deny this I think. Another explanation is that kids just consistently need more of everything. But this just seems wrong. Kids are at the healthiest ages, for example, and so need health help the least. Even so, children health is considered a very noble cause.

For our foragers ancestors, child rearing was mostly a communal activity, at least after the first few years. So while helping to raise kids was good for the band overall, each individual might want to shirk on their help, and let others do the work. So forager bands would try to use moral praise and criticism to get each individual to do their kid-raising share. This predicts that doing stuff for kids would seem especially moral for foragers. And maybe we’ve retained such habits.

My favored explanation, however, is that people today typically do good in order to seem kind, in order to attract mates. If potential mates are considering raising kids with you, then they care more about your kindness toward kids than about your kindness toward others. So to show off the sort of kindness that your audience cares about, you put a higher priority on kindness to kids.

Of course if you happened to be one of those exceptions really trying to just to make the world a better place, why you’d want to correct for this overemphasis on kids by avoiding them. You’d want to help anyone but kids. And now that you all know this, I’ll wait to hear that massive rumbling from the vast stampeed of folks switching their charity away from kids. … All clear, go ahead. … Don’t be shy …

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On Accidental Altruists

Gordon Tullock:

All of us like to think that we are better, more altruistic, more charitable, than we actually are. But, although we have this desire, we don’t want to pay for it. We are willing to make a sacrifice of perhaps 5 percent of our real income in charitable aid to others. We would like to think of ourselves, however, as making much larger transfers without actually making them. One of the functions of the politician in our society is to meet this demand. (more)


As an adolescent I seem to have deeply internalized the idea of great scientists/visionaries as heroes. I long judged my efforts by their standards – what would increase the chance that I would become such a person, or be approved by one. Marching to the beat of this unusual status audience drummer often led me to “non-conform” by doing things that less impressed folks around me. But I very definitely wanted to impress someone. (more)

Let me admit it here and now: I am an accidental altruist, driven more by ambition than empathy. I have sought glory by understanding deep mysteries of quantum physics, disagreement, and human hypocrisy, by foreseeing the next great era after ours, and by inventing and deploying new forms of info aggregation in governance.

I happen to believe that such actions will in fact give an unusually large expected benefit to the world. This is because I believe that in our era a great many things go quite wrong because we do not understand ourselves and our future, and because we aggregate info badly. But, I must admit that I might still pursue similar glories even if they gave little benefit. And perhaps even if they created modest harm.

Now it is not a complete accident that our society offers glory to those who improve our governance or deepen our understanding of the world and ourselves. Or that more glory often goes to those whose contributions seem more likely to benefit us all. This is a somewhat functional way for a society to coordinate to improve itself. But the credit here should probably go to the slow process of cultural selection, whereby cultures with more functional institutions win out in competition with other cultures.

I suspect that many will think less of me if they see my altruism as more accidental, relative to intentional. And this makes sense to the extent that people use altruism as a signal of niceness. That is, if you use how nice someone is toward the world as a whole as signal of how nice they would treat you as a friend, spouse, colleague, etc., then it makes sense to put less weight on accidental niceness. We accidental altruists probably tend to be less nice.

But if what you wanted was just to encourage more altruism toward the world, I’d think you’d mostly just want to celebrate people more who actually do more good for the world, without caring that much if they are driven more by glory or empathy. Sure, when faced with an option where they might gain glory by hurting the world, such a person might well choose it. But in areas where pursuing glory tends mostly to help the world, my guess is that the world is helped more if we just praise all good done for the world, intend of focusing our praise mainly on those who do good for the purest of reasons. And I think we all pretty much know this.

So why don’t we just celebrate all good done, regardless of motive? I’d guess it is because most of us care less about how to help the world overall, and more about how to use the altruism of others as a signal of their personal inclinations and abilities.

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Talkative Sell, Silent Buy

Me six years ago:

Every transaction has both a buyer and a seller. Yet we hear much more about salesmen, and how to sell, than we do about buyermen and how to buy. … Why? [Since] buyers are usually more uncertain about their value than sellers are about their cost, … whether a sale happens is more clearly a signal of seller ability than of buyer ability. … We like to see and affiliate with people who have impressive abilities associated with sales. (more)

Katja and I did another podcast recently, this time on advertising, and we talked a bit about how people seem to pay more attention to selling than to buying. Katja noted that we seem to give more attention to the signals we send, vs. interpreting the signals of others. For example, we think more about what we will wear than about the judgements we form based on what other people wear. We think a lot more what our charity says about us than about what we think about others based on their charity.

Someone at the talk last Thursday argued that they can’t be donating to look good, since they don’t tell anyone. And that reminded me of how terrified people are to speak in public. And that brought a unifying explanation to mind: we more often need to verbally justify the signals we send than how we interpret the signals of others. Let me explain.

For our distant forager ancestors, their most important public speaking probably happened in situations where they were being accused, and needed to defend themselves. Since the generic accusation behind any specific accusation was that one wasn’t doing enough overall for the band, and maybe should be exiled or killed, our ancestors should have been eager to collect examples of the help they have given, especially unheralded help. So we may have inherited a habit of doing helpful things, and not calling attention to them, but remembering them so we could mention them later if called on to defend ourselves.

More generally, our ancestors probably acquired the habit of consciously thinking about actions that others were likely to challenge or criticize. They’d continually come up with explanations of what they did and why, and be ready to tell those stories, even if they didn’t actually have to explain or justify most of them. And because they were rarely asked to justify or explain the judgements they made about others, they didn’t get into as much of a habit of explaining those.

This theory predicts that we in fact give just as much mental attention to buying as to selling, and just as much to interpreting signals as to sending signals, because these are in fact on average equally as important to us. But we give a lot more conscious attention to the side that needs to be explained, because that is what consciousness is about – consciousness helps much less to make decisions than to explain and justify them.

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If More Now, Less Later

On Thursday I talked, together with Elie Hassenfeld of GiveWell, at the UC Berkeley Faculty Club on Effective Altruism (audio here). Scott Alexander wrote a thoughtful report, which Tyler blogged. One claim I made that I’ve before (here, here, here) is that because real interest rates (i.e., average investment rates of return) tend to be positive, it is more effective to wait, investing now and then donating later. Since many continue to question that claim, I thought I’d elaborate a bit.

In the past I’ve used Ben Franklin as an example of the possibility of using trusts to save for a very long time. But I think that distracted from my basic point, which can be made just by suggesting that you wait until the end of your life to donate. Waiting longer might in fact be better, but it has more tax and agency issues; you can’t as easily ensure your money is spent the way you want.

I admit that a good reason to donate now is if you believe that we are quickly running out of worthy recipients of charity, either because the world is getting richer and nicer, the charity world is getting more effective, or we happen to live in an unusual time of great need or danger. People who think that global warming and ecological collapse will soon make the world a hell can’t believe this, nor can those who fear great disruption in an em transition. But others may.

I also agree that tax considerations will change the rate of return you can expect, and that by giving over a period of time you may learn from your early gifts to better pick later gifts. But it should be enough to start this learning process when you are older; your life experience will help you learn faster then.

The issue I want to focus on in this post is: how high do interest rates have to be to justify saving to donate later? I’ve sometimes said that interest rates need to be higher than growth rates, and some have questioned if interest rates are in fact higher than growth rates. Others, like my co-speaker Ellie Hassenfeld and his college Holden Karnofsky at Givewell, argue that giving now to help people who are sick or under-schooled creates future benefits that grow faster than ordinary growth rates. But now I think I was mistaken – if real charity needs are just as strong in the future as today, then all we really need are positive interest rates. Let me explain.

When a person chooses to save financially, they choose to spend a bit less in their usual ways, in order to give money to someone else, in the expectation of getting money back from that someone else at a later date. If they had instead not saved, and spent the money instead, that spending may well have also indirectly benefited them in the future. They might buy some medicine, get more exercise, get more sleep, try out some new products, make some new friends, or learn some new skills, any of which might help their future self.

But at the margin, a person who saves another dollar, or chooses not to borrow another dollar, must typically expect the financial returns from their investments will help them more in the future than will such indirect effects of spending today. In fact, they should expect this savings will benefit their future self more than any of these other ways of spending today. After all, why give up money today if that both gives you less to spend today, and gives you less in the future? So there wouldn’t be any savings, or less than maximal borrowing, if people didn’t expect more gains later from saving than from spending today.

This implies that unless charity recipients are saving nothing and borrowing as much as they possibly can, they must expect that you would benefit them more in the future by saving and giving them the returns of your savings later, than if you had given them the money today, even after taking into account all of the ways in which their spending today might help them in the future. So there really must be a tradeoff between helping today and helping later; if you help more today, you help less in the future. At least if you help them in a way they could have helped themselves, if only they had the money.

Of course you might not care as much about future suffering, or future folks might suffer less. But if you do care as much, and there is as much future need to help, then if interest rates are positive you can obtain more real resources with which to give more real help if you will save now, and donate later.

You might wonder: what if a deserving charity recipient is borrowing, and at a higher interest rate than you can get from by investing? This implies that you might benefit them and yourself by loaning them money, if you could overcome the barriers that have prevented others from doing so. It also implies that if you were going to help them, you might want to do it now rather than later. But this doesn’t change the fact that there is a tradeoff between helping today vs. tomorrow. And if there will be people later in a similar situation of need, you can do more good by waiting to help them later.

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