I read this interview with Abigail Disney recently, and it was interesting enough, but one thing really struck me. At one point, she discussed how she had considered giving away all her money when she was young, but didn’t, because she was afraid that she wouldn’t be able to make it in the world (nice honesty). What struck me is that she then follows up by saying
Now I’m glad I didn’t give it all away, because my money has grown. Now I’ve given away so much more than I inherited.
She goes on to talk about how she feels more effective now, smarter, etc., and I think this makes sense. If I were super rich, I think I would enjoy giving away money at a rate that allowed me to keep doing it for my whole life, both as a hobby, and because I think I’d get better at donating to impactful things. If I gave it all away in my 20s, I’d probably regret that later, since (contrary to lots of popular culture…) I don’t think we’re at our best in our 20s when it comes to making decisions about how the world can best be improved.
So why did that phrase impact me so much? It impacted me because my first thought was “oh, yes, that makes sense, you can give away much more total money in life by allowing it to grow at the market rate in the US than if you gave it away all at once,” and that was dumb of me, essentially ignoring the “moral interest rate” of donating earlier. I think it is fair to want to do it as a hobby, or even to want to donate in a way that allows you to remain super rich because you like being rich (yay freedom), but we should not forget that someone in need is not receiving that money now as a result. Even aside from the moral value, creating economic growth by helping people become economically productive would surely have a good rate of return, wouldn’t it?
This took me down a rabbit hole of thinking about charitable giving and investing in the developing world via charity. I think most people (myself included) would dislike the idea of buying “de-wormed / malaria-free child futures,” but that would be a way to accurately price the value of a charitable gift. One could invest in the economy of the country where their charity is deployed, but there is other risks there, since most countries that are good targets for charity are not places where it is easy to make an investment, especially if the plausible investor does not want to support that nation’s government. I don’t have a solution to that.
I read another piece, somewhat unrelated, that discussed how Paul Allen had not, despite massive charitable giving, managed to give away money faster than it grew.
If you know a lot about this topic, please email me your thoughts!
If you are inspired to donate money, I recommend Give Directly, since donations to them fund both research in the field, and direct cash transfers to the extremely poor.