This is a linkpost for https://ninarimsky.substack.com/p/consider-giving-money-to-people
Consider giving money to people, not projects or organizations
2nd Jul 2023
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30 comments, sorted by Click to highlight new comments since: Today at 7:18 PM
I've had very good results from offering unsolicited no-strings $X,000 gifts to friends who were financially struggling while doing important work. Some people have accepted, and it took serious pressure off them while they laid the foundations for what's become impressive careers. Some turned me down, although I like to imagine that knowing they had backup available made them feel like they had more slack. It's a great way to turn local social knowledge into impact. The opportunities to do this aren't super frequent, but when it arises the per-dollar impact is absolutely insane.
Some advice for anyone who's thinking of doing this:
—Don't mention it to anyone else. This is sensitive personal stuff. Your friend doesn't want some thirdhand acquaintance knowing about their financial hardship. Talking about it in general terms without identifying information is fine.
—Make gifts, not loans. Loans often put strain on relationships and generally make things weird. People sometimes make "loans" they can't afford to lose without realizing what they're doing, but you're not gonna give away money without understanding the consequences. Hold fast to this; if the recipient comes back three years later when they're doing better and offers to pay it back (this has happened to me), tell them to pay it forward instead.
—The results will only be as good as your judgements of character and ability. Everyone makes mistakes, but if you make *big* mistakes on either of those, then this probably isn't your comparative advantage.
Do you give such gifts once per friend or sometimes multiple times? If you do it multiple times with the same friend, how do you handle conversations around that?
Once per. That's not a policy, I just haven't yet felt moved to do it twice, so I haven't really thought about it.
Does that mean that there were also no conversations where people who received money asked later for more from you?
That's correct.
I guess if they found themselves in a similar situation then I'd *want* them to ask me for help. I have a pretty easy time saying no to people and wouldn't feel bad about sympathetically rejecting a request if that felt like the right call, and maybe that's not the norm, idk. But in any case, I offered one-off gifts, and it was always understood that way.
That does seem great. The hardest part of donating to your friends though is that you have to make it really clear that you don't expect anything back, but that you also don't want to fully provide them for the rest of their life. You won't want to make your friends feel like they depend on you financially.
This sounds great - I think many underestimate the effectiveness of this kind of direct support. When giving money directly to talented and well-motivated people you know personally, you are operating with much more information, there are no middlemen so it’s efficient, and it promotes prosocial norms in communities. They can also redistribute if they think it’s wise at some point - as you mentioned, paying it forward.
Organizations becoming flush with cash makes them a target for bad actors and those with personality disorders. This is also a problem for individuals, but small grants or tenure are less likely to cause it (though it will happen to the one doing the granting)
I think the nonprofit world is particularly susceptible to deleterious perverse incentives due to the lack of tight feedback loops you would get with a for-profit business, and indeed one failure mode is the over-accumulation of people with unaligned goals.
As mentioned, this is much less of a risk when there is a good feedback signal, which some nonprofits do have, or when the organization is very small.
The person-first approach is an effective diversification strategy.
Bear in mind that some people think you shouldn't diversify.
Disclaimer: I am not an EA or a utilitarian and don't endorse the reasoning in that link.
I think this largely depends on the area to which you're donating. Donating money to individual researchers probably is more efficient than donating to research organisations, and the same can be said for certain businesses.
But you mentioned that the scale of outcomes plays a big role in deciding on whether to donate to companies or to individuals. And in some areas, such as health, donating to individuals is almost never as efficient as donating to an organization. Yes, funding a "help Jake battle cancer" GoFundMe page provides stronger feedback, but is it really as useful as helping many starving or ill children?
2is it really as useful as helping many starving or ill children?
I think that the proposed alternative to donating to organization that helps starving children is donating to a starving child directly.
If you know a starving child in your neighborhood, and you give them every day $2 and say "go quickly buy some food before someone takes the money from you", the child will not starve anymore, and it will cost you $60 a month, $730 a year.
If you give $60 monthly to an organization instead, you probably just contributed a tiny fraction to renting an office space.
I guess you're right. Though the issue here is that it's hard to directly estimate the "impact per dollar" of a charity organization, and it is even harder to compare it to that of individuals, since organizations are obviously much more complicated. So you can't really be sure whether an individual donation is more or less efficient.
You can measure "impact" in "starving kids saved" (or whatever the charity is doing), but that doesn't account for other stuff that the charity spends money on. For example, marketing, while not helping directly, can raise awareness of the issue, so it can also be considered impactful.
Another thing I just considered are those organizations which focus on funding individual campaigns. They show amounts of money (and progress bars, when appropriate) collected for each cause, so that also provides strong feedback, while having the reliability of an organization.
I think there's a lot of variety in the capabilities, resources, and amount of effort that people have to put into "trying to improve the world via philanthropy". This advice is excellent for a someone who's better at identifying excellent performers than most "normal" donation targets AND has the right mix of time available to find/evaluate recipients but not to do direct work. I suspect that's a pretty small number of philanthropists.
If you make programmer money and a bunch of your friends are working on weird projects that take two hours to explain and justify—and I know that describes a lot of people here—then you're in an excellent position to do this. Essentially it's legibility arbitrage.
I would expect that one of the key reasons why many people would not do this, is because it's socially weird and they are uncertain about how to handle how that changes their social relationship to the people around them.
Especially, given that many programmers are more on the shy side, writing a check to a GiveWell-recommended charity is easier. I think it would be valuable if someone who acts like that would write more about their experience doing it, so that people have an easier model to copy.
I like the term "legibility arbitrage" but I don't think it's actually useful as a model.
It's possible that you happen to have a friend with sufficient skill, drive, and connections to make a bigger difference with your support than a more established organization could. It's possible that you have enough friends with this potential that you really should go with the VC model - small throwaway investments in a number of tiny ventures, in the hopes that one of them will be bigger than the sum of your investments.
But I doubt it.
I've actually done this and it worked incredibly well, so I'm not persuaded by your vague doubts that it's possible. If you insist on using "opinion of established organizations" as your yard stick then I'll add that a strong majority of the people I supported would later go on to get big grants and contracts from well-respected organizations, always after years of polishing and legibilizing the projects which I'd supported in their infancy.
Certainly it wouldn't work for the median person on Earth. But "LW reader who's friends with a bunch of self-starting autodidacts and has enough gumption to actually write a check" is not the median person on Earth, and people selected that hard will often know some pretty impressive people.
In the absence of very quantifiable outcomes, evaluating whole organizations seems harder than evaluating individuals. I think it's actually quite easy to get a good idea of how promising someone is within <1hr. I agree with many of Cowen's takes on Talent.
But I agree that most philanthropists probably shouldn't take the person-first approach. I do think more people should. Sensible alternatives are legible effective global health charities with quantifiable outcomes / clear plans, and progress-driving entrepreneurship.
This seems like a crux "evaluating whole organizations seems harder than evaluating individuals." I don't think it's even close to correct, for most small-time (say, less than 5 hours/week and $200K/year donated) philanthropists.
I believe exactly the opposite: it's far easier to identify a reasonable number of candidate organizations than it is individuals, and far easier to pick one that's acceptably likely to be effective. Picking exceptional individuals aligned with your philanthropic goals is really difficult and error-prone.
Yes, this is a crux. To a large extent, the answer to what is easier depends on what one aims to achieve with philanthropy, which varies a lot.
There is a common belief in AI alignment that most do worse research if they’re independent rather than in an organization (academic lab, nonprofit lab, or for-profit company). Based on your arguments, you probably disagree. Why? And if you agree, why isn’t this strong evidence against the personal-first strategy?
FWIW this doesn't seem right to me. Indeed, working at labs seems to have caused many people previously doing AI Alignment research to now do work that seems basically just capabilities work. Many people at academic labs also tend to go off into capabilities work, or start chasing academic prestige in ways that seems to destroy most possible value from their research.
Average output from independent researchers or very small research organizations seems where most of the best work comes from (especially if you include things like present-day Redwood and ARC, which are like teams of 3-4 people). Many people do fail to find traction, whereas organizations tend to be able to elicit more reliable output from whoever they hire, but honestly a large fraction of that output seems net-negative to me and seems to be the result of people just being funneled into ML engineering work when they lose traction on hard research problems.
As an added datapoint, I know of an IMO promising researcher who is now at a lab and is working on a write-up with the goal of persuading other people in the lab about what sort of research is important. This is better than doing capabilities work but is not the object-level research they were previously working on that seemed promising to me.
This sounds like a good introduction to a greater debate about when it is better to support individuals and when organizations. Examples from real life (for both sides) would be great to have. But because the existing standard is to support organizations, it seems very useful to remind people that supporting individuals is also an option.
My intuition is that organizations have a lot of overhead. They need to register as a legal entity, do accounting, rent an office space, make themselves visible and legible for potential donors. If something can be done by a single person, sponsoring that person directly saves these costs. Sponsoring an organization might actually encourage mission creep.
Organizations are probably better when the specific person is easy to replace. If you sponsor the organization, then if the person doing the task quits / gets hit by a car / joins a religious cult and stops caring about research, they will be replaced by someone else, and the project will continue.
So, it seems like good questions are: Can it be done by one person? Is the specific person replaceable?
I’m not sure I understand how funding an individual, rather than a small team, solves the feedback loop problem. No one person can do it all. What is the mechanism that yields alpha when funding an individual over funding a small team, for example?
An individual can still have collaborators even if they aren’t in a formal organization/team.
So is the idea to prefer funding informal collaborations to formal associations? I remain confused about what exactly we are being advised to prefer and why. I don’t want to come across as being unconstructively negative, so let me elaborate a bit.
A proposal to fund individuals, not projects or organizations, is implying that there’s alpha to be found in this class of funding targets. So first, I am trying to understand the definition of “individual” as target for grant funding. An individual can work with others, in varying degrees of formality, and usually there will be one or more projects that they’re carrying out. So I am struggling to understand what it means to “fund an individual” in a way that’s distinct from funding organizations and projects. Does it mean “fund an individual, regardless of what they’re working on or who they’re working with?”
Second, I’d like to understand the mechanism by which we expect to get more bang for our buck by doing this. Do we think that individuals need the freedom to discard unpromising projects and collaborators, and guaranteeing them funding regardless helps them find the most promising team and project? Do we think that large collaborations weigh people down? Do we think that by the time a project is well defined and the team is large and formal, there will be other sources of funding, such that the main funding gaps are at an early, fluid, informal stage of organization-forming?
I’m open to all these ideas, I would just like the theory of change to be better pinned down.
So is the idea to prefer funding informal collaborations to formal associations? I remain confused about what exactly we are being advised to prefer and why.
It's possible to establish a formal affiliation while preserving independent financing. This is similar to how researchers at educational institutions can secure grants or tenure, thereby maintaining their individual funding.
A proposal to fund individuals, not projects or organizations, is implying that there’s alpha to be found in this class of funding targets. So first, I am trying to understand the definition of “individual” as target for grant funding. An individual can work with others, in varying degrees of formality, and usually there will be one or more projects that they’re carrying out. So I am struggling to understand what it means to “fund an individual” in a way that’s distinct from funding organizations and projects. Does it mean “fund an individual, regardless of what they’re working on or who they’re working with?”
Funding individuals implies entrusting them with the discretion to use the funds how they see fit, potentially subject to certain limitations - the ultimate decision-making authority rests with the individual recipient, not an overarching organization. This approach emphasizes evaluating the individual's attributes, skills, and accomplishments to assess the merit of funding rather than concentrating on the characteristics of the organizations or projects they are associated with (except as far as they serve as indicators of the individual's suitability as a grantee). (What organizations and projects someone associates themselves with certainly can serve as evidence of the suitability)
Second, I’d like to understand the mechanism by which we expect to get more bang for our buck by doing this. Do we think that individuals need the freedom to discard unpromising projects and collaborators, and guaranteeing them funding regardless helps them find the most promising team and project? Do we think that large collaborations weigh people down? Do we think that by the time a project is well defined and the team is large and formal, there will be other sources of funding, such that the main funding gaps are at an early, fluid, informal stage of organization-forming?
Yes, providing autonomy to skilled and talented individuals is beneficial. Moreover, assessing individuals is often simpler than evaluating larger organizations, especially when one has robust connections within specific fields. Fewer resources are lost to operations and overhead, and it's easier to observe exactly what the funding impacts. Also, I would suspect the top performers at an institution/organization are often responsible for most of the positive impact. For example, if you want more great musicians, you'd have more success giving money to the very top music school graduates in underprivileged cities or countries rather than just giving money to music education institutions. This also applies to research in technical subjects and even global development (giving money or resources directly to poorer people).
However, this is all a directional claim. Funding organizations is not always an ineffective option (as mentioned, it is particularly effective for legible quantifiable work such as AMF). Still, some of this infrastructure may benefit from private financing, e.g., tuition fees, or the government could establish it as public infrastructure.
As someone with unusual ideas and an allergy to organizational drift, I approve of this message.
I don't think we currently have organizational patterns capable of fully empowering individual choicemaking. Any organization comes with narrowing of purpose, implicitly or explicitly, and this particularly detrimental to most out-there ideas. Not all out-there ideas are good but those that are should be pursued with full flexibility.
When trying to improve the world via philanthropy, there are compelling reasons to focus on nurturing individual talent rather than supporting larger organizations, especially those with nebulous and unquantifiable goals.
Tyler Cowen's Emergent Ventures is a prime example of this approach, providing grants to individual entrepreneurs and thinkers who aim to make a significant societal impact. When asked how his approach to philanthropy differs from the Effective Altruist approach, Cowen answers:
This model has been effective in the scientific community. Funding individual researchers rather than projects has been shown to foster more novel ideas and high-impact papers, emphasizing the value of the person-first approach.
The person-first approach is an effective diversification strategy. You are outsourcing the task of problem prioritization and strategy to highly competent individuals and trusting the result. This seems wise; I expect competence in executing effective solutions to problems to be highly correlated with competence in identifying important problems in the first place.
In the same way that angel investors can significantly influence the success trajectory of startups, investing in highly competent individuals early on can amplify their potential for making major progress. By observing their academic achievements or impressive abilities early on in life, you can often obtain meaningful evidence that someone can have a major positive impact.
Patronage is also a model well-suited to advancing many forms of creative or personal endeavor that promote a donor’s personal aesthetic or other hard-to-quantify terminal values. Investing in people can create new writing, music, art, and architecture in a more steerable way than generally giving money to these industries.
Why consider this model over donating to larger nonprofits where some employees will also be very talented? The answer lies in feedback loops and organizational efficiency. For-profit companies operate under tight feedback loops; they either provide value and thrive or fail to do so and perish. Nonprofits, however, especially those with hard-to-measure outcomes, lack these feedback mechanisms, making inefficiencies more likely. In larger organizations, many inefficiencies are amplified as coordination problems and operational overhead are more prevalent, wasting resources.
Another crucial variable in deciding whether to donate to larger organizations or lean towards a person-first approach is how measurable the outcomes you are looking for are. Some nonprofit organizations are doing significant legible and measurable good work, for instance, Against Malaria Foundation and the other GiveWell top charities, as well as quite plausibly the Bill & Melinda Gates Foundation. However, this is a small minority. In many cases, it is worth considering whether the problems nonprofits claim to tackle would be better tackled by funding competent individuals or for-profit organizations that can sustain themselves on the open market.
Why should we not assume that talented people will receive enough funding and support to do important good stuff as it is?
Indeed, capitalism provides an inherent mechanism for preference and information aggregation. By default, it makes sense to assume markets are a reasonable source of truth regarding what people want and need. However, free markets are not the silver bullet for all societal challenges, and philanthropy can tackle issues poorly addressed by capitalism. These issues mostly concern helping those unable to participate in markets, such as the very young or old, those living under oppressive regimes, the incarcerated, and animals. The needs and preferences of these individuals will not be well captured in market dynamics.
A particularly important category of unrepresented people is the unborn. Global catastrophic or existential risks disproportionally affect future generations. However, predicting which actions taken today will reduce the probability of existential threats to humanity is hard. The person-first approach may be particularly suited to existential risk reduction. Whereas the predictions and approaches of people at larger organizations and nonprofits will be highly correlated, investing in many different talented individuals with varying viewpoints and ways of thinking could increase the chances of finding a particularly impactful idea. Furthermore, if funding individuals, a greater proportion of the donation will go towards their intellectual contributions and less towards organizational operations and overhead.
To summarize, the most effective ways of engaging in philanthropy are likely focusing on organizations with measurable outcomes and clear, implementable solutions or otherwise adopting the patronage model, funding promising individuals with an innovative mindset.