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Shakeel Hashim

Just as there are multiple ways to invest effectively, there are also multiple ways to give effectively. This article covers one way, called "hits-based giving", that approaches charity like a venture capitalist approaches investing in startups.

Donating like a startup investor: Hits-based giving, explained

Warren Buffett and John Doerr are two of the most successful investors in the world. But they made their money very differently. Buffett, for the most part, made his money through "value" investing: he found solid, reliable companies that he thought were undervalued, put money into them, and watched that money go up.

Doerr, a venture capitalist, took a very different approach. He put his cash into incredibly risky startups like Google, Amazon, and Twitter. All those ventures had a very high likelihood of failure (the vast majority of startups fail, after all), and a tiny chance of becoming massive successes — which is, of course, what happened.

There are multiple ways to give effectively

Just as there are multiple ways to invest effectively, there are also multiple ways to give effectively. Some donors take a Buffett-style approach, donating to charities with a track-record of success and a high probability of helping people. Those people might donate to 

 top charities, funding evidence-backed interventions like 

Other donors choose to donate to opportunities where, although success isn't guaranteed, the potential impact they might have if they do succeed is so great that they think it's worth trying. To understand this, we can use the statistical concept of “expected value”, which looks at something’s potential outcomes and the likelihood of each of those outcomes happening to calculate an overall predicted value.

An example will help make this clear. Imagine someone tells you that if a coin lands on heads, you’ll get $100, but if it lands on tails you’ll get nothing. There’s a 50% chance of each outcome occurring, so the expected value of the coin flip is $100 * 50% = $50. This is a really helpful way of evaluating charities, each of which has different potential outcomes and different likelihoods of achieving those outcomes.

Let's say there are two charities, Alpha and Beta. Alpha has a 100% chance of helping 1,000 people, so its "expected value" is 1,000 * 100% = 1,000. Beta, meanwhile, has a 1% chance of helping 1,000,000 people, so its expected value is 10,000. Donors that prefer certainty might donate to Alpha. But to others, Beta’s much higher expected value makes it a better donation opportunity.

This startup-like approach to donating has been dubbed "

", a term coined by Open Philanthropy, a foundation aiming to give away its money as effectively as possible. (Full disclosure: Open Philanthropy provides funding for Giving What We Can.) But hits-based giving isn’t a new idea: there are historical examples of it working really well.

One example comes from the Rockefeller Foundation, a charitable foundation established by oil tycoon John D. Rockefeller, which invested in research on how to improve agricultural productivity. One of its employees, plant pathologist Norman Borlaug, ended up developing the high-yielding wheat strains that fuelled the "Green Revolution". By increasing agricultural productivity, Borlaug’s work helped to massively increase the amount of food produced in the world, bringing millions out of hunger. He is now credited with 

 for his work — which other donors might have deemed too risky to fund. But because Rockefeller was willing to take the risk, a huge number of people were helped.

Rockefeller isn’t the only example of successful hits-based giving. Katharine McCormick, another wealthy philanthropist, was the sole funder of research that led to the development of the birth control pill, which has improved women’s lives all over the world. Without McCormick willing to gamble on the research, we might never have had the pill. It's possible that something similar could happen again. Research into 

 might not pay off, but if it does, it could help stop the next pandemic. 

 could turn out to be infeasible, but it could also eradicate malaria.

Hits-based giving doesn't just involve throwing money at every promising-looking opportunity, though. Instead, calculated risks need to be taken. Because most of the projects you fund will likely fail, you have to make sure that the ones that do succeed will succeed on a gigantic scale, to make up for all the losses you've incurred elsewhere. Looking at an intervention's 

importance, neglectedness and tractability

 is a really helpful way of assessing its potential for impact, and it's why Giving What We Can and many others think about these factors when advising donors how to maximise their impact.

It can also help to diversify your portfolio of grants. Startup investors rarely invest in just one or two companies. Instead, they spread their money across dozens or even hundreds of opportunities. When you're dealing with a low likelihood of success for each opportunity, increasing the number of opportunities increases your overall chance of success. The same is true for hits-based giving: Open Philanthropy says it "might expect just one or two 'hits' from our portfolio to carry the whole". Accordingly, it's 

Hits-based giving involves retraining your brain a bit, too. As 

 about startups, "if a good idea were obviously good, someone else would already have done it. So the most successful founders tend to work on ideas that few beside them realise are good." The same can be true for charities. Trying not to "defer to expert opinion or conventional wisdom" is one way to ensure you're not accidentally missing promising opportunities, Open Philanthropy advises. They do caution, though, that research is important — you should be informed of the conventional wisdom, even if you don't agree.

Lastly, you have to be willing to let go of the need for strong evidence. Some approaches to charity make use of 

, which assess whether interventions are really having the desired impact, and to what degree. That approach can be important in making sure that money goes to the places where it can do the most good. But many promising-looking interventions don't have much evidence backing them up, because they're too experimental or new to have established an evidence base yet. And for certain interventions, it’s almost impossible to conduct research to see if they’ll work. In fact, Open Philanthropy points out that "most past cases of philanthropic “hits” were not evidence-backed in the sense of having strong evidence directly predicting success." To be a hits-based donor, you have to be willing to take a gamble on something — an informed gamble, but a gamble all the same.

Ways to adopt the hits-based giving approach

If all this sounds appealing, you're in luck: there are ways you can adopt a hits-based giving approach. Charity Entrepreneurship, for instance, incubates new charities to solve big problems, and 

 is another way to help — much of this money ends up funding experimental projects trying to safeguard the future of humanity. Who knows: you might even help save billions of lives by funding the next Norman Bourlag.

Michael Townsend

Small donors can have a significant impact by donating to charities that safeguard the long-term future. 

The value of small donations from a longtermist perspective

Despite there being a significant amount of funders already in the space, Researcher Michael Townsend argues small donors can have a significant impact by donating to charities that safeguard the long-term future.

 --- I'm quite confident about my central claim that small donors motivated by longtermism can have a significant impact through their donations. I aimed to highlight the peripheral claims I am less confident about.

 --- I wrote this in my capacity as a researcher at Giving What We Can; though I primarily aimed to articulate my own view, this post also conveys the organisation's current best guesses regarding the value of longtermist donations.

there is approximately $46 billion USD committed to effective altruism

small donors still have significant impact

: if small donors are only contributing a fraction of a fraction of the yet-to-be-dispersed funds given by large donors, doesn't the relative value of earning to give significantly drop compared to other career paths?

I don't think these views are mutually exclusive.

The value of charitable giving relative to certain career options may have changed, but this isn't because we have all the funding we need. So while there may be 

 good opportunities for ambitious projects or careers that leverage the resources already available, I think there is still room for more funding to make a significant difference --- even from (if not 

 from) a longtermist perspective. More precisely:

From a neartermist perspective, donating to top GiveWell charities can save a life for $5,000 USD. It's quite sad that it's so cheap to save a life, but it warrants being called a significant opportunity for impact.

If longtermists can outperform this, that also warrants their impact being called significant.

There are many available donation opportunities that, from a longtermist perspective, seem like they should outperform the $5,000 per life benchmark (and perhaps by a significant margin).

The above is consistent with the idea that most people who could do highly impactful direct work should do that instead of earning to give, even if they could have extremely lucrative careers. There's no cap on how good something can be: despite how much good you can do through effective giving, it's possible direct work remains even better. But in any case, I think that in general, effective giving is not in tension with pursuing direct work. And for many people, effective giving is the best opportunity to have an impact.

The aim of this post is to make the case that the amount of good longtermists can do through effective giving is significant (even if it is relatively less impactful).

I then discuss some implications of this, including:

How it affects Giving What We Can's approach to promoting effective giving

How it helps frame just how high the stakes are on a longtermist worldview

The impact of effective giving from a neartermist point of view

An assumption I'm making here (which I anticipate many people involved with effective altruism to already be generally on board with) is that giving to effective neartermist charities can be cost effective on the order of 'saving a life'

 for something like $5,000 USD. That is, 

GiveWell's cost effectiveness estimates are roughly right

 I respond to some concerns people may have about fungibility in the appendix. The analysis there is quite preliminary (I'm aiming to write something more fleshed out soon), but my current guess is that you can expect this level of cost effectiveness even when you take fungibility into account. I'll use the Against Malaria Foundation (AMF) as the archetypal example in this post.

Going back to the number: $5,000. I think this is a figure that many people have become too used to. 

Compared to the value of a life, it's a trivial cost

. I firmly stand by all the introductory pitches to effective altruism I have given on this basis: it is an extremely sorry state of the world that renovating a family's kitchen in one country often costs more than it would to save a family from losing a child in another.

I think $5,000 to save a life qualifies as being called a very high level of cost effectiveness, giving donors an opportunity for 'significant' impact. Of course, for something to be very high, it has to be high relative to something. In this case, I think the fair comparison is the value of (marginal) consumption from individuals in wealthy countries: things like renovating kitchens, getting takeout more regularly, paying rent in a nice neighbourhood. In 

, this is where the money would otherwise go.

What I'm aiming to avoid here is comparing the value of donations to the value of a directly impactful career. This comparison is indeed extremely important when the two are trading off against each other --- for example, if someone is deciding whether to earn to give or do direct work, or if someone doing direct work is considering spending on themselves to improve their marginal productivity. 

But most of the time this is not the comparison

 --- in these cases, I think it's important to look at the value of donations compared to the actual alternative.

Going back to $5,000: It's not a good thing that neartermist charities are so cost effective --- it reflects a world with major problems that could be fixed at low cost, but aren't. I don't think the situation is better for longtermists.

Why longtermist donations should be at least as cost effective (from a longtermist point of view)

I think longtermists should expect to find donation opportunities with a cost effectiveness at least as high as $5,000 to save a life, and likely much higher. Roughly, this is because:

Longtermists can donate to the best neartermist charities and have the same near-term effects. If they believe the long-term benefits are positive (in expectation) they're already there.

There are other giving opportunities that seem robustly good from both neartermist and longtermist perspectives, such as climate change.

There are likely even more cost effective donation opportunities from a longtermist perspective, though just how cost effective they are is hard to say.

In the appendix, I discuss that what I am saying is not particularly controversial among longtermists; it's certainly not novel. If you are already on board, please feel free to skip to the implications.

Longtermists can donate to neartermist charities

To state the obvious, longtermism does not imply the near term doesn't happen, so longtermists can have the same cost effectiveness in the near term as neartermists can. The difference is that, from a longtermist perspective, the most important moral consideration is what the long-term effects will be.

," using AMF as the example. Greaves argues that whether donating to AMF is positive in expectation will ultimately be decided by the donor's views on its long-term effects. This means a that a donor who thinks AMF's work has positive long-term effects can donate $4,500

 and expect to save a life in the near term, in addition to (in expectation) even more significant long-term benefits. The cost effectiveness would then be significantly greater than $4,500 to save a life.

But Greaves is concerned that this new cost effectiveness estimate is importantly different from the estimates from GiveWell:

The neartermist assumes most of the value of their donation comes from the life saved --- something they can be very confident about, being supported by a wide and robust evidence base.

The longtermist sees most of the value lying in subjective, highly uncertain guesses about the value of extremely complex phenomena (such as about the long-run consequences of increasing the population).

In short, even though the longtermist expects AMF to be even better in expectation than the neartermist, much of this comes from guesses that might not be 

Still, I think it's a point worth making that if a longtermist thinks that 

 have indirect beneficial long-term benefits (and they buy GiveWell's own estimates), then they already think that you can have a substantial impact through donations. On a personal level, I'm very motivated by longtermism and have a general prior that "

" and so feel comfortable in my guess that the indirect long-term effects of interventions like AMF are positive, though some reasonable people could disagree. In any case, my argument here doesn't depend on complex issues around moral cluelessness, given the availability of longtermist donation opportunities that I think escape these challenges.

There are robustly good longtermist interventions that need funding

There are donation opportunities that seem good from both a near-term and long-term point of view: the main example I'll use here is addressing climate change. Reducing carbon in the atmosphere can improve the lives of people over the following years and decades, while also having beneficial long-term effects. By accounting for both these near-term and long-term benefits, I think the best charities mitigating climate change reach the $5,000 per life threshold.

 estimated that the Clean Air Task Force (CATF) has historically had a cost effectiveness of approximately 

. This 2018 estimate is retrospective, and therefore out of date, though there is 

 suggesting that climate change mitigation efforts 

might be justifiable on health grounds alone

. Still, I suspect $5,600 per life would be an overestimate of the near term cost effectiveness of CATF.

However, the $5,600 estimate does not account for the very long-term impacts of CATF's work --- and from a longtermist perspective, this is likely where the vast majority of the impact comes from. Once we account for these long-term effects (for example, decreasing the chance of extreme climate change, thereby lowering the likelihood of global conflict and potentially existential risk more broadly) I think it's very likely CATF currently meets the cost effectiveness threshold of $5,000 to save a life. And even if there are concerns about CATF in particular, they are not the only charity working to address climate change.

I imagine some readers are still not convinced by my claim that there are longtermist donation opportunities with a cost effectiveness at least as high as $5,000. They might:

And think that no charity addressing climate change would be sufficiently cost effective.

And believe that none of GiveWell's charities have beneficial long-term effects.

These seem to me like quite uncorrelated views --- with varying plausibility --- about the specifics of particular charities and causes. And there are other charities that are potentially cost-competitive from a near-term point of view, and seem very likely to have positive long-term effects. For example, 

 --- which works to produce vaccines to fight the next pandemic --- as a potentially promising and scalable giving opportunity (

So while there is often disagreement about whether any specific charity meets the $5,000 to save a life threshold (when taking into account long-term effects) I think the claim that there is at least one opportunity is more robust. And in general, I think we should expect to find promising donation opportunities with room for more funding. 

Even though $48 billion dollars is a lot of money, it's far from being enough to solve the world's problems

There are likely even more promising donation opportunities for longtermists

So far, I've been arguing from a very defensive stance, trying to highlight the most straightforward ways longtermists can expect their donation to be as cost effective as $5,000 to save a life. I think there are other opportunities that are significantly more compelling from a longtermist point of view, although they are somewhat less legible:

. It's difficult to get an estimate for the cost effectiveness of this, but it seems likely to be the best publicly available donation opportunity to reduce existential risk (especially from misaligned AI, which is very 

plausibly the world's most important problem

. This is especially promising if you are unsure about whether there are sufficiently compelling opportunities now, but believe there might be more effective opportunities in the future. For example, it seems likely to me that in the future there will be megaprojects in the longtermist space that will be able to absorb a lot of funding.

You could donate to organisations working to reduce existential risk that have been evaluated and supported by organisations like Open Philanthropy, such as the Nuclear Threat Initiative's 

. Though there is some reasonable concern about fungibility, my current guess is that you are still likely to (perhaps significantly) outperform $5,000 to save a life even after fungibility is accounted for.

You could donate to opportunities unique to small donors. Some of these are listed in 

 and include supporting organisations that can't accept large donations, or helping people you know improve their capacity to contribute to top causes.

The conclusion I'm arguing for here does not seem very controversial among highly engaged longtermists. Though predicting the long-term future is 

 specific charity will be good for the long-term future will be quite fraught with uncertainty, there are many donation opportunities that --- though uncertain --- are extremely impactful in expectation. In some sense, the fact that these opportunities exist is what constitutes (at least the strong version of) longtermism. I discuss this more in the appendix.

A reminder of the claim: longtermist donors can find donation opportunities that are at least as cost effective as $5,000 to save a life, and likely much greater.

We should continue to promote effective giving

We plan on discussing why Giving What We Can (GWWC) is excited to promote effective giving in an upcoming post. I'll leave the positive case for promoting effective giving for that post. For now, I'll discuss one potential concern I've heard from several people.

The concern (which assumes longtermism) is that if people are introduced to effective altruism through effective giving, they might end up retrospectively feeling tricked. The idea is that people might initially buy into effective altruism by being convinced that they can have an incredible impact through donations. If they later come to the view (quite widely held among longtermist EAs) that their donations were trivial (implicitly, 'trivial relative to direct work') they might feel deflated and disenfranchised. They might think that they can't have the impact they'd hoped for, or were promised.

I think this concern has some merit, but can be addressed.

First, at GWWC, we honestly believe that small, longtermist donations (compared to personal consumption) provide an opportunity for 

 from a longtermist perspective. That's the claim of this post, and part of my motivation for writing it is to seek feedback on whether the view is right --- we don't want to be deceptive. If it is right, the individual 

 have the impact they were promised --- it's just that (at least from a longtermist point of view) they might be able to have an even more extraordinary impact by working directly on the world's most important causes.

Second, at GWWC we want to highlight when direct work might be especially impactful, because we think a significant part of our impact can come from increasing the number of people working directly on the world's most pressing problems. This means we often promote 80,000 Hours' work, and more broadly encourage people to get involved in effective altruism. This is an important part of why we're excited to promote effective giving, and something we'll discuss in our upcoming update.

donating is their best opportunity for impact

 --- so we want to put forward the best possible case for it. Though some people might be able to do even more good through direct work, we think it's important for the health of the effective altruism community to celebrate people for doing the best they can in their mission to improve the world. We agree with 

: it seems like a sad outcome if someone donating 10% of their income comes to an EA event and feels like they're being looked down upon because they don't have an "EA job." And I don't think this is just a hypothetical example; I think the meme that direct work is overwhelmingly impactful has caused some harm, and I'm a personal example of someone who propagated it.

Effective giving can be a neglected way to get involved in effective altruism

Before I worked at GWWC, I was heavily involved in community building. During that time, even though effective giving was something I actively did (and was proud of), I pretty deeply internalised the idea that it was ultimately not very significant compared to having an effective career (something I desperately wanted). One consequence of this is that I think I often did a very poor job of introducing people to effective altruism, and probably put some people off it.

A regular part of community building is giving introductory pitches about effective altruism followed by a conversation about how people can get involved. A cartoon example of my conversations looked like this:

Me: "You can do an extraordinary amount of good if you try to be effective about it!"

Me: "Well, the biggest way you can have an impact is through a directly impactful career."

Them: "Great! I'm studying architecture, and my friend here is a pharmacist. What should we do?"

I would then proceed to awkwardly introduce 80,000 Hours, and even more awkwardly try to radically shift their career plans. I don't think I ever succeeded.

 I'd wager my experience isn't that uncommon --- I suspect a fair number of people's first (and perhaps last) exposure to effective altruism is constituted by someone trying to convince them to switch to an EA career.

Obviously, career plan changes do happen --- and when they do, they're really impactful. But my guess is that I would have had greater success in engaging new community members if I had said something more like:

Me: "There are a bunch of ways you can help! The most straightforward way is through charity --- which can be extremely impactful. You can also look at 80,000 Hours' career advice if you're interested in having an impact with your career, which in some cases is the best way to help."

But it's important that this isn't deceptive: you 

 have an extraordinary impact through donating to effective charities.

Putting into perspective how much is at stake

Another consequence of effective giving being impactful is that it provides a way of framing just how much value a longtermist worldview implies is at stake, and just how much good the effective altruism movement aims to do.

Around $50 billion USD is committed to effective altruism.

Right now you can expect a donation to save a life for $5,000 (or potentially less) on the margin.

Perhaps it’d be naive to divide these numbers, but I think it’s likely that doing so would underestimate the amount at stake.

Further, it puts into perspective the strength of the claim that some direct work is magnitudes more impactful than donating. For example, 

 that he values people in important longtermist leadership roles at $400,000--$4 million per year. This is not because he has a particularly bleak outlook on the cost effective donation opportunities (he estimates donating to longtermist charities can do at least 10 times more good than donating to the best neartermist charities) --- it's because he thinks some of these roles have *truly outstanding *potential impact.

The argument I'm trying to make in this post is that longtermists still have the opportunity for significant impact through small donations. I am 

 making the point that people have undervalued earning to give as a career path.

I think these points are sometimes conflated, and I suspect that this had something to do with the pushback against Ben's post.

It's possible for donations to be impactful, but for direct work to be much more impactful. I discuss this more in the appendix, highlighting some reasons why I think more funding within effective altruism might be underrated, but it is in the appendix because it's not my central argument. And in fact, my personal all-things-considered view is pretty similar to Ben's: when someone has a good personal fit for high-impact direct work, they're likely to have more impact pursuing that than earning to give. This view is also shared by Giving What We Can leadership.

If I'm right, longtermist giving can be significantly impactful, and we should not carelessly dismiss it.

You may think it can be impactful, but that there are much better opportunities we should prioritise instead. If so, first question whether the two are actually in tension. If they are, say 

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