Where, why and how I donated in 2017

February 2018

Previously: 2016

This year, I met my goal of donating 50% of my income. The donation was split as follows:

The rest of this post explains my reasoning, how I’ve changed my views over the past year, and what I’m thinking about for the future.

Preface: criticism welcome

Since this is one of the most important decisions I make every year, I always love feedback! You can comment (either privately or publicly) using the comment box at the bottom of this page. For this post, Crocker’s Rules apply, i.e., I commit not to take offense at any suggestion or argument.

Choosing the amount

I considered lowering my donation target this year for a couple reasons:

However, the new tax bill meant that it would save money for me to donate more this year and less in future years. So even if I did decide to reduce my donation goal, it would make more sense to reduce it next year than this year. I’m still thinking about what my donation goal for 2018 should be.

Splitting and giving to GiveWell

I continued my strategy from last year of giving 20% of my donation to GiveWell and 80% to more speculative/weird things. This year I followed GiveWell’s top-line recommendation of donating 90% for re-granting at their discretion and 10% towards their operating expenses.

Giving to a donor-advised fund

A few things pushed me to defer my final decision this year:

  1. Many organizations released their updates relatively late this year, so it was hard for me to understand who was raising how much for what.

  2. Given how much Open Phil and GiveWell Incubation Grants have stepped up their funding, it doesn’t feel like there’s an obvious role for individual EA-aligned donors that is distinct from extending Open Phil’s last dollar.

  3. Even more than last year, I think most of my impact comes from my day job and I value being able to focus my attention on it as completely as possible. It seemed like it would be a big distraction to keep up with enough individual organizations to make donations that I was happy with.

Because of this, I didn’t feel like I had either the time or attention to make a high-quality donation decision in 2017, so I used a donor-advised fund to kick the can down the road.

Alternatives I considered

Last year I donated mostly to the EA Giving Group donor advised fund managed by Nick Beckstead. That mostly morphed into two of the Center for Effective Altruism’s EA Funds.

At the beginning of the year I was really excited about EA Funds–it seemed like it had the potential to be akin to GiveWell for causes other than global poverty. Unfortunately, the funds have been making grants very slowly, so it’s hard for me to evaluate their track record (and if I end up deciding to grant my DAF money there, the delay probably won’t be an issue).

Instead of deferring my decision with a donor-advised fund, I considered using a donor lottery to avoid it entirely (with high probability). But the lottery block size was small enough that I would still have had a ~50% chance of having to make a decision, which didn’t seem worth it.

It seemed like the EA Grants team made some pretty great grants, but also like they have great funding from the Open Philanthropy Project and Y Combinator.

I thought about (and am still thinking about) finding someone I trust to pick grants for me. That’s essentially what I did last year with the “EA Giving Group” donor advised fund. That fund basically became two of the EA Funds that haven’t distributed funds yet, and I haven’t thought of other good candidates to do this.

Questions for the future

Here are some things I’m thinking about for next year:

Coda: random logistics notes

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sweettea

Cash at end of year: did you consider using a credit card to kick the need for actual money down the road for 1.5 months? I have made my large-limit CC have a closing date of the 27th, so end-of-year donations aren’t actually due to pay for until mid-Feb.

Ben

Good thought! I almost did that, but when you donate on a credit card the recipient has to pay a processing fee (~3%), which would have made it more expensive than borrowing from my housemate (5% annualized).

(I could also have used sign-up bonuses the PayPal Giving Fund to save on fees, but both of those required more lead time than I had when I realized the problem.)


milan

I’ve personally noticed a pretty profound psychological difference between having a very short runway on hand (< 6 months) to having a longer runway (12+ months) that’s reasonably liquid.

Back when I only had experience with short runways, I think I was underestimating the benefit from the psychological effects of a long runway. (Maybe this is the same as Zvi’s slack concept.)

So… speaking from my experience, I’d advocate for maintaining a substantial runway (12-24 months) in a relatively liquid form. (Maybe 6-12 months cash, 6-18 months in stocks or ETFs? Not sure.)

Ben

Awesome, this is a really useful data point! Thanks!