{"items": [{"author": "Jonah", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=421516596212", "anchor": "fb-421516596212", "service": "fb", "text": "Hi Jeff,
You might find this thread relevant:
http://groups.yahoo.com/group/givewell/message/138
Jonah", "timestamp": "1282660214"}, {"author": "Will", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=421517101212", "anchor": "fb-421517101212", "service": "fb", "text": "I'm really interested in hearing how oxfam replies to this. I wonder if they've ever been asked it before. It's a great question.
I subscribe to the theory that increasing income-generating wealth is one of the better uses of income, because it produces a sustainable income source which can then be used for many things on an ongoing basis; and even if it means you're contributing less for a number of years initially, it pays off in the long term.
But you have to look at a much more complicated equation than just \"this year and next year\" -- more like \"what's the break point over a thirty year period of estimated income, return on investment, etc\" -- and then there's the question of \"where do I just stop making this problem more complex so I can come up with some answer and act on it?\"...
Your economic posts are fascinating.", "timestamp": "1282660391"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=421518501212", "anchor": "fb-421518501212", "service": "fb", "text": "@Jonah: thanks for the link; those are the questions I'm interested in. There's not a huge amount of discussion there, presumably because it's hard to do better than speculation.", "timestamp": "1282660725"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=421519231212", "anchor": "fb-421519231212", "service": "fb", "text": "@Will: one issue with asking oxfam is they may subscribe to some sort of bird in the hand / two in the bush theory about donors. If I'm willing to give $1000 now and tell them I'm considering waiting a year and giving them $1200, they may well decide to take the $1000 because:
(a) they don't trust me to still want to give away the money in a year
(b) they don't trust me to still want to give the money to *them* in a year (which from my perspective is more likely than (a) )
(c) they don't believe that I can really get the promised return.", "timestamp": "1282660883"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=421520391212", "anchor": "fb-421520391212", "service": "fb", "text": "From one of the replies on jonah's link:
\"\"\"
If you help people in the poorest parts of the world, you are hopefully empowering them to help others, by e.g. contributing to economic output in their area. I think it's very possible that doing so has a *higher* return than aid financed by overseas donors, which has so many more degrees of separation from the people you're trying to help.
\"\"\"
This is pretty reasonable; as an overseas donor I know so little about what's going on there. Oxfam works with local organizations, so that's better, but what is best is people helping their neighbors when they truly need it. Person to person giving/lending both strengthens communities/families and directs the money where it is needed. This approach doesn't work, though, unless the people who need money have neighbors/friends/family who can afford to help them. So the sooner this cycle is started the more it can help.", "timestamp": "1282661149"}, {"author": "Julia", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=424761131212", "anchor": "fb-424761131212", "service": "fb", "text": "We spoke to a couple of people at Oxfam, and they said that regularity was actually more important to them than amount. They would rather have a lesser amount given every year than get a big lump they were expected to spend that year. Nonprofits aren't supposed to hold on to lots of money, so it's better for them to get a steady flow.", "timestamp": "1283543799"}, {"author": "Anish", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=10153103671741213", "anchor": "fb-10153103671741213", "service": "fb", "text": "Alright, it's been half a decade, do we still not have a more specific answer? Consistency probably means that one's best plan is to put all the money into some sort of fund and dispense it out a little every month. But at what rate? If we opt for most consistent, it would probably make sense to distribute funds at around 3-5%/year, but that also means that e.g. you have to choose where to distribute funds wisely before you die.", "timestamp": "1450043066"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=10153103691596213", "anchor": "fb-10153103691596213", "service": "fb", "text": "No, we still don't have good answers. But that's partly because this turns out to be a surprisingly complex question. In order to consider the direct effects you need to have a good sense of what's going to happen to the best known giving opportunity over time.
(My current answer is, based on it being better to build a movement around giving a fixed amount each year, that you shouldn't postpone giving or borrow money to give sooner. Which is not an answer a discount rate framework can give you.)", "timestamp": "1450044111"}, {"author": "Anish", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=10153103697086213", "anchor": "fb-10153103697086213", "service": "fb", "text": ">based on it being better to build a movement around giving a fixed amount each year
Well, if we have an answer to the discount rate problem, it's relatively easy to build financial instruments that reduce one problem to the other: instead of tithing to GiveDirectly, you tithe to The GiveDirectly Custodial fund that invests and disburses funds at the best rate.", "timestamp": "1450044264"}, {"author": "Cory", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=10153103711266213", "anchor": "fb-10153103711266213", "service": "fb", "text": "I know you've posted this before, but what are the best resources you've used to decide what charities to give to? We are probably able to give more this year than in previous years. I've always liked heifer, but lately am reading some things that are somewhat anti-heifer, so not really sure! We gave to oxfam in support of syrian refuges, so glad to know that they are up there on your list. Thanks!", "timestamp": "1450044538"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=10153103728721213", "anchor": "fb-10153103728721213", "service": "fb", "text": "@Cory: I think the best resource out there now is GiveWell [1], and their top recommendation is the Against Malaria Foundation. [2] Oxfam is good too though.
[1] http://www.givewell.org/
[2] http://www.givewell.org/international/top-charities/amf", "timestamp": "1450045125"}, {"author": "Cory", "source_link": "https://www.facebook.com/notes/jeff-kaufman/tuesday-august-24-2010-what-discount-rate-do-we-apply-to-giving/421515706212/?comment_id=10153103734916213", "anchor": "fb-10153103734916213", "service": "fb", "text": "thanks!", "timestamp": "1450045394"}]}