Yearly donations, and why you should give now, not later

As a full-stack developer, I‘m always looking for ways to maximize my positive impact on the world. One of the highest-leverage tools I‘ve found is donating to highly effective charities.

Over the past few years, I‘ve made it a habit to give a substantial portion of my income to organizations working to improve the lives of the global poor, mitigate existential risks, and strengthen the foundations for a flourishing long-term future. In this post, I‘ll explain why I believe more developers should adopt a similar giving strategy and why it‘s so important to give sooner rather than later.

The outsized impact of effective giving

GiveWell is a non-profit that conducts rigorous research to find the charities that save or improve lives the most per dollar received. Their current top pick, the Against Malaria Foundation, can distribute an insecticide-treated bednet for about $4. GiveWell estimates these bednets avert the death of a child under 5 for roughly each $2,300 in donations. The low end of their estimate range is $1,500 per life saved.

To put this in perspective, the median American worker earns about $36,000 per year after taxes. If they gave 10% of their income ($3,600), they would likely save several lives each year. Now imagine if everyone in the tech industry making over $100k gave 10%. The impact would be staggering.

Here are some more examples of the proven impact of effective global health and poverty interventions:

• The Iodine Global Network provides iodized salt at a cost of about $0.01 per child per year. Iodine deficiency in pregnancy causes intellectual disability and costs the developing world an estimated $35 billion in lost productivity annually.

• Evidence Action‘s Deworm the World Initiative supports deworming programs that treat parasitic worm infections in children for about $0.50 per child per year. This improves school attendance, cognitive development, and ultimately increases incomes. Researchers estimate that each $1 spent on deworming yields over $37 in long-term social benefits.

• The non-profit Helen Keller International provides vitamin A supplementation to pre-school aged children. Each $1 spent on supplementation averts an estimated 14-43 DALYs (disability-adjusted life years, a measure of health burden). This means preventing the loss of a whole year of healthy life for less than ten cents!

The key takeaway is that the very best giving opportunities are incredibly cost-effective. You can literally save a life with an amount that wouldn‘t make much difference to your quality of life. If you‘re a typical tech worker, you could donate 10-20% without much sacrifice and your donations would save numerous lives each year.

And this is just considering global health interventions. There are even more speculative but potentially world-changing causes like mitigating existential risks from AI, pandemics, and nuclear war. The researchers Ord and Wiblin estimate that if we could reduce existential risk by just 1 percentage point, it would produce value equivalent to saving 10^52, or 10,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 lives.

That‘s an unfathomable number, but it illustrates the immense stakes involved. Even if such efforts have a tiny probability of success, their enormous potential upside makes them competitive with proven interventions in expectation.

So by giving to highly effective charities – both proven and more speculative – we have huge opportunities to help people today and safeguard humanity‘s vast potential for the future. But you may still wonder: why not invest now and give even more later?

The compounding effects of giving now

Donating to effective charities creates compounding positive effects over time. By helping people become healthier and more productive, we boost overall social welfare and economic growth. This in turn empowers communities to better provide for themselves going forward.

For example, researchers have found that deworming children increases their income and consumption later in life, with an estimated social internal rate of return of 32-52%. This means each dollar spent on deworming effectively produces annual returns of 32-52% when considering the long-term social benefits! Few if any investments can match that.

Similarly, direct cash transfers to the extreme poor have been found to produce lasting gains with annual returns around 40%. Recipients use the money to improve their nutrition, health, education and invest in productive assets and businesses. This sets them on a path of compounding growth rather than a poverty trap.

So the longer we wait to help people, the more we miss out on the ripple effects of improved lives. A child who dies today from malaria doesn‘t get another chance to thrive and contribute to society. Delaying donations doesn‘t just push back the immediate benefits – it pushes back the compounding gains too.

Of course, you could try to invest money, grow it, and then donate more later. But this is far harder than it sounds. It‘s very difficult to get investment returns that beat the best giving opportunities, especially once you consider the risks involved. Actively picking stocks usually underperforms the overall market, and even broad index funds like the S&P 500 have seen 10-year periods with negative returns. Betting on risky investments like startups or crypto is more likely to lose it all than reliably beat safer investments over long periods.

More importantly, the further you push back giving, the more likely you are to never actually get around to it. Your expenses and sense of what‘s "enough" tend to grow to match your means. If you get used to a more lavish lifestyle, it will always feel like you can‘t quite afford to give yet. Whereas if you make giving a habit early on, you adjust to it and it doesn‘t feel like a sacrifice.

Make giving a habit before lifestyle inflation

I‘ve experienced this firsthand as my income has grown as a developer. When I started out, I was making a typical entry-level salary and could only afford to give a little. But I set up recurring monthly donations and pledged to increase them in line with my earnings.

As I‘ve progressed in my career, I‘ve been able to steadily ramp up my giving to over 20% of my income. But critically, I increased my donations in lockstep with each raise – before getting accustomed to having more disposable income. This made it painless to part with a chunk of each boost since I was never used to having it. My lifestyle still improved, just not quite as rapidly as my pre-tax income.

Tech workers are especially prone to lifestyle creep given how fast salaries rise. It‘s easy to fall into the trap of inflating your spending to match. But if you‘re intentional about giving from the start, you can ensure a large portion of your new earnings go to helping the world rather than just accumulating more stuff.

One of my favorite stories is from Jeff Kaufman, a software engineer who has donated 50% of his income (over $2 million) since graduating college. He and his wife Julia live a perfectly fulfilling life and are on track to donate $8 million over their careers. By avoiding lifestyle inflation and saving diligently, they secured their own retirement and now give purely to help others as much as possible.

You don‘t have to be Jeff and Julia to make a big difference. Simply giving 10% is far more than most people ever manage. The key is to start early, give regularly, and don‘t let your spending rise as fast as your income. You can follow this simple formula:

1. Calculate your "enough" budget to live comfortably
2. Treat raises as an opportunity to help the world, not just yourself
3. Set a percentage of income to donate off the top each month
4. Max out tax-advantaged accounts like your 401k
5. Use some remaining discretionary income for yourself and your family
6. Invest the rest in boring index funds for financial security
7. Openly share what you‘re doing to encourage others and keep yourself committed

Safeguarding the future of humanity

As developers, I believe we have a special opportunity and obligation to do good through our giving. We are not just passive observers of technological progress, but its key drivers. The code we write shapes the tools that increasingly govern the world.

With this great power comes even greater responsibility. It‘s on us to wield our abilities with wisdom and foresight – not just advance technology for its own sake, but consciously guide it in positive directions. I fear a future in which misaligned AI systems cause catastrophic accidents, or worse, are deliberately used by bad actors to wreak unprecedented havoc.

Even if we‘re uncertain about such long-term risks, I believe we must take them very seriously given the extreme magnitude of the potential harm involved. Researchers like Nick Bostrom have argued that an advanced AI system with misaligned goals could pose an existential threat to humanity.

And it‘s not just AI – dangers from pandemics, nuclear weapons, climate change, and other emerging technologies could end civilization as we know it. While such catastrophes may seem unlikely or far off, even a small reduction in existential risk could be the most important thing we can do from a long-term perspective.

So in addition to helping people alive today, I believe we have a strong moral imperative to help protect our vast future potential from destructive forces. Each generation is a mere link in a chain stretching into the far future. We must not let that chain break on our watch.

That‘s why I donate a significant portion of my giving to organizations working to mitigate existential risks, like:

• The Future of Life Institute, which advocates for safe and beneficial AI development
• The Open Philanthropy Project‘s work on biosecurity and pandemic preparedness
• The Future of Humanity Institute, a multidisciplinary research center studying long-term challenges

I don‘t know which cause areas will end up being most crucial, so I spread my donations across several promising ones. The Effective Altruism Funds are a great way to do this while outsourcing the hard work of selecting specific charities to expert grantmakers. I‘m glad to know at least some of my money is going towards directly reducing the risks that most threaten our long-term flourishing.

Contributing to the most important code

I see donating as a way to contribute to the most important work going on in the world, akin to how I contribute to open source projects.

When I help maintain a popular library or framework, my code ends up in thousands of applications and benefits millions of end users. A single contribution can have a massive positive effect. It feels great to provide a critical public good.

Similarly, when I fund an effective organization, my money flows to whatever programs their research shows will help the most people. I‘m contributing to a different kind of open source project – the ongoing, distributed effort to make the world a better place.

Of course, open source software and social good are not perfect analogies. Measuring and comparing the impact of charities is much trickier than measuring the usage of a software project. There‘s no package registry tracking the number of lives affected by each philanthropic "dependency."

But there are organizations applying an open source-like approach to evaluating charities and causes. GiveWell, Giving What We Can, The Life You Can Save, 80,000 Hours and others freely publish detailed research and recommendations. They provide an impartial, evidence-based analysis to find the highest-impact giving opportunities.

I rely on their work to make sure my donations are doing as much good as possible, much like I rely on trusted maintainers to assess which open source projects are well-designed and impactful. When a charity consistently performs well and demonstrates outstanding impact, I contribute more. If their cost-effectiveness slips, I reallocate elsewhere.

We‘re used to being data-driven in our technical work. There‘s no reason we shouldn‘t take the same analytical mindset to our giving.

Join the most important "open source" project

Effective giving has brought so much meaning and purpose to my life as a developer. It‘s empowered me to have a massive positive impact with my career that goes far beyond my own code. And I‘m constantly inspired by the brilliant, compassionate people I‘ve met through the effective altruism community.

But this "open source" project needs many more contributors to succeed. While it‘s amazing what a relatively small number of dedicated people have accomplished, there‘s still so much more to do. Billions live in poverty. Existential risks like misaligned AI loom on the horizon. Future generations depend on us to pave the way for a thriving world.

Our community is incredibly talented and accomplished, but we‘re still only donating a tiny fraction of our collective potential. Imagine how many lives we could save, how much suffering we could prevent, how many transformative breakthroughs we could enable if more of us gave more ambitiously, today and for years to come.

You have the opportunity right now to join the most important project in the world. To contribute to something far bigger than any one of us. To leave a lasting positive legacy through the power of your donations.

The time to give is now. Not next year, not in a decade, not in an ideal future that may never arrive. The opportunities to do immense good are at your fingertips today. Seize them and start your own ripple of change.