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Comment by clarkm | Hacker News Reader

At a similar event on Efficient Charity at the Berkeley Faculty Club, Robin Hanson made some interesting (and unsettling) points about how most charities operate. [1] For example, he claims that most charitable contributions are actually about status signalling and not about maximizing impact. Because if someone truly wanted to do the Most Helpful Thing, they would save all their money and donate a single lump sum to a single charity right before they die. This strategy leverages compound interest while avoiding certain tax pitfalls, but has the downside of making you look selfish for most of your life.

Scott Alexander has a pretty good summary [2] of the event if you don't want to listen to the audio.

[1] http://www.overcomingbias.com/2013/04/more-now-means-less-la...

[2] http://slatestarcodex.com/2013/04/05/investment-and-ineffici...

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There's a lot to say about Robin Hanson's argument, and I don't think it's as clear-cut as he makes it out to be, e.g. there are critical comments in this thread:

http://lesswrong.com/lw/h3q/a_rational_altruist_punch_in_the...

I wish he wouldn't try to figure out what hidden motive prevents people from following his strategy before it's even been established as the best strategy.

An interesting idea, but I think this argument leaves out an important fact: money in the present is more useful than money in the future. This is often captured in accounting by use of a "discount rate". A pretty conventional number is 10% per year: waiting an extra year to receive some money makes it worth 10% less, all else equal. Comparing a typical interest rate and a typical discount rate, I would conclude that you should donate now.

Furthermore, if this is really the best way to do charity... well, charities could just invest the donations they receive and cash out when the time is "right". But since organizations don't die, when would that ever be?

Lastly, the idea that you should invest in a single "best" charity entails the idea that your donation is too small to make much difference in which charity is best. But some problems have already been solved! More problems will surely be solved in the future. It seems that charities could face diminishing returns -- like most other investments -- so your most effective strategy should sometimes be to split among more than one. Especially if you have followed the advice to invest for your entire life, and you do have a huge sum to donate.

In addition to a status signal, charities are also massive tax shelters. All around it is just a way to funnel money out of the government's hands, as most charitable donations would otherwise have been taxed by the government as excess capital or income.

The USA has so many structural problems that sometimes I find it ironic that people are so obsessed with solving third world problems. In a way, due to the massive global influence of the US, solving a big problem here (e.g. militant foreign policy) can lead to incredible improvements in the lives of hundreds of millions across the world. Conversely, if US foreign policy is dictated by warmongers, hundreds of millions suffer war and famine for decades.

As Aaron did [1], please read Noam Chomsky then decide in which order to address first and third world problems.

1. http://www.aaronsw.com/weblog/epiphany

That is absurd. Charities know about interest rates. If that is the best way to use money (and you choose an effective charity) that is what they will do. But the fact is they can get better returns now by either spending your money on fundraising/awareness or by having real impact now.

Spending money on achieving their goals in the present is not only what they are for but will also reduce future costs. Prevention is better than cure.

Also there are problems that need solving now. If the current generation of philanthropists all wait until they die then there will not be enough money to solve problems that exist in the present.

Why would you think that you know how to use money to achieve a goal better than an organization built around that goal?

"If that is the best way to use money (and you choose an effective charity) that is what they will do."

There are actually a lot of legal constraints on charities that make "invest the money for decades and then spend it" not work well for them. If you think this is what makes the most sense at this point you pretty much need to do it yourself, potentially with a donor-advised fund.

"Prevention is better than cure."

Sometimes. There are tradeoffs, and depending on what you're working on either can be more efficient.

(I agree with your bottom line, that giving money now is important, but for different reasons.)

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