Introduction

​​Effective altruism is the use of evidence and careful reasoning to work out how to maximize positive impact on others with a given unit of resources, and the taking of action on that basis. It’s a philosophy and a social movement that is gaining considerable steam in the philanthropic world. For example, GiveWell, an organization that recommends charities working in global health and development and generally follows effective altruist principles, moves over $90 million per year to its top recommendations. Giving What We Can, which encourages individuals to pledge at least 10% of their income to the most cost-effective charities, now has over 3500 members, together pledging over $1.5 billion of lifetime donations. Good Ventures is a foundation, founded by Dustin Moskovitz and Cari Tuna, that is committed to effective altruist principles; it has potential assets of $11 billion, and is distributing over $200 million each year in grants, advised by the Open Philanthropy Project.^[1]

Philanthropists in the effective altruism community typically donate to charities that try to improve the wellbeing of the poorest people in the world, the living conditions of livestock in factory farms, or the long-term survival and flourishing of civilisation. Highly regarded charities include the Against Malaria Foundation, which helps distribute insecticide-treated bednets, Mercy for Animals, which runs campaigns to convince large corporations to stop using eggs from caged hens, and the Blue Ribbon Study Panel on Biodefense, which works to ensure that developments in synthetic biology don’t lead to catastrophic outcomes, such as a man-made pathogen causing a global pandemic.

However, for the effective altruist, a crucial issue concerns timing. Rather than donating as soon as she can, would she have a bigger impact if she saved her money, donating a larger amount of money at a later date? Or, if the opportunities available now are sufficiently good, should she even take out a loan so that she can donate more of her income now, and less in the future? This issue is crucial both for small individual donors in the effective altruism community — most of whom currently donate regularly each year, but some of whom save in order to donate later — and for large donors like Good Ventures, which is attempting to spend down its capital quickly, but is still saving the large majority of its wealth for a later date.^[2]

The thought that it might be most effective to invest one’s money in order to donate it at a later date seems often to be regarded as a surprising or counterintuitive conclusion; this is the view of both moral philosopher Dan Moller and political philosopher Laura Valentini.^[3] Though many individuals might choose to save their money and, for example, donate in their will, this might be at best regarded as a compromise between altruism and self-interest, rather than warranted on the grounds of altruism alone.

However, in other contexts, we seem perfectly happy with the idea that an altruist should delay their impact. For example, it seems perfectly obvious that an 18-year old who wishes to use their life to do as much good as possible should, if they can, go to a good university in order to increase their lifetime impact. But, in doing so, they are investing four years of their time in order to have a larger impact over the rest of their life.

Similarly, the idea that foundations and universities should maintain their endowments, spending only close to the legal minimum of 5% of their endowments, seems often to be regarded as common sense. The idea that Stanford or Harvard should spend down their endowment over the next few decades would be regarded as counterintuitive. But, again, this is in effect to take the position that those donations are spent at least as well in the future as they are now.

What’s more, though we seem to be intuitively unhappy with the idea that it might be most effective for an individual philanthropist to invest and donate their income at a later date, we also seem to find unintuitive the idea that one ought to take out a loan in order to donate even more now. Indeed, such an idea might even be regarded as fanatical. But if there are strong arguments for donating now, then why should we be so surprised if those arguments also motivate taking out a loan, at least when the interest rate is low?

Moreover, when it comes to government spending, it’s well accepted that a government ought to borrow in order to be able to spend more earlier on social programs. Yet, to at least some extent, the government doesn’t seem so different from a philanthropist: a significant part of the government’s aim is to spend its budget in a way that will enhance the living conditions of its citizens.

Perhaps there are real differences between philanthropists, career-seekers, foundations, and governments that explain why the commonly accepted answer to the question “Give now or invest and give later?” is so different for each of them. But it’s hard not to suspect that some sort of bias is at play, especially in the discrepancy between how charities spend their money and how foundations spend their money. Perhaps we simply find the status quo acceptable and find any deviations from the status quo counterintuitive. Either way, the fact that we have different attitudes to giving now versus giving later across different domains makes it particularly valuable to investigate the question of when is the socially optimal time to spend money, for it may be that we come to revisionary conclusions for one or more of those domains. Moreover, despite the importance of this question, it has received very little academic attention from either philosophers or economists.

In this chapter, I will canvass what I consider to be all the main considerations that are relevant to whether an effective altruist ought to donate now or later, explaining what each of these considerations do and do not entail. In section I, I discuss what I view as relatively minor considerations, and in section II I move on to what I view as more significant considerations. In section III I will then propose a qualitative framework to help determine, for a given cause, whether you should invest to give at a later date, whether you should give now, or whether you should take out loans in order to donate even more now.

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