In April I posted on “trailer for David Alvarado’s slick-looking new [3D] film on longevity.” There’s now a new trailer: The Methuselah Generation; The Science of Living Forever from David Anthony Alvarado
Charities rely on donors more than businesses rely on investors. Once a business has gotten through the initial build-up, it should be able to sustain itself on re-invested profits or go out of business. Charities, on the other hand generally need to keep raising money.
Since fund-raising is more important to charities than to businesses, it makes sense to see charities innovating more in that area.
Fyi, crowd sourced film funding from investors is pretty straightforward, I invested in a friends low budget indie film recently. So it isn't regulatory hurdles, for films. I was surprised to discover there is even a way to get around the SEc accredited investor requirement via extra paperwork to show informed consent.
There's also an asymmetry of expectations. We expect that our money will motivate the people who receive it when it is given as an investment. We also feel that we have measurable quantities of stuff (property, money) that we can be angry about if it doesn't materialize as promised. To defend that property (and thus dangle a motivating sword over the neck of people in whom we invest) we set up laws and regulations.
With charity, we tend to believe that if the charity worker were motivated by money, they would not be as effective. I actually agree that this is true in some cases. For example, students who are motivated purely by learning rather than by receiving the highest grade tend to do much better on tests. In an experimental teaching environment that I was a part of last year, students were given the chance to wager their course credit on in-class multiple choice questions. You could also pay class credit to receive help or combine wagers with other students that you believed were more successful than yourself.
What we noticed in evaluating the wager data was that students tended to distribute total course credit very evenly, even if they were sure they were correct or had more confidence of being correct vs. their peers. Basically, the brightest students were still willing to pay to bundle their answers with other students, and at the end of the term, the credit distribution was basically uniform with some bumps at either extreme end.
What this suggests to me is that when people do not feel like they are "under the gun" so to speak and feel no pressure to succeed, they do better at certain tasks. For certain other tasks, being "under the gun" and having pressure to succeed helps to motivate. Whether true or not, I think most people are initially calibrated to believe that "charitable goals" are best achieved without extra pressure to succeed. If I demand a return on my donation to charity, whether in terms of measurable good in the world or personal profit to me, then I think the charity workers will perform worse than if they assume I freely give them a donation with no strings attached.
There is the Lichtman lab working on brain connectomics at Harvard. They actually do great work that will presumably have beneficial medical side effects even if the goal of reconstructing the human connectome is far off. Why not donate to them? You can feel good and you can rate the return of investment in terms of the impact factor and citation rankings of any publications produced. I'm always surprised that something like Kickstarter doesn't exist for graduate research labs.
I think you're approaching this from the wrong angle. Instead of asking why we don't (yet) have highly restrictive laws on charities, instead you should start by asking why we have such severe restrictions on how people can invest instead of allowing them to make their own investment decisions. Then ask if these same reasons would or would not apply to charitable contributions.
I appreciate the thought but that's not quite what I'm talking about. People have done bad or mistaken things for altruistic reasons before, but what they haven't done is raised so much money that it disrupted the economy.
The equivalent to tulip-mania or a ponzi scheme for altruistic reasons is what I'm looking for, not anything ever done wrong for altruistic reasons. We're talking about regulations on raising money in particular, not regulations on general behavior.
Emmett, haven't you read Michael Bloomberg? The whole financial crisis of 2008 was caused by altruism, by Congress pressuring Fannie and Freddie to loan money to low income borrowers.
This is why the economy needs such a backlash of anti-altruism, to get back to something sustainable. [/sarcasm]
Alternative hypothesis: you rarely see massive altruism-based scams on the same scale as greed-based scams, because altruism is a weaker force than greed. Therefore, we regulate behaviors where you could manipulate others by greed more strongly than behaviors where you could them by altruism.
Though perhaps it's simply my inability to call it to mind, I can think of a lot of occasions where investment crazes have seriously disrupted the economy (tulip mania, for example). I can't think of any corresponding occasions for an altruism craze.
>> This regulatory asymmetry seems to me to be an implicit recognition that we mainly donate to charity to signal our good intentions and loyalties, and that we don’t actually care much what happens to the money we donate.
Wow, that's a leaps. I constantly wonder how you get away with leaps like that here. The best I can come up with is that this is that observing the letter if not the spirit of scientific method is how subverting social science works. I'd presume that isn't your intention, except your two smart for that.
God damn, Hanson, I swear, it's as though, from my point-of-view, you exist to validate my cynical musings.
This signaling concept of yours is so vastly important a concept from social and evolutionary psychology as applied to just about every topic of interest to me, it's a wonder and a shame that I haven't learned about it until just the last few months.
Also, I hope it's not rude that I called you "Hanson" just now.
Usually you give to charities small amounts of money, but you invest relatively significant amounts of money. This is a difference that matters a lot when you demand for rules that protect you as an investor although you will not demand strict rules as a donor
Investments are part of an economic system in which prices are used to signal money to move to places which are efficient for the production of more stuff. Without much appeal to an optional value system, various optimizations can be defined on this process and regulation tends to improve the ability of the system to move towards those optima. As much as anybody might rail against the extensive regulations on publicly traded stocks in the western world, it is hard to not notice that gigantic reams and buckets of capital are moved in to potentially productive use through these regulated markets than through other mechanisms I can think of.
It is not as easy to define non-value-laden figures-of-merit on charities. A few can be defined, mostly around transparency of operation, and a few criteria may be set up to distinguish between a charity and a for-profit. But charity is essentially fuzzier: viewed as producers charities are deliberatly outside the price-signalling system and the optimizations associated with it.
Charities are much more a matter of taste, a consumer item rather than an integral part of the productivity of our society. Or to the extent they are part of the productivity of our society, it is primarily in roles where defects are believed by their funders to exist in how the pricing-based productive system works.
So charities are at best ad hoc fixes on the productive system, and at worst consumption items. To heavily regulate them for efficiency would be to destroy their ability to hack solutions to percieved problems in the "for-profit" system, and would just be inappropriate for them viewed as consumer items.
You haven't seen that headline precisely for the reasons Robin describes. There are plenty of people who leave most or all of their estate to a charity that basically wastes it. The lack of headlines is not for lack of events.
That said, I agree that there are significant difference between charity and investment that signaling explanations hardly seem obvious.
Charities rely on donors more than businesses rely on investors. Once a business has gotten through the initial build-up, it should be able to sustain itself on re-invested profits or go out of business. Charities, on the other hand generally need to keep raising money.
Since fund-raising is more important to charities than to businesses, it makes sense to see charities innovating more in that area.
I added to this post.
Fyi, crowd sourced film funding from investors is pretty straightforward, I invested in a friends low budget indie film recently. So it isn't regulatory hurdles, for films. I was surprised to discover there is even a way to get around the SEc accredited investor requirement via extra paperwork to show informed consent.
There's also an asymmetry of expectations. We expect that our money will motivate the people who receive it when it is given as an investment. We also feel that we have measurable quantities of stuff (property, money) that we can be angry about if it doesn't materialize as promised. To defend that property (and thus dangle a motivating sword over the neck of people in whom we invest) we set up laws and regulations.
With charity, we tend to believe that if the charity worker were motivated by money, they would not be as effective. I actually agree that this is true in some cases. For example, students who are motivated purely by learning rather than by receiving the highest grade tend to do much better on tests. In an experimental teaching environment that I was a part of last year, students were given the chance to wager their course credit on in-class multiple choice questions. You could also pay class credit to receive help or combine wagers with other students that you believed were more successful than yourself.
What we noticed in evaluating the wager data was that students tended to distribute total course credit very evenly, even if they were sure they were correct or had more confidence of being correct vs. their peers. Basically, the brightest students were still willing to pay to bundle their answers with other students, and at the end of the term, the credit distribution was basically uniform with some bumps at either extreme end.
What this suggests to me is that when people do not feel like they are "under the gun" so to speak and feel no pressure to succeed, they do better at certain tasks. For certain other tasks, being "under the gun" and having pressure to succeed helps to motivate. Whether true or not, I think most people are initially calibrated to believe that "charitable goals" are best achieved without extra pressure to succeed. If I demand a return on my donation to charity, whether in terms of measurable good in the world or personal profit to me, then I think the charity workers will perform worse than if they assume I freely give them a donation with no strings attached.
There is the Lichtman lab working on brain connectomics at Harvard. They actually do great work that will presumably have beneficial medical side effects even if the goal of reconstructing the human connectome is far off. Why not donate to them? You can feel good and you can rate the return of investment in terms of the impact factor and citation rankings of any publications produced. I'm always surprised that something like Kickstarter doesn't exist for graduate research labs.
I think you're approaching this from the wrong angle. Instead of asking why we don't (yet) have highly restrictive laws on charities, instead you should start by asking why we have such severe restrictions on how people can invest instead of allowing them to make their own investment decisions. Then ask if these same reasons would or would not apply to charitable contributions.
Aaron Miller responds:http://wholeinterest.com/20...
I appreciate the thought but that's not quite what I'm talking about. People have done bad or mistaken things for altruistic reasons before, but what they haven't done is raised so much money that it disrupted the economy.
The equivalent to tulip-mania or a ponzi scheme for altruistic reasons is what I'm looking for, not anything ever done wrong for altruistic reasons. We're talking about regulations on raising money in particular, not regulations on general behavior.
Emmett, haven't you read Michael Bloomberg? The whole financial crisis of 2008 was caused by altruism, by Congress pressuring Fannie and Freddie to loan money to low income borrowers.
This is why the economy needs such a backlash of anti-altruism, to get back to something sustainable. [/sarcasm]
Yeah, I agree with this more than the original explanation.
Alternative hypothesis: you rarely see massive altruism-based scams on the same scale as greed-based scams, because altruism is a weaker force than greed. Therefore, we regulate behaviors where you could manipulate others by greed more strongly than behaviors where you could them by altruism.
Though perhaps it's simply my inability to call it to mind, I can think of a lot of occasions where investment crazes have seriously disrupted the economy (tulip mania, for example). I can't think of any corresponding occasions for an altruism craze.
You say:
>> This regulatory asymmetry seems to me to be an implicit recognition that we mainly donate to charity to signal our good intentions and loyalties, and that we don’t actually care much what happens to the money we donate.
Wow, that's a leaps. I constantly wonder how you get away with leaps like that here. The best I can come up with is that this is that observing the letter if not the spirit of scientific method is how subverting social science works. I'd presume that isn't your intention, except your two smart for that.
God damn, Hanson, I swear, it's as though, from my point-of-view, you exist to validate my cynical musings.
This signaling concept of yours is so vastly important a concept from social and evolutionary psychology as applied to just about every topic of interest to me, it's a wonder and a shame that I haven't learned about it until just the last few months.
Also, I hope it's not rude that I called you "Hanson" just now.
Usually you give to charities small amounts of money, but you invest relatively significant amounts of money. This is a difference that matters a lot when you demand for rules that protect you as an investor although you will not demand strict rules as a donor
Investments are part of an economic system in which prices are used to signal money to move to places which are efficient for the production of more stuff. Without much appeal to an optional value system, various optimizations can be defined on this process and regulation tends to improve the ability of the system to move towards those optima. As much as anybody might rail against the extensive regulations on publicly traded stocks in the western world, it is hard to not notice that gigantic reams and buckets of capital are moved in to potentially productive use through these regulated markets than through other mechanisms I can think of.
It is not as easy to define non-value-laden figures-of-merit on charities. A few can be defined, mostly around transparency of operation, and a few criteria may be set up to distinguish between a charity and a for-profit. But charity is essentially fuzzier: viewed as producers charities are deliberatly outside the price-signalling system and the optimizations associated with it.
Charities are much more a matter of taste, a consumer item rather than an integral part of the productivity of our society. Or to the extent they are part of the productivity of our society, it is primarily in roles where defects are believed by their funders to exist in how the pricing-based productive system works.
So charities are at best ad hoc fixes on the productive system, and at worst consumption items. To heavily regulate them for efficiency would be to destroy their ability to hack solutions to percieved problems in the "for-profit" system, and would just be inappropriate for them viewed as consumer items.
You haven't seen that headline precisely for the reasons Robin describes. There are plenty of people who leave most or all of their estate to a charity that basically wastes it. The lack of headlines is not for lack of events.
That said, I agree that there are significant difference between charity and investment that signaling explanations hardly seem obvious.