With Sam Bankman-Fried on trial for stealing billions of dollars from customers of the FTX crypto exchange has given “effective altruism” a bad name. That’s unfortunate. But the related concept of “earning to give” is fraught with difficulties.
The concept of effective altruism as described on the movement’s website, www.effecvtivealtruism.org, is to use research to make charitable contributions more effective in improving lives. For instance, it will probably improve more lives dollar for dollar to give money to distribute insecticide-treated bed nets in Africa to reduce the incidence of malaria then to endow another chair at Harvard. Also, it’s generally more cost-effective to give to organizations with lower administrative costs. The website recommends that donors look at sites such as GiveWell and Giving What We Can that research the effectiveness of charitable organizations.
Earning to Give
In 2013, the Oxford philosopher of effective altruism William MacAskill wrote an article suggesting that those capable of earning large sums might contribute more to the general welfare by contributing half their salaries to good causes rather than trading their lucrative careers for low-paying jobs directly working for nonprofit organizations. Often referred to as “earning to give,” the argument is that the contributions of these high earners could finance the salaries of several people working for the public good. Those several people can accomplish much more than the high-earning individual could on their own if they themselves worked directly for charitable organizations.
Working at Cross Purposes
Bankman-Fried before the collapse of FTX avowed effective altruism and gave millions to charities and political causes. His example demonstrates an Achilles heel of the earning to give philosophy. It can be used to justify bad acts that enable the individual to earn more money, ostensibly to use the money for good causes. The harm caused by the money-earning activities may well exceed the good created by the charitable donations. This certainly seems to be the case with respect to Bankman-Fried.
But the cross purposes of earning and giving can be even more direct. For instance, what if climate change is a concern of the individual and they give significant amounts to plant trees around the world? Does that justify their investments in fossil fuel companies? Or they might contribute to organizations that promote or provide childcare for working parents. Would that outweigh their work for companies that pay insufficient wages for employees to pay for childcare or whose lobbyists oppose increasing the minimum wage?
Of course, any calculation attempting to compare the benefit of charitable donations to the harm caused by the money-earning activities is fraught with difficulties. Both the harm and benefits are likely too difficult to measure and could vary over time. In addition, they depend on value judgments as to what is good and what is harmful and many activities create both good and bad consequences. One person’s work to prevent hunger may be seen by another as undercutting free enterprise that they believe would bring more people out of poverty. Higher minimum wages would help many workers, but could reduce the profits of small businesses, or force them to lay off some workers. Moving to all-electric cars means the creation of more batteries that require rare-earth elements, the mining of which can be bad for the local environment.
But Still Give and Give Effectively
Given the difficulty of calculating the benefit of earning to give and it’s easy perversion as a justification for any activity that brings in money, it should be rejected. That doesn’t mean that those who do earn large incomes shouldn’t also donate significant amounts. The Giving Pledge founded by Warren Buffet and Bill Gates where rich people pledge to give away at least half their wealth either during life or at death is good example for all those with wealth.
We also shouldn’t throw out the proverbial baby with the bathwater. While earning to give may be a questionable strategy, the research conducted by effective altruism organizations to make sure donations reach their goals makes sense. However, even here, nothing is straightforward. The reporting required to be evaluated by organizations such as GivingWell can itself be a burden on smaller nonprofits, either keeping them off their lists or undercutting their ability to serve their constituents. Here, personal knowledge about smaller local organizations may be the best guide to practicing effective altruism.