Clarifying the Giving What We Can pledge

By Julia_Wise🔸 @ 2017-02-06T20:07 (+45)

CEA has gotten a lot of questions about the Giving What We Can pledge lately, and we’d like to answer them here. We've also updated our Frequently Asked Questions page and other parts of our website to reflect recent questions. 

What is the Pledge?

This is the Pledge To Give:

"I recognise that I can use part of my income to do a significant amount of good. Since I can live well enough on a smaller income, I pledge that for the rest of my life or until the day I retire, I shall give at least ten percent of what I earn to whichever organisations can most effectively use it to improve the lives of others, now and in the years to come. I make this pledge freely, openly, and sincerely."

What’s the purpose of the Pledge?

Let’s look at this on three levels:

Individual: The Pledge is a tool for people to harness their good intentions and put them into action on a long-term basis. It’s all too easy to mean to donate but never really get around to budgeting as much as you intend to. The Pledge is a commitment device to help members stick to their goal of making giving an important part of their life through the years to come.

Community: When members connect with each other, they can share support and enthusiasm that makes the commitment easier and more motivating. They also keep each other accountable; you’re much more likely to follow through on a commitment you make publicly.

Society: Our vision is a world in which giving 10% of our income to the most effective organizations is the norm. Of course, this doesn’t mean everyone will do it. But we hope to create a culture in which giving effectively, and giving significantly, is a common and accepted thing to do. We believe that being able to point to the Pledge, and to the thousands of people who have taken it, furthers this.

Ultimately, of course, the Pledge is not for the benefit of its members. It’s a means by which we aim to make the world better. 

Is the Pledge just about global poverty?

While the Pledge was originally focused on global poverty, since 2014 it has been cause-neutral. Members commit to donate to the organizations they believe are most effective at improving the lives of others.

Do donations have to be to registered charities? 

The commitment is to donate to “the most effective organizations.” These organizations could be charities, but could also be entities not officially registered as tax-deductible charities (for example a charity in the early stages of getting registered, or an advocacy or lobbying group that is not a charity).

Why 10%?

We chose 10% because it strikes a good balance. It is a significant proportion of one's income, in recognition of the importance of the problems and the need to take real action. But it is also within reach of most people in the developed world. There is also a strong historical connection to the idea of tithing, a tradition in Judaism and Christianity of giving 10% of your income to charity or the Church. Islam has a similar practice (zakat) in which those who are able give between 2.5 and 20% to the needy. The pledge is of course just a minimum. Some members decide to go further than this and pledge to give a higher percentage. To account for possible changes in circumstances, we suggest pledging a baseline percent that would be doable under a wide range of scenarios. So for example, you might pledge 10% or 20% but go beyond that when possible. About a sixth of members report that they donated more than 10% last year.

How permanent is the Pledge? 

The Pledge is a promise, or oath, to be made seriously and with every expectation of keeping it. But if someone finds that they can no longer keep the Pledge (for instance due to serious unforeseen circumstances), then they can simply contact us, discuss the matter if need be, and cease to be a member. They can of course rejoin later if they renew their commitment.

Some of us find the analogy of marriage a helpful one: you make a promise with firm intent, you make life plans based on it, you structure things so that it’s difficult to back out of, and you commit your future self to doing something even if you don’t feel like it at the time. But at the same time, there’s a chance that things will change so drastically that you will break this tie.

Breaking the Pledge is not something to be done for reasons of convenience, or simply because you think your life would be better if you had more money. But we believe there are two kinds of situations where it’s acceptable to withdraw from the Pledge.

One situation is when it would impose extreme costs for you. If you find yourself in hardship and don’t have any way to donate what you committed to while maintaining a reasonable quality of life for yourself and your dependants, this is a good reason to withdraw your Pledge. (Note that during unemployment you donate only 1% of spending money, as described under “Circumstances that change the Pledge” below.)

The other is when you find that you have an option to do more good. For example, imagine you pledged and are now deciding whether to found a nonprofit (which will take all your financial resources) or keep your “day job” in order to be able to donate 10%. If you have good reason to believe that the nonprofit will do significantly more good than the donations, that founding the nonprofit is not compatible with donating 10% of your income, and that you would not be able to make up the gap in donations within a couple of years, withdrawing your Pledge would be a reasonable thing to do. 

The spirit of the Pledge is not to stop you from doing more good, and is not to lead you to ruin. If you find that it’s doing either of these things, you should probably break the Pledge.

We understand that some people have a very strong definition of “pledge” as meaning something that must not be broken under any circumstances. If this is your sense of the word, and you wouldn’t want to take a pledge if there were any chance of you being unable to keep it, you might find that Try Giving on an ongoing basis is a better fit for you.

How often should members donate?

The spirit of the Pledge is to donate on an ongoing basis, rather than letting “donation debt” build up over many years. We check in with members every year and encourage them to log their donations. However, you don’t have to donate on a strictly annual basis. Members who consolidate donations into certain years (for example for tax advantages, or in case of temporary financial hardship) are welcome to do so.

If a member becomes unable to keep their pledged donation percentage for more than a few years, it would be appropriate for them to withdraw from the Pledge. We have made a form where people can officially do this. Former members are welcome to rejoin if they wish.

Circumstances that change the Pledge (and some that don’t) 

Some circumstances change the amount you Pledge:

Students, unemployed people, and full-time parents

Many students, unemployed people, and full-time parents have little or no formal income. But in the interest of all of our members giving what they can, we feel that the spirit of the Pledge requires them to donate at least 1% of their spending money.

We define spending money as money received for the purpose of spending on items such as food, rent, travel, children, or personal items. It does not include spending on tuition fees.

Of course, people who earn some income but depend on other help for their living expenses may choose to donate 10% of their earnings if they want to go above and beyond.

Retirement

People who have retired or partially retired (which we roughly define as having started to draw a pension) can join Giving What We Can and remain members for as long as they continue to donate at least 10% of their spending money (as defined above).

Because the Pledge is “for the rest of my life or until the day I retire,” those joining before retirement can consider their Pledge complete upon retirement.

Couples

Couples who both want to take the Pledge can pledge 10% of their joint income if they wish. Please let us know and we can set up your My Giving accordingly and can list you together on the list of members if you’d like.

However, some circumstances do not change the pledge:

Debt

People taking the Pledge should consider whether they will be able to donate 10% even while handling debt such as student loans or a mortgage. Debt does not change the commitment to donate 10% of income as long as you have a regular income. 

Working at nonprofits

We’ve heard some confusion on this point. While we think direct work can be extremely valuable, the pledge percentage does not change for those working at nonprofits. Those of us who work for nonprofits, even if we left higher-paying jobs to do so, still donate at least 10% if we take the Pledge.

What counts as income?

The goal here is to help members stick to their plan of taking significant action to benefit others. All guidelines about how to crunch the numbers should be thought of as serving that goal.

In general, we define income as your gross salary or wages. For most people, this yields a good approximation of what they would consider their income. In cases where it yields something strange (for example, if your primary income is from contracting and so counting only salary and wages makes it look as if you have no income), a sensible alternative is to use whatever your government counts as your income for tax purposes.

While we have defined income as pre-tax in the past, after speaking with members in a variety of situations we believe there should be some flexibility here.

• If you expect to receive a tax deduction for your donation, we recommend basing your giving on your pre-tax income.

• If you expect to get little or no tax deduction, for example because your country does not offer tax deductions on donations, you may choose to donate based on post-tax income.

Again, we recognize that a simple rule won’t work perfectly for all possible situations, so we encourage members to consider the spirit of the Pledge: using a significant portion of one’s income to benefit others. We are always happy to help think through these decisions if you’d like to contact us.

Should everyone pledge?

While we believe the Pledge is a good fit for most of the people reading this, clearly it will not be the right choice for everyone.

Some reasons it may not make sense to take the full Pledge:

• You have plans to do something very resource-intensive like founding a startup or nonprofit. (Although see Ben West's experience as an entrepreneur while keeping to the Pledge.)

• Your employment or health situation is unstable.

• You expect your student debt to be particularly heavy, so that the years after graduation will be especially financially tight.

• You have family obligations that require much of your money.

Because of considerations like these, some of our own staff have decided not to pledge at this point or have spent years donating before deciding to pledge.

Taking the Pledge is not necessary to be part of the effective altruism community, and no one should feel pressured to join simply to feel that they are in good standing. We recognize the richness of ways that people contribute to this community and to the world, and that the Pledge represents only one of the many ways of taking significant personal action to benefit others. 

Other options

Try Giving lets you commit to give the percentage of your choice for the time period of your choice. You’re still welcome to be part of the Facebook group for Giving What We Can members, attend GWWC community events, and use My Giving to track your donations. For people who don’t want to commit to the full Pledge, this can be a way to keep on-track and motivated.

For entrepreneurs who plan to invest all their money in the business with the hope of earning more later, the Founders Pledge may be a good option. Members of the Founders Pledge commit to donating at least 2% of their personal proceeds upon exit to charity. 

Isn’t this too simplistic to fit everyone’s specific situation?

Making the Pledge better in some ways makes it worse in others. A plan that accounted for every possible consideration in a person’s life would be more equitable, but would also end up reading like a tax code. We believe that the ability to succinctly explain the Pledge to others has great value, and that adding all conceivable loopholes and caveats would diminish that value. In the end we trust members to abide by the spirit of the Pledge, which is using a significant portion of one's income to benefit others.

The Pledge doesn’t (and shouldn’t) encompass all the ways one might do good. We’re excited to see the many ways that people use their time and money for altruistic projects, both through the Pledge and through other efforts.

What should I do if I have more questions?

Please talk to us! We don’t know how to emphasize this enough.

 
Julia is Community Liaison at the Centre for Effective Altruism. Giving What We Can is a project of the Centre for Effective Altruism.