I've never lived in New York on $40,000/year, but I imagine that I would be constantly stressed and unable to think of other people's needs. That might be more than what 95% of the human population earns, but expenses are also higher for people in New York than for 99% (a guess) of the human population.

Assuming no sort of family/support network, that would be really hard. What sort of housing/medicine/food/clothing/lifestyle can a person afford in New York on 40k per year?^[1] $40,000/year in Oklahoma City might be fairly comfortable, and in Chengdu or Chennai or Cairo it might be a very comfortable lifestyle, but in New York it would be... quite a bit less comfortable. It might not even be a living wage.^[2]

I'm guessing that many of the people who are able to donate 10% (or more) while having good salaries would find it really hard to keep doing that if they lived at that standard (the standard of living that a 40,000 USD pre-tax income in New York City allows). Is it possible, and would some do it? Yes, there are some paragons of virtue who would be able to make that work. But for most of us, I think that would be too challenging.

1. ^{^}

   In this scenario, if we aren't crashing on a friend's/relative's sofa, and we can't afford university education or similar training, and we don't know about the local networks (like Buy Nothing Facebook groups or Freecycle communities)

2. ^{^}

   Although depending on the sacrifices you are willing to make, you would probably live on it. There are certainly people in New York City that survive on that amount or less per year.

I think that you are asking the wrong question. The role of organizations such as ours is not to set the most ambitious standard, but rather to influence as many people as we can to give to the nonprofits we recommend. 

Your article presents a critique of the go-to-market approach of The Life You Can Save, and then a comparison to the go-to-market approach of Giving What We Can, which you state you prefer as it is more ambitious. Let’s explore this a bit…

The Life You Can Save is actually 2 things: 

1. A book in which Peter Singer presents an argument that in order to live an ethical life we have a moral obligation to help those suffering and dying unnecessarily from the effects of extreme poverty 

2. An organization that has been working to influence as many people as possible to help those living in extreme poverty for the past 10+ years, and has raised more than $100M for effective nonprofits working to lift people out of poverty.

When it comes to recommendations for the level of giving, I would argue that Peter sets the most ambitious target of anyone when he argues that “in order to be good people, we must give until if we gave more, we would be sacrificing something nearly as important as the bad things our donations can prevent.” One important point here is that in the book The Life You Can Save he is arguing the case for giving to help those suffering from the effects of extreme poverty only, and not including giving to fight climate change, animal welfare or other causes that donors may hold dear. The book is a call to action written to raise awareness and compel everyone living with enough financial means to buy things that are not necessities, that not only do we have the ability but the obligation to end extreme poverty. Peter sets this moral ambition, but recognizes himself that this standard may not be attainable for many and may actually deter some to give, and thus he writes: “I propose a much easier target: roughly 5% of annual income for those who are financially comfortable, with less for those below that level, and significantly more for the very rich. My hope is that people will be convinced that they can and should give at these levels. I believe that doing so would be a first step toward restoring the ethical importance of giving as an essential component of a well-lived life. And if it is widely adopted, we’ll have more than enough money to end extreme poverty.”

Now, as an organization working to raise funding for our recommended nonprofits we need to decide how we ‘go-to-market’, meaning how we craft a strategy and business plan to achieve our objectives. Our mission is to lift people out of poverty by changing the way people think about and donate to charity. There are several considerations for why take the approach we do:

• We are focused solely on helping those in extreme poverty, and as such we need to work to overcome standard objections donors may have, the main one being why they should give offshore versus locally. As such we take the position that donors should take a portfolio approach to giving, meaning they should give with their head and their hearts and allocate their philanthropic budget across multiple causes that resonate with them. We are actively working to educate donors to the benefits they themselves would experience if we raised the minimum quality of life in the world, and thus inspire everyone to give some percent of their giving to lift people out of extreme poverty in an effective manner.
• We commend all giving and at all levels, and believe that donors are on an impact journey that will last a lifetime and as such, we need to meet donors where they are and support them to start, encourage their progress and continue to educate them as they expand their giving and thus their impact. Some donors may be deterred by calls to action with high thresholds, so we encourage people to start with any amount. Even a one-time $10 donation can go a long way, particularly when pooled with other resources and given to our Maximize Your Impact Fund, which is actively managed by our research team who determines where funds are deployed based on immediate funding needs of our recommended nonprofits in order to optimize the impact of donations on behalf of donors. In our view it’s important to encourage donors to just start, and then build from there.
• There is strong consensus among behavioral change experts that setting small, achievable goals is an effective way to change behavior. While not the only strategy, as the success of the Giving What We Can Pledge demonstrates, it is still considered highly effective in creating long lasting behavior change driven by: boosting self-efficacy when an individual achieves goals and believes in their ability to do so, creating habits as small changes are easier to incorporate into daily life, reducing the overwhelming nature of trying to achieve a highly ambitious goal, creating positive reinforcement when a person has consistent success in achieving goals and the power of incremental progress which creates a sense of momentum that can drive more significant change over time. 

All of these factors have influenced our approach to messaging and donor engagement. We are working every day to continue to find the most successful tactics in influencing donors to join us on our mission and achieve our vision of a world with no global poverty. 

Giving What We Can bases their ‘go-to-market’ approach around their 10% pledge, and we are so inspired by the work the team there does, and by the approximately 9,000 people who have taken the pledge. We do not disagree that their pledge is more ambitious than our recommendation at certain income thresholds, by design, and we hope that they continue to have success in not only inspiring people to sign the pledge, but to stick to it and move money to effective nonprofits. It would be worthwhile to note that they also have stated in their recommendation “if 10% doesn’t yet seem achievable, consider starting with a Trial Pledge (where you choose a custom amount of 1% or more and your own time commitment), or donate to effective charities without taking a pledge" in order to be more inclusive of donors who may not yet be ready to commit to a 10% giving threshold.

I hope this helps you better understand the reasoning behind our approach. 

The problem(s) we are collectively working to resolve (The Life You Can Save with extreme poverty, and Giving What We Can across multiple cause areas) are massive, and include trying to influence everyone in the more affluent parts of the world, and as such we believe solving these problems will require many varied approaches across many organizations targeting different and diverse audiences. It’s best we find ways to work together, learn from each other and support each other, versus pushing a singular approach into the market. 

Just a note: In a recent update we removed the The Life You Can Save pledge from our website for internal business reasons. Some of our supporters have specifically asked for the calculator to be available to them and so we have allowed access to the pledge through direct link only. It is no longer accessible through our website navigation.
 

Thank you,

Jessica, co-CEO The Life You Can Save

Incidentally, the formula seems to be:

first $40K: undefined

$40-80K: 1% of total income (including the first $40K)

$80-$200K: 1% of first $80K, then 5% of remainder up to $200K

$200-320K: $9,760 (as calculated above) then 10% of remainder up to $320K

$320-$480K: $21,670 (as calculated above) then 15% of remainder up to $500K

$480K-$?: $45,760 (as calculated above) then 20% of remainder 

[didn't input higher numbers, except that inputting a gazillion spits back a 50% recommendation]

[This crosses 10% just above $500K]

My initial reaction was that one could make a smoother curve for the marginal contribution rate. But playing with the numbers, the rise in total percentage recommended looks fairly smooth and continuous (albeit less so around the $80K boundary). So maybe the increase in legibility for a bracketed system outweighs a theoretically smoother formula. But I'd at least consider something like a 3% bracket from ~$60-$100K if I were reworking this (without a desire to change overall recommendations very much).

MHR @ 2024-08-22T00:08 (+6)

I believe the values come from the 10th anniversary edition of the TLYCS book. They should be in the FAQ on the website and I'm surprised they're not. 

Jason @ 2024-08-22T01:12 (+8)

The website links to the FAQ for info about the calculation method, but I didn't see the info there.

The 10th ed. was copyrighted in 2019, and US wage levels rose about 18% from 2019 to 2022 alone. So these cutoffs were even less demanding in 2019 than they are today; the 81K cutoff for asking more than 1.00% might be close to 100K in mid-2024 wages.

Vasco Grilo🔸 @ 2024-08-22T09:25 (+4)

Thanks for the valuable context, Jason and MHR!

I second that the recommendations could be more ambitious but mostly the calculator feels way too simple because life situations can vary so vastly between people within a country and income group. 

In the calculator, I fall below their 1% recommendation while living in Finland, but I believe I could donate 25% "without undue hardship". On the one hand, this is unrealistic or at least not financially smart in the long run for many with higher living costs. On the other hand, I have friends who I think would be fine donating an even larger share if they had the income I have.

So, the calculator is, in my opinion too simple to give any meaningful recommendation.

Thanks so much for this super interesting post and discussion. I love that its Vasco raising this discussion as I think he has some personal integrity here "I personally currently donate everything above a target level of savings." - he's an example of someone who doesn't necessarily earn a huge amount, and donates a lot (seen on previous posts/comments).

Here are some cold takes

1)  When it comes to giving, I find less well off people giving small amounts humbling and powerful. I ascribe to something like "widows mite" theory. Jesus sees a poor women offer a tiny amount of money, and after people laugh at her seemingly meagre offering, he says "The plain truth is that this widow has given by far the largest offering today. All these others made offerings that they’ll never miss; she gave extravagantly what she couldn’t afford—she gave her all!”"

Of course she hasn't done "more good" from a utilitarian standpoint than the billionaire giving billions, but (the way I see it) she gave the morally larger offering, given her situation. I also think (like Vasco) when less well-off people give, it can really convict those of us who have more to give more as well.


2) As much as I love this post and we have a beautiful bent here towards numbers, personally I don't think an empirical approach is going to necessarily lead us to clear answers here because there are many ways to think about how we give and so many subjective value issues around our lifestyle and savings. This is how I think about it...

1) How much do I earn?
2) How much do I use to live day to day?
3) How much do I save?

On a really basic level Giving = Earning - (Spending + Saving). Most people don't have that much control about how much they earn, so how much they give comes down to their lifestyle and savings norms (assuming they are optimising somewhat for giving). So then there are different ways of approaching the equation

 I LOVE Vascoes approach of setting a celing for his Spending+Saving total - then giving the rest. For me this is a super noble approach and makes logical sense. Even if we end up failing at meeting this noble goal, we'll at least notice the almost inevitable "lifestyle creep" and check it as much as we an. I also like his suggestion above of increasing percentage giving with higher incomes, which allows people to drastically increase their daily use and savings while also giving a lot more. Our approach is less numerical - its basically to live simply, not save much and give the rest (not much at all on our income) away. I think its usually good practise to be honest with ourselves about our approach to giving, and make active decisions about lifestyle and savings.

I really like that Giving what We can suggests a lower percentage for people who earn less and I understand why they picked a number as it is concrete and challenging (1%). I also agree with Vasco they could perhaps be more ambitious. I've got mixed feelings about a calculator - maybe it is the optimal approach for some, but I feel like some people on 70k a year can give 30k just fine and this should be encouraged, applauded and even normalised. Maybe a diverse range of giving approaches could be discussed? Especially among EAs I think we could aim to do better than 1% at that salary range, and I've met many wonderful people that do.

3) These thoughts are coloured by my Ugandan experience. My colleagues give a huge amount to friends, family and church despite not earning very much. Our nurses start on $140 a month and live in 1-2 room apartments with power but no running water. I want to do a proper survey, but I suspect our nurses give betwen 10% and 30% of their income to support their relatives education and basic needs. This isn't the "most effective" use of money, but there's decent evidence sponsoring individuals education and basic needs works and I believe this support is far more cost effective than most NGOs here. We even support some kids with school fees here because it is both a bit effective and an important social norm/glue - its just "what you do" here if you have more than enough.

On this backdrop I find the "life is hard  for people earning 40k in New York" thing a little hard to stomach, although I get its a different thing (point 4). 

4) "Yes, there are some paragons of virtue who would be able to make that work." - Although I understand the sentiment, but I don't think people need to necessarily be a "paragon of vitrue" to live simply in shared housing (or with family), wear second hand clothes and not eat out that much - basically eschewing a few social norms in order to free up the money donate 10% or more. Students often have great lives living pretty simply, but then rapidly increase spending after getting jobs because they can, while not necessarily getting a whole lot happier. I think people might be "constantly stressed" and feel pressed for cash in America at low and middle incomes because that is the cultural norm around lifestyle, not because life is genuinely impossible or even that hard to manage at lower incomes. Almost 90% of teens in America have IPhones that cost almost $1000 dollars, when a $250 phone would do almost exactly the same thing, with slightly worse photos. This obviously includes the majority of kids who's parents have low incomes or no income. What kind of norm does that set?

Looking back at the comment some of these observations might seam a bit "soapboxy" or even harsh, am not judging anyone here at all - the struggles at low income to make ends meet are real all around the world as is the struggle to meet cultural expectations.

There's also the consistency angle here. If I'm a well-to-do American who donates 10%, it seems wildly inconsistent for me to call on similarly situated people making $40K a year (much less those in extreme poverty!) to do the same. I don't see a plausible model of shared sacrifice that would make those consistent.

I'm aware that GWWC has a flat 10% pledge, but as far as I know it was originated by middle-class people who didn't specifically have people significantly less well off than they in mind. Whatever the relevant merits of a flat vs. graduated pledge, TLYCS has opted for the latter ~ and its recommendations will be viewed in that light. With a flat pledge ask, there's at least some implied understanding that you're making a moral claim under most, average, or ordinary circumstances.

That is not to necessarily endorse TYLCS' very gently upsloping curve.

Maybe we should base the norm/standard on something like disposable income rather than income? The suggestions for how much to donate based on income can serve as rough guidance, but probably shouldn't be interpreted very strictly, since the same income in different places ends up looking very different.

The TLYCS calculator / pledge is specifically recommending an amount toward "organizations effectively helping people in extreme poverty." The resultant amounts are easier to work with for people who also want to donate to non-effective or non-poverty organizations (e.g., because they object to the1 idea of free-riding on others in their community by not giving in addition to receiving).

So one's reaction to the size of the recommendation will be influenced, to some extent, by whether this sum is assumed to be all of the donor's philanthropy or perhaps a third of it.

I do think that calling US people to at least the US average -- which IIRC is about 2-3 percent and not that correlated with income? -- would be hard to criticize as too demanding for the vast majority of US incomes. Maybe a higher number would be as well, but this one has the virtue of feeling more "objective" than made up out of thin air.