Usually, I'm someone who advocates giving now. However, this year, I've decided that I want to save a large portion of what would have been my donation, though I will still donate a little bit to GiveDirectly in order to stay in the habit of donating and show commitment. This is for a few reasons:

(a) GiveWell's top charities seem underwhelming this year. Also, I'm nervous that none of them have room for more funding because of Good Ventures having more in assets than GiveWell's combined room for more funding estimates (I've emailed GiveWell about this concern).

(b) Several organizations (GiveWell, CEA/80K, EAA, and perhaps some others) seem poised to make strong cases for my donations soon (for example, studies on vegetarian advocacy coming out soon, 80K's case studies coming out soon, GiveWell labs coming out soon, etc.) and I expect the value of my donation to jump pretty dramatically within a year.

(c) as a student, I still don't have access to donor matching programs or significant tax breaks, so these aren't factors for me.

(d) I'm graduating this year and I don't yet have a good estimate of how much I'll need to keep in savings versus how much I can afford to donate.

(e) my stock portfolio is getting good returns right now.

Thoughts?

I'm also generally saving this year. I'm also not persuaded by GiveWell's recommendations, but mostly I want to see what Animal Ethics comes up with.

I recently saw Elie speak and asked him afterward that very question with respect to Good Ventures. He said many at GiveWell are saving and not donating because of this very concern.

(a) through (d) seem like good reasons to postpone giving. I'm not sure that (e) has any relevance, since past performance is not an indicator of future results. The last time I checked, most market prognosticators were predicting long-term real returns of less than five percent a year.

If you (1) have a substantial amount of long-term capital gains, (2) qualify for zero-percent capital-gains rate in 2013, and (3) expect to pay a marginal tax rate of at least 25% in 2014 (roughly, you made less than about $37k in 2013 from working and you expect to make more than that in 2014), you may want to sell all the securities that have long-term capital gains before the end of this year. By doing this you'll reduce the amount of capital-gains tax you'll have to pay in the future. I just remembered that Brian wrote about this already.

I don't understand how GiveDirectly could ever run out of room for funding. That's almost like saying, sorry guys, we can't find any more poor people on the planet.

Hedonic Treader wrote:I don't understand how GiveDirectly could ever run out of room for funding. That's almost like saying, sorry guys, we can't find any more poor people on the planet.

They're still limited in their capacity to move money. They can only move so much money at a time.

I've now written up my rationale in more detail on the Effective Altruism blog.

As Pat said, (e) is not a good reason because future returns are basically statistically independent of past returns (except maybe via small, indirect implications about adjustments to the risk-free rate or something?). If this weren't the case, investors much faster than you would have already taken advantage of the opportunity.

I like your latest post.

Brian Tomasik wrote:As Pat said, (e) is not a good reason because future returns are basically statistically independent of past returns (except maybe via small, indirect implications about adjustments to the risk-free rate or something?). If this weren't the case, investors much faster than you would have already taken advantage of the opportunity.

This does make sense. I do think a portion of it makes sense, though. As I don't currently manage my own investments or know much about investing, I have a prior on "how much I can expect to make in interest" that may or not be informed, and it's affected by seeing actual evidence of return rates from the real world. So I do think I can end up expecting higher returns than I did otherwise. But it's still probably not a good reason.

In other news, I wrote a follow up essay: "When Do I Expect Good Giving Opportunities to Improve?"

peterhurford wrote:As I don't currently manage my own investments or know much about investing, I have a prior on "how much I can expect to make in interest" that may or not be informed, and it's affected by seeing actual evidence of return rates from the real world.

Sure. It can quickly be shielded off by additional data, though. Historically US return rates have been >10% per year, but as Pat says, people think this will decline in the future. One reason is that the US has been an outlier in terms of its abnormally high investment returns compared with other countries.

Pat suggested <5% real returns in the future, though combined with 2-3% inflation, this is like 7-8% nominal.

i've been saving lately. but in no way is it in line with my utilitarian beleifs. i don't know what i'm doing. i used to be so good, but seem to have lost my way. i know its wrong.

i don't understand your agruments for saving rather than donating. eg donate to unicef now and invest in the wellbeing of others, that investment will pay off, you'll be nurturing and encouraging your utilitarian actions, etc. or by not donating the suffering escalates, incuring greater costs of recovery, and you're encouraging an attitude of procratination and selfishness. personal wealth is a sin in the face of cheaply fixable, non-productive and needless suffering.

isn't this just a bit of over rationalisation of something rather simple in order to avoid guilt?

forgive me if i'm way off, i don't know what your beleifs are and i'm perhaps projecting my own problems onto others.

Welcome, Andy!

I think your situation is different from ours. I think some of us would be tempted to donate more now, because it feels good to donate, but we hold off because it seems likely we can choose better options later. When your uncertainty about the best choice is really high, waiting makes sense. In Peter's case, he also thought the quality of donation opportunities themselves would improve.

If you think that not donating now will jeopardize your donating at all, then it's a good idea to donate now! I'm not sure UNICEF, etc. is the best place to donate, but that's a separate question. Glad to discuss more if you're interested.

One of the reasons I save, is that it also keeps my mind more open to radically new ideas. For example, if I would have donated a significant amount of money to some wildlife conservation charity (I thought about that a lot), it would have been much more difficult for me to accept the idea that wild animals suffer more than they are happy.

That's a good point, tired_time. It can be especially hard to switch if you have personal relationships with the existing charities (which will be the case if their donor-development teams are good and you donate a lot of money).

Brian Tomasik wrote:Historically US return rates have been >10% per year, but as Pat says, people think this will decline in the future. One reason is that the US has been an outlier in terms of its abnormally high investment returns compared with other countries.

Really? I seem to remember from A Random Walk Down Wall Street that European developed markets (e.g. Germany, UK, etc.) have gotten higher returns than the US market in recent years. I may be mis-remembering though.

Michael Dickens wrote:Really? I seem to remember from A Random Walk Down Wall Street that European developed markets (e.g. Germany, UK, etc.) have gotten higher returns than the US market in recent years. I may be mis-remembering though.

This section lists some reasons Pat's claim might be true, though I don't have enough expertise to evaluate further.

What's your current plan Peter?

My current intuition is that my money is best saved to leverage high-impact projects that I more uniquely have access to, like a study of vegetarian advocacy or helping Charity Science start out. I think the money is also useful if I want to start passive income projects or start-ups.

I do intend to fully complete my 10% GWWC pledge, though. Whatever remains of money I haven't donated by the end of the year will be donated to GiveWell's top charities according to whatever split I think best at the time.