How a billionaire could spend their money to help the disadvantaged: 7 ideas from the top of my head

by Yitz6 min read4th Dec 202012 comments

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Effective AltruismCause PrioritizationWorld Optimization
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When I first began writing this, my goal was to think of 50 different ways an extremely wealthy person (by which I mean wealthy on the level of having hundreds of millions to several billions of dollars at their disposal) could use their money to improve the lives of as many people as possible, as much as possible. After writing this list, I narrowed it down to seven ideas that I thought were both potentially viable, and which I haven’t seen discussed in any detail elsewhere before writing. This is a list of those seven philanthropic ideas, along with a brief discussion of each one.

 

It should be noted that I do not have any experience actually managing extremely large sums of money, and as such all of these ideas should be taken with an equivalently large grain of salt. The goal here is to get people thinking, and perhaps come up with some original insights, rather than to serve as an immediately practical resource for a wealthy reader (though if you are a multimillionaire reading this, feel free to DM me or comment below about any ideas, criticism, or insight that you may have on the topic coming from your position). It should also be noted that the fact that I haven’t seen most of these ideas discussed before signals that I may be missing some obvious problems here, so if you see anywhere where I may be going wrong, I’d be more than happy to discuss that in the comments.

 

Anyway, without further ado, here are some ideas for how multimillionaires might use their money for good:

 

  1. Start your own insurance company, and design it to maximize medical coverage and ease of use for consumers, rather than to maximize company profits. The goal should be for it to make only enough money that is necessary for continued healthy company survival without needing further funding, and everything it might make beyond that should be re-invested in improving the experience/minimizing costs for consumers. As a disabled person myself, who has a huge amount of lived experience with the (American) medical and psychiatric system, it seems that insurance providers who refuse treatment to those who desperately need it (even when those treatments are prescribed by doctors!) are one of the largest institutional sources of suffering and wasted time in America today (coming in second only to our prison system, perhaps, while followed by filing taxes). I do not think I have ever met a disabled person who doesn’t have a genuinely chilling horror story about their insurer (See https://www.reddit.com/r/awfuleverything/comments/k3oyuw/poor_guy/ and the comments below it for countless examples of this—I know of people who have died due to their insurer refusing to cover needed medication, or people who have been stuck unemployed for years because they can’t get approval for an operation that would treat their symptoms), and this seems like something that can be actually changed by a determined billionaire who wants to shake up the market. An open question which I do not know the answer to is how much it would cost upfront to start such a company, as I have been told by people more well-versed in economics than me that if they start too small, insurance companies carry a huge risk of failure. Depending on how much is needed to start such a company with minimal risk of going bankrupt, this idea may only be feasible for a very small handful of people in America to carry out, unfortunately. I do believe this idea is worth investigating further, however, as it would be both tremendously beneficial to millions of disadvantaged people, and would be self-sustaining over very long timeframes.
  2. Fund a transparent meta-scientific organization which uses some form of peer-review for accreditation of scientific papers, bypassing the current system of scientific journals. This organization should follow stricter and more rigorous standards for accreditation than is currently required for acceptance by most modern journals, and should optimally require that the goals, methods, and expectations for a given experiment mentioned in an accredited paper be submitted to an open repository before being performed. The ultimate goal of this organization would be to improve the current replication crises in science, which shows no sign of ending under the status quo, and has resulted in a tremendous amount of stagnation in scientific advancement. Buy-in from the scientific community would be necessary for success of course, so every effort should be made towards transparency, and optimally a large fund should be set up to incentivize scientists to gain accreditation for their papers from your organization. As a model for how this might be implemented successfully and with community buy-in, it is worthwhile to study the history of “Kashrus” organizations in the Orthodox Jewish community (such as the Orthodox Union), which dramatically improved the state of kosher food throughout America as a result of their totally optional certification labeling. I could see a project like this resulting in at least some amount of success with even relatively modest funding (on the scale of a few million USD), which might make this an attractive concept for wealthy scientifically-minded people with less than billions to spend.
  3. Create a company which offers loans to people in disadvantaged communities, with the lowest possible interest rate (and largest possible willingness to give to potentially risky causes) that would still keep the company self-sufficient. The goal here is to put an end to loan sharks in poor communities, by offering a competitive service that won’t bankrupt poor people at their lowest moments. I’d hire a team of experts to figure out how to make such a company act in as ethical a manner as possible (including debt forgiveness programs perhaps), while still being capable of turning a modest-enough profit that you won’t be in danger of losing too much money if things go south. This would clearly require a rather large initial investment, but should also be self-sustainable once set up in a given community. I consider self-sufficiency to be a very powerful positive here, as you don’t want the community to be dependent on someone continually donating money to the cause, in case something should happen to the philanthropist.
  4. Fund the large-scale creation of memes (in the form of games, books, podcasts, literal internet memes, etc.) that not only provide genuine entertainment, but also carry an ideological “payload” of some sort that you believe will improve people’s lives. HPMOR comes to mind as an example from this community of what this might look like. As well as dissemination of rationalism, other ideas worth disseminating might include financial literacy, political theory, increasing empathy towards the Other, etc. This goal can be carried out with pretty much any amount of money, as long as you have connections to good artists (and perhaps good practically-minded philosophers) and can hire even a relatively small marketing team. Obviously the more is spent the more could theoretically be achieved, but I’ve noticed most high-profile attempts of this sort (that I’ve heard about at least) tend to forget about the cultural power of smaller artists, and can even cause a Streisand Effect if the marketing is done in an abrasive or clumsy manner (remember what Mr. Bloomberg’s failed presidential bid was trying to achieve? Me neither, though I sure did grow to hate seeing his face on YouTube ads). As such, if you are a wealthy individual and wish to go down this path, it is absolutely essential that you have the right people on your team, as no amount of money will help you if you don’t. As it happens, creating viable memes is sort of my specialty (I’m a hobbyist game developer and have successfully used viral marketing to overcome my complete lack of budget multiple times in the past), so feel free to message me if you wish to discuss this in more detail or get specific recommendations.
  5. Create a pharmaceutical company, and start off selling generics at the lowest possible price that can still turn a modest profit. Salaries for executives should optimally be capped at a reasonable amount, and great care should be taken to avoid any possible collusion with the rest of the industry (due to the current poor ethical state of most pharmaceutical companies, it is quite likely that attempts will be made to artificially raise prices using any means available). When (or if) the company is ready to create original products, all clinical research and results should be released into the public domain as soon as the initial research and production investment has been regained. As with most other ideas listed here, the goal is not to maximize money for the company, but not for it to operate at a loss, either. Our current medical system is currently quite broken in many areas, and this is in large part due to artificially jacked-up prices by monopolistic corporations with capitalistic rather than humanistic goals in mind. Any work done to ameliorate this situation would be a godsend to millions of people who are at risk of death due to the exorbitant cost of life-preserving medications they can’t possibly hope to cover.
  6. Set up and fund a “depression hotline,” using an organized network of at-home therapists and social workers who communicate over the internet through text, audio, or video (at the patient’s choice) to at-home patients. This already exists to some degree in the form of suicide hotlines, and therapists offering online treatment due to the current pandemic, but due to insurance issues most therapists can only work within the same state, and can cost a prohibitive amount for poor people (who tend to need therapy more badly in the first place). Very few people feel comfortable calling a suicide hotline if they aren’t feeling actively suicidal, and there’s a great need for services that can provide comfort and targeted mental health advice on short notice for those who are “merely” having a tough time. If this is made a free service it would obviously be a drain on philanthropic resources, but the need is great enough that it may very well be worth it in the grand scheme of things.
  7. Fund a task force to remove lead piping/other harmful substances from as many populated areas as possible. Lead pipes cause a vast amount of harm to mental and physical health, and are fairly cheap to replace, yet there are still more than 100,000 lead pipes connected to homes in just 15 states (see https://www.csmonitor.com/USA/2018/0827/US-cities-push-to-remove-lead-pipes-but-some-property-owners-resist). Spending even a relatively small amount of money to remove lead pipes and similar sources of toxins would save countless people from needless suffering in the form of medical and mental health problems later on, not to mention the immediate drop in violent crime rates seen when lead poisoning is removed from a community, as well as improvement in education levels in children (see https://www.google.com/amp/s/www.vox.com/platform/amp/policy-and-politics/2019/6/12/18661193/lead-pipes-paint-flint-michigan-usa-cost-fix). Although completely solving this issue would apparently cost roughly half a trillion dollars, which no single individual can possibly afford to cover, a massive amount can still be done with targeted awareness efforts, creating powerful lobbying groups to push for increased regulation and decontamination funding, and directly paying for decontamination in select, high-population and high-risk areas. This issue currently seems to barely register in the national consciousness, but that can almost certainly be changed by someone with enough money or political power.

 

I hope this list of ideas can be of some use, though for whom exactly I’m still not sure. Feel free to leave your thoughts in the comments; I’ll try to read through all of them, and I look forward to any criticism you may have :)

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I want to start by saying that these are some interesting ideas that I had definitely never thought about before! However, if your goal is to "improve the lives of as many people as possible, as much as possible" I think you missed the mark a bit – this looks more like "interesting/novel ways to improve the lives of people who are disadvantaged in a way I'm personally familiar with." The people whose lives can be improved most cost-effectively probably live thousands of miles away from you. (I can't tell from reading how familiar you are with EA and don't want to come across as patronizing.) Specific note on #7 – lead abatement is actually a cause area that GiveWell has looked into, and it looks like there's a new EA organization focused on it!

Now time for my opinions!

If you have several billion dollars, you should start another organization like Open Phil or the Gates Foundation – a foundation that's solely funded by you, trying to do the most good by your standards, led by really smart and thoughtful people who you trust. Reasoning:

  • $1B is generally more than any single cause area can easily absorb, and existing foundations (even Open Phil) aren't a very good place to put the money either, since they often already have trouble spending down their huge endowments.
  • You'd be subject to a different set of constraints and likely have a different philosophy than the other foundations, so you'd be able to cover more/different ground. (e.g. the Gates Foundation has done a lot of really excellent work, but they also pour a lot of money into education, and that area is so problematic that they're probably essentially just pouring that money down the drain.)
  • Open Phil doesn't like to fund more than 50% of any project, because that can often create bad dynamics (e.g. the recipient subconsciously becomes oversensitive to the donor's opinions for fear of losing funding); if you come in as a separate donor and independently think the project is good, you and Open Phil together can fully fund the project without creating this dynamic (as long as you don't form – or appear to form – a coalition). 
  •  Also something something competing in the marketplace of ideas; hand-wavey reasoning that maybe having another foundation with a focus on evidence-based interventions would push both you and Open Phil to do a better job overall.

Man, all this is really making me wish I had a billion dollars.

thanks for your insightful feedback!

I've been thinking about the responses I've received a lot the past few days, and have somewhat changed my opinions written here, though not entirely. It really deserves a second essay, but it seems to me that EA (as normally practiced in this community) has a number of potentially dangerous blindspots, most notably in areas where it is hard to determine in advance how effective a given cause will be, or in general in areas that are hard to compute the value of using any currently known formal utilitarian systems. I think too much weight is currently being given by the EA community into our ability to formally calculate the value of a given good, and additionally, there needs to be greater willingness to fund more diverse actions, in my opinion. I know I'm not explaining my case very well here, but I would like to go back to this at some point and expand on it.

Multiple of those ideas are "do a company in sector X that's less profit focused". Those projects are generally not EA projects as they are not efficient. 

If you create an insurance company that's designed to be good for disabled people all the disabled people sign up, you have to pay out and have huge premiums to pay for it. Those huge premiums then drive away anybody who's not in need of a lot of medical treatment.

To the extend that you want that disabled people get supported in their medical costs by non-disabled people you need government regulation to make that happen. Giving philantrophic money directly to disabled people in the US is generally not considered EA as you can create much more good for the same money if you spend it to improve health outcomes in the third world. 

For idea 5, Michael Kremer's patent-buyout proposal seems more directly focused on doing something similar but better for patented drugs (presumably via a charity?). It looks valuable, but $1 billion worth of charity seems rather small for this kind of project.

1. I have worked in niche insurance (travel). We ran our products at cost for 3 years just to kill off a competitor. We were nobody, major insurers would happily form a Voltron of anticompetitive behaviour to end a business threat that big. One billionaire versus multiple billionaires is an easy contest to predict.

Again, having worked in niche insurance, I can tell you that the insurers in America (as dodgy as they are) are not the chokepoint in the system. Every single medical bill we received from America (directly from hospitals) was discounted by 50% on the spot. Discounts of 90% were routine. It is your healthcare providers that are robbing you blind.

If it were me I'd analyse the market for gaps and then start healthcare businesses to fill them. Once I had a base I'd use that as a wedge to create more and more offerings until I could provide full care.

Also, as a fellow end user of mental health services I'm afraid I've got some bad news: mental health treatment is basically a dead end as a health offering. Efficacy is low, and we could easily throw billions at the area and achieve nothing. What is required is unknown scientific breakthroughs. They obviously don't happen on a schedule we can predict. We are against a wall and there's not a lot we can do.

2. I'd just like to see a journal of null, negative, and unreproducible science. The replication crisis is happening in no small part because a shitload of science that says something other than what whomever funding it wants is swept under the carpet.

If there is to be any standards it should be that all research in the public interest (for example, medications) or funded by the public must be made public. Science conducted and filtered in secret is the problem.

3. You are merely putting off the problem. Financial illiteracy and a lack of discipline are the problem. You cannot pay people to continue doing the wrong things and expect things to get better.

If you must put money in the poor then you don't do it for individuals, you do it for businesses and enterprises. You'll lose just as much money as you would being the payday lender of first choice, but if you create viable businesses not only are you creating something that is profitable to get your money back, you're making jobs for the community (ie. rewarding people who are prepared to act responsibly in society). If you're already down for a high risk strategy then you might as well go all in and go for the high reward one at the same time.

4. Propaganda already exists and the space is crowded. That being said, cognitive viruses are interesting, so are cults and fanaticism.

If I had the money to spend I'd develop protocols to recruit men to whatever cause/s I favoured. In our man hating and vapid world men are ripe for enticement to anyone that can give them a purpose. As men basically do everything that matters you wouldn't need much before you had your fingers in everything. That's a degree of influence that would be significant.

5. Already exists. You wouldn't even need to do much beyond becoming an importer and a reseller.

6. Let me pose a question: Why don't people have people around them they can talk to about these things? Maybe that's something that should be addressed. Coming to clean up the mess is nowhere near as useful as making sure the problem doesn't get out of hand in the first place.

7. I don't have anything to add. This is infrastructure and government and America is terrible at both.
 

Re #6: why don’t people have people they can talk to about depression?

I’d like to hear more about this. Is it because people want to talk to someone about mental health but don’t have a person to talk to? Or they do have a person but don’t want to talk?

Personally I find myself keeping quiet about a lot of the important things in my life, because either 1) it’s bad and I don’t want to look bad or have the information get around, or 2) it’s good and I don’t want to brag, especially if my friend is doing less well.

If you are going to spill your guts to someone you have to trust them. Trust must be built over time. We don't live in a society that builds trust. It's one of those answers that sounds too simple to be true, but I believe that's what it comes down to.

5. Already exists. You wouldn't even need to do much beyond becoming an importer and a reseller.

Given the bureaucracy that exist importing and reselling is very expensive because you have to run studies to prove that your product does the same thing as the established products.

This is in the context of generics, so all the work has been done. That's why generics are as cheap as they are, anyone can make them and sell them.

As long as you have the paperwork to show your product is chemically identical to the medication and doesn't have anything else like rat poison in it then you're good to go. You just make sure you do random batch testing (and you can outsource that to someone else's lab) and that your liability insurance is up to date in case you miss something.

The hardest part here is the sales. This is a competitive sector and the only way you're going to make money is with volume.

As long as you have the paperwork to show your product is chemically identical to the medication and doesn't have anything else like rat poison in it then you're good to go. 

No, you have to do bioequivalence studies and get a permit which is expensive.

https://slatestarcodex.com/2019/04/30/buspirone-shortage-in-healthcaristan-ssr/

https://slatestarcodex.com/2015/09/24/the-problems-with-generic-medications-go-deeper-than-one-company/

The typical [small molecule] generic drug takes firms 1-3 years, $1-$5 million, and no human clinical trials to introduce. [In contrast], the entire biosimilar development process has been projected to span 8-10 years and cost upwards of $100 million. Human clinical trials involving hundreds of patients can cost $20-40 million to simply confirm that the candidate biosimilar generally replicates the reference product’s short-term positive and negative clinical effects.

 

So 3 years and $5M USD + ongoing FDA fuckery? How is that not an affordable as part of starting a business in a cutthroat sector?

We are not talking about complicated stuff like insulin so much as we are about painkillers and other ancient over the counter meds. You can literally do a google search for public prices for bulk paracetamol tablets in blister packs, so there's no reason you can't get a custom order with your branding and a lower price when you're importing tons of the stuff. If you're serious about this you send your own QA chemists to China or India to supervise the process in the factory so you aren't importing crap.

This isn't a difficult business, this is a competitive business. This isn't you developing or making anything new, it's razor thin arbitrage and knife in the back sales over something that anyone can make. You don't start your business trying to break into the insulin cartel, that would be suicide. Prove your business on the easier stuff, and if you make it then you can consider starting a war.

Give it to an existing EA group or groups doing good work, like Givewell.  They probably can't absorb $1bn immediately but they could use tens of millions, certainly.