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.

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

  • Should I change jobs?
  • Should I give money?
  • Should I give time?

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?

Should you give money?

Whom should I give to?

  • 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?
  • Is this charity’s activity compatible with my “risk tolerance”? For some charities, there is little uncertainty around how effective they are, because their methods are proven to work and they know exactly how much $1 from you will contribute to their goals. For others, there is a bit of a gamble. Think of vaccine research, or lobbying for regulations to reverse climate change.
  • Is this charity “cash constrained”? Can they use additional money effectively, or would they not have a clear purpose if they had more?

My charity portfolio

  • 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.
  • StrongMinds: Their goal is to “end the depression epidemic in Africa.” Because of my own experience, I know firsthand that mental health issues can deeply affect someone’s life, to the point that they might not even want to live anymore. This has rippling effects on their family and surrounding community that can be devastating (often compounded by the fact that the illness is “invisible”). It’s also an area where market incentives rarely offer a good solution: pharmaceutical companies have a strong incentive to come up with drugs that they can continuously sell to patients, whereas forms of therapies that don’t have a good way to be monetized aren’t researched as aggressively. I am to help tilt the balance in that direction.

How much should you give?

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?

  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!
  2. Giving your time is a great way to build and train your empathy and to challenge your pre-conceived beliefs on certain issues. I think that immersing yourself in difficult situations, understanding the experiences of others, and seeing first-hand how issues are being addressed will give you a broader perspective and, in turn, make you even more likely to contribute positively.
  3. You’ll set a good example for others, who might not be in a position to donate money. Even though that doesn’t apply exclusively to children, as a new mother, this is something I think about more. I want my kids to understand the value of helping others, even before they understand all the nuances involved with money as a medium for doing good.
  4. When it comes to volunteering your time, the worst that can happen is that you’ll have helped further a good cause. Even if it might not be the highest impact activity, it’s hard to argue that you did more harm than good!

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.

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

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