Charity giving: how to do good in 2021 while social distancing

If, like me, you work in the tech industry, you might be struggling to reconcile two facts. On the one hand, 2020 was a pretty awful year: we had a pandemic with lockdowns everywhere, intense wildfires and storms exacerbated by climate change, rightful uproars asking for racial equality in the US, just to name a few. On the other hand, through all that turmoil, tech stocks have grown more than 40%! Somehow, our industry is generating more wealth than ever, at a time when many are in dire need of help. Fortunately, this bizarre situation is compelling many into action. People are reevaluating their priorities and trying to make a positive impact in the world. That’s why I thought now would be the right time to write about my current approach to charitable giving.

Talking about your charitable donations feels uncomfortable.

For years I’ve been reluctant to write this post. I was scared of reactions like: “But Mathilde, isn’t it a bit self-serving to talk about your charity contributions?” I felt like it was almost impossible to talk about donating money without sounding like I was congratulating myself. However, after many discussions with family and friends, I’ve realized that the single biggest reason why people aren’t doing more for others isn’t a lack of a will, but a lack of awareness.

People just don’t know how to give or where to start. That was certainly the case for me. Therefore, if I don’t say anything for fear of what people will think of me, I’m missing an opportunity to change the status quo. If this post makes even one person decide to change their stance on charity contributions, I think it’s worth the risk of being labeled “self-serving.” On top of that, there is evidence that normalizing discussions about donations has a positive influence on the amount of money donated. So if you’re wondering how you can start having an impact today, one easy way is to bring up that topic during your next Zoom dinner 😉

So here I go…

Effective Altruism in 3 minutes

Everybody wants to leave the world a better place. The problem usually starts when you ask yourself: “Okay, how do I go about doing that?” Just like many of you I’m sure, I’ve asked myself this question a billion times: how can I be a force of good in the world?

  • Should I change jobs?

I could never get to a satisfying answer, so I simply followed my interests and ended up founding a software company: Front. Of course, that didn’t put an end to the questions — quite the opposite. I wondered: Is my choice a selfish choice? Should I volunteer on the side to balance it out? Should I donate money? I realized I didn’t have a good framework to even think about these questions. That all changed when I read William MacAskill’s book Doing Good Better and was introduced to the concept of Effective Altruism.

Effective Altruism attempts to solve these questions by first establishing a simple way to measure good. The idea is very simple: all good in the world can be measured in QALYs, or Quality-Adjusted-Life-Years. These are the number of years (adjusted for quality of life) that can be added to the world. An easy way to think about QALYs is in situations involving a life-threatening event. If a child would have died of malaria at 6, but instead receives gear and drugs that allow her to live a healthy life until she dies at 66, that is +60 QALYs won. The concept of QALY really helped me answer the 3 questions above.

Should you change jobs?

Probably not. Now that I had a good framework to think about “how to do good in the world” I asked myself: as an individual, how can I best increase the number of QALYs in the world? Here again, this book helped me a ton. There are different answers that apply to different people, but mainly the conclusion I got is that you should do what you’re uniquely good at, as long as it’s not actively harmful. For some, that’ll end up being an activity that is directly responsible for increasing QALYs, like delivering anti-malaria nets to remote villages in Africa. But for the vast majority of us, the optimal strategy is to to do what we’re good at and enjoy doing: that’s how we’re most likely to create wealth for ourselves, and then we can redistribute this wealth to increase QALYs. For me, I believe the answer is running Front.

Should you give money?

Short answer: Yes. It’s often the most impactful thing you can do. But it involves some research in order to make sure your money is going to be most useful. You have to think about whom you’re giving it to and how much you should give.

Whom should I give to?

Once I started understanding that the impact of charities could be measured, I wondered where I could find a list of charities and their impact. There’s a website in the U.S. for this: givewell.org. Their purpose is solely to search for the charities that save or improve lives the most per dollar. It’s amazing! In order to figure whom I’d give money to, there are a few questions I asked myself:

  • Do I view every human life as equal? Is it equally important for me to help the life of someone in my immediate community, as it is to help someone living halfway across the globe? How do I value animal life?

My charity portfolio

Using these criteria myself, I’ve decided to split my donations between these 2 charities:

  • GiveDirectly: I’ve always found it very unfair that I’d been born healthy in a stable family within a wealthy country, when so many others didn’t have half that luck, so I’ve been looking for ways to reduce these inequalities of opportunities. That’s exactly what GiveDirectly tries to accomplish: as the name implies, they give cash directly to populations in need, no strings attached, so that the recipients can decide for themselves how to invest in their own future. This might sound like a very counter-intuitive welfare program, but it seems to be a very effective way to lift people out of poverty. On top of that, this is providing unique research to inform the discussion on basic income.

How much should you give?

This is such a hard question to answer. Here’s what I’ve found:

I think a not so great approach is to “follow your heart” and give when you stumble upon a cause that moves you. It might feel good in the moment, but feeling good isn’t what we should optimize for. Impact is. I’d like to try to do the most good, and if it feels good for me personally, that’s great, but that shouldn’t be the catalyst or deciding factor.

Instead, I’ve decided to budget my donations, just like I would with any other major spending: I give 10% of my net earnings, salary, and any other financial income. 10% might sound like an arbitrary figure, but it seems to strike a good balance: it’s high enough to make a real difference for many important causes, not so high that you’ll feel like you’re working exclusively for charity (internal motivation is real too!), and low enough to be attainable for most readers of this post (although it does represent a real sacrifice, which I guess is what it takes to solve real problems?)

Side note: for Front, the company I founded, given we’re not profitable yet, I’d rather spend our limited resources on getting to profitability, which will ultimately enable more giving. But until then Front has already committed to and started giving 1% of equity, time, and product through the 1% Pledge and the Front Foundation.

Should you give time?

Above I mentioned that it’s probably most impactful to give your money to high-impact causes that matter to you. Does that mean that you should not give your time? Not quite. Even if, per my argument above, giving time is often less impactful than giving money, there are still many reasons why giving your time can be a worthwhile activity.

  1. To maximize your impact, you should not lose any opportunity to use your “super powers” (the things that you’re uniquely good at, or the unique networks you have access to, etc.) to make the world a better place. For instance, I think I’m particularly good at telling stories that help raise funds, so whenever I can, I try to help charities in their fundraising efforts!

Most importantly, it’s not an “either or” type of situation. If you’re able to do both, by all means, go ahead: you’ll get very different and both important outcomes out of each!

PS: if you’re an entrepreneur and interested in maximizing your impact through giving, I strongly recommend you work with Founder’s Pledge. They’ve helped me formalize my commitment early in Front’s journey, and they’re still helping today in making sure I donate in the most effective way.

LEGO builder. Co-founder & CEO @ Front (frontapp.com)