Why Are You, an Effective Altruist, Donating Money to Charity?
By Nicholas Decker @ 2025-07-03T17:08 (+7)
This is a linkpost to https://nicholasdecker.substack.com/p/why-are-you-an-effective-altruist
I discuss the merits of donating money now versus saving it and donating it later. Some conclusions: if aid is more targeted, then the optimal path of saving is determined by the ratio of the interest rate and the curvature of the utility function. If it can be targeted, then it is determined by your expectations around whether economic growth will be broadbased to always include poor people. If you believe this, then it is optimal to save your donations, and only donate the interest.
akash 🔸 @ 2025-07-03T23:12 (+10)
Sounds like patient philanthropy? See @trammell's 80K episode from four years ago.
trammell @ 2025-07-04T01:21 (+9)
It does :) This may also be relevant.
I don't see the justification for donating the interest. If we think the marginal utility of the poor will fall more slowly than the interest rate, as it typically will if the poor (and others spending on them) discount the future and are aware of how much consumption they'll have in the future, then it's optimal to save everything including the interest, until the two are growing at the same rate.
Michael St Jules 🔸 @ 2025-07-03T23:44 (+8)
It seems likely to me that donation opportunities will become less cost-effective over time, as problems become increasingly solved by economic growth and other agents. For example, the poorest people in the future will be wealthier and better off than the poorest people today. And animal welfare in the future will be better than today (although things could get worse before they get better, especially for farmed insects).