Beyond the assumption that humans are rational (with Barry Schwartz)
Barry Schwartz, an emeritus professor of psychology, discusses how individuals can multiply their charitable impact by focusing on evidence-based giving and expanding their moral circle. He introduces the 10% pledge as a commitment mechanism and a way to inspire others.
Deep Dive Analysis
16 Topic Outline
Introduction to Effective Giving and Impact Multipliers
Comparing Make-A-Wish Foundation to High-Impact Charities
The Problem of Misaligned Incentives in Charity
The Role of Independent Evaluators in Effective Giving
Principle 1: Giving Where Money is Most Needed
Principle 2: Using Evidence and Independent Evaluations
Principle 3: Considering Cost-Effectiveness
Principle 4: Expanding Your Moral Circle of Concern
Principle 5: Leveraging Multiplier Effects
Applying Principles to Animal Welfare and Climate Change
How to Inspire Others to Give Effectively
The 10% Pledge: A Personal Commitment
Reasons to Take the 10% Pledge
Who the 10% Pledge is Not For
Measuring the Impact of the 10% Pledge
Final Thoughts on Taking the First Step in Giving
5 Key Concepts
Effective Giving
Effective giving is the practice of donating money to charities that are proven to do the most good per dollar, often by focusing on evidence-based interventions and considering factors like cost-effectiveness and the scale of impact. It aims to maximize the positive outcomes of charitable donations.
Three Buckets of Spending
This mental model separates personal finances into three categories: spending on oneself for a good life, spending on causes one is passionate about (e.g., local community), and spending on evidence-based, high-impact charities. This approach helps individuals allocate resources to different values without feeling conflicted.
Moral Circle of Concern
This concept refers to the scope of beings or groups whose well-being an individual considers morally relevant. Expanding one's moral circle beyond immediate family or country to include people in low-income countries, animals, or future generations can significantly change where one's charitable giving can have the most impact.
Multiplier Principle (Leverage)
This principle in effective giving focuses on maximizing impact by influencing larger actors or inspiring others. Examples include advocating for government spending on effective interventions or motivating friends and family to also give effectively, thereby multiplying one's own direct impact.
10% Pledge
A personal commitment to donate 10% of one's lifetime income to charities that can do the most good, according to one's own values. It is a flexible commitment that can be adjusted over time and is intended to serve as an accountability mechanism and a way to inspire others.
8 Questions Answered
Many people can do over 100 times more good by reflecting on their values and becoming aware of highly effective giving opportunities. This involves applying principles like focusing on where money is most needed, using evidence, considering cost-effectiveness, expanding one's moral circle, and leveraging multiplier effects.
While Make-A-Wish does good, the cost of granting one wish ($10,000) could save two children's lives from preventable diseases in low-income countries ($5,000 per life saved). This highlights the principle of giving where money is most needed, as basic needs are often unmet in poorer regions.
The charitable market is often inefficient because donations are driven more by a charity's ability to persuade donors (e.g., through marketing and emotional stories) rather than by their actual effectiveness in delivering value. This can lead to money going to charities with better marketing rather than those with the most impact.
The five principles are: considering where your money is most needed, using evidence and independent evaluations, focusing on cost-effectiveness, expanding your moral circle of concern (e.g., to animals or future generations), and considering multiplier effects (e.g., influencing government policy or inspiring others).
The 10% pledge is a personal commitment to give 10% of one's lifetime income to wherever one believes it can do the most good. It's a flexible commitment, allowing for varying annual contributions, and is intended to be a personal accountability tool and a way to inspire others.
People take the pledge for three main reasons: accountability (as a commitment device), enhanced giving experience (making giving more fun and less stressful), and the ability to inspire others, thereby multiplying their overall impact.
The 10% lifetime income commitment might be too much for many people, especially those not in the top global income distribution or facing significant financial challenges. However, a trial pledge with a lower percentage or shorter duration is available for those who want to start smaller.
Yes, the pledge is a serious commitment, but it's not unbreakable. Similar to marriage, there might be justifiable situations (e.g., major life changes, shifts in values) where someone might need to de-pledge, and there is an online process to do so.
29 Actionable Insights
1. Allocate to Three Giving Buckets
Divide your spending into three categories: personal needs, passion-driven causes, and evidence-based, high-impact charities, aiming to allocate some funds to the third bucket even if you currently don’t. This helps acknowledge multiple values without guilt.
2. Combine Principles for 100x Impact
Achieve a 100x or greater increase in your charitable impact by applying multiple non-overlapping principles of effective giving, such as directing funds to high-need areas and leveraging independent evaluations.
3. Start with Evaluator Recommendations
For the easiest and most immediate increase in charitable impact, begin by following the recommendations of established impact-focused evaluators, as their research often integrates multiple effective giving principles.
4. Rely on Independent Evaluations
Base your giving decisions on independent evaluations from impact-focused evaluators and grantmakers, as this provides a significant step up from relying on gut feelings or marketing.
5. Direct Funds to High-Need Areas
Shift charitable resources from areas with abundant existing resources (e.g., high-income countries) to those with fewer resources (e.g., low-income countries) to maximize impact on basic needs like preventable diseases.
6. Incorporate Cost-Effectiveness
Always consider the cost-effectiveness of interventions by including the “denominator” (cost per unit of good) in your calculations, as this can dramatically shift your perspective on which actions are most valuable.
7. Expand Your Moral Circle
Reflect on and potentially expand your moral circle to include other beings (e.g., animals) or future generations, as this can reveal new, highly leveraged opportunities to do good.
8. Seek Multiplier Effects
Prioritize interventions that leverage larger actors or systems, such as influencing government spending or policy advocacy, as these can multiply your impact far beyond direct individual contributions.
9. Inspire Others to Give
Recognize that inspiring others to give as much as you do can double your impact; your personal giving might be less impactful than the collective giving you motivate in others.
10. Commit to Lifetime Giving Pledge
Consider taking a personal commitment, such as the 10% pledge, to donate a percentage of your lifetime income to causes you deem most impactful, as it serves as a flexible yet serious commitment device.
11. Use Pledges for Accountability
Leverage a giving pledge as a commitment mechanism to hold yourself accountable to your charitable intentions, similar to how committing to a marathon motivates training.
12. Enhance Giving Experience
Improve your giving experience by taking a pledge, which transforms giving from a trade-off decision into an exciting annual allocation of pre-committed funds, fostering a sense of purpose and community.
13. Overcome Giving Decision Paralysis
Use a giving pledge to simplify the decision-making process, pre-committing to an amount and freeing yourself from annual stress over how much to give and where, making giving a consistent practice.
14. Embrace Giving as Identity
For those who value rituals and routines, adopting a giving pledge can establish a meaningful identity as a “giver” and connect you to a community of like-minded individuals.
15. Start with Trial Pledge
If a lifetime commitment feels too daunting, begin with a trial pledge, choosing a smaller percentage of income and a shorter duration to comfortably explore effective giving.
16. Utilize Lifetime Pledge Flexibility
Understand that a lifetime giving pledge allows for flexibility, meaning you don’t have to give the exact percentage every year but aim for the total over your life, accommodating varying financial situations.
17. Understand De-Pledging is Option
Recognize that a giving pledge is not an unbreakable vow; there is an option to de-pledge if significant life changes or shifts in values make it justifiably impossible to uphold.
18. Consider Public Pledging
Make your giving pledge public to inspire others, as your visible commitment can encourage friends and family to also engage in effective giving.
19. Beware Marketing-Driven Giving
Recognize that charitable giving is often swayed by marketing rather than actual impact; prioritize charities with strong impact evaluations over those with slick marketing.
20. Look Beyond Surface Impressions
Don’t judge a charity’s effectiveness by its website or marketing quality; instead, delve into independent evidence of their program’s impact, as highly effective organizations may lack strong marketing.
21. Support Focused Interventions
Favor charities that specialize in a few highly effective interventions (e.g., delivering bed nets) rather than those with many programs designed to tell a “full story,” as specialization often leads to greater impact.
22. Evaluate Total Impact
When assessing charities, consider the total money invested versus the total impact generated, ensuring that marketing and overhead costs don’t disproportionately consume donations without delivering commensurate outcomes.
23. Separate Giving Decisions
Separate the decision of how much to give from where to give; this allows for more focused attention on identifying and selecting the most effective charities.
24. Share Giving Experiences
To inspire others to give effectively, share your personal giving experience and motivations, then genuinely ask others about their thoughts and values, fostering connection rather than preaching.
25. Understand Others’ Values
When discussing effective giving, prioritize understanding what others intrinsically care about rather than imposing your own values, as this approach is more effective for long-term engagement and finding common ground.
26. Prioritize Life-Saving Interventions
When donating, consider that $5,000 can save a child’s life from preventable diseases like malaria, which may yield significantly more impact than improving one child’s life for $10,000.
27. Re-evaluate Animal Welfare Donations
Consider that $3,000, which might care for one cat or dog for a year, could instead improve the lives of 30,000 factory-farmed chickens by supporting lobbying efforts against caging, offering a massive multiplier in suffering reduction.
28. Consider 10% Giving Target
The 10% giving target is often significant enough to make a real difference yet doable for many in high-income countries without drastically reducing their quality of life.
29. Donate to ACE Fund
To maximize your donation’s impact in animal welfare, contribute to Animal Charity Evaluators’ recommended charity fund, especially during matching periods, as it supports high-impact groups.
5 Key Quotes
I think a person, I think, can do 100 more times good with their money than they currently do.
Shier
The market, the charitable market, if you will, is not very efficient because what's ultimately driving us to give is whether a charity is able to persuade us that we should give to them rather than whether they're actually delivering value to who they're trying to help.
Shier
It turns out making a beautiful website has nothing to do with making an effective charity at its core if you're really just talking about making interventions that really work.
Spencer Greenberg
The biggest improvement really is not in getting people from everyone down from like spending 100% on themselves to maybe spending 20% on themselves and 80% on other things. I think there's so much to be gained from us just starting to even spend in that third bucket at all.
Shier
I think the idea of giving 10% to where it can be used a lot better is generally very appealing in my experience to people. Like, that's a good thing to exist. I have hardly ever heard someone say like, oh, no, you shouldn't do that. It's a really bad idea to give 10%.
Shier