Assume you could double your net worth every five years, if you keep working in business. Assume you already have enough to walk away, that you have provided for spouse and kids, if any, and that your dream is to spend the second half of your life, or the fourth quarter, doing something for society. Do you walk out today, serve as a volunteer, raise money? Or do you keep your head down, work on your career, and wait until you have enough dollars to fund your own philanthropic vision? Holden at GiveWell is asking similar questions.
Image financial statements running sideways across the page, from 2007 to actuarial life expectancy. At the foot of each page is your net income and net worth year by year projected.
Plan A - Work to 65. Get very rich. Postpone big gifts or engagement.
Plan B - Quit now. Live on nest egg. Volunteer. Raise money for cause
Plan C - Plan C. Work until you can afford to fund your own philanthropic venture.
Assume that at year of actuarial death the final net worth is the same on all three scenarios. How does one decide between these three possibilities? Perhaps it helps to see the rows of numbers, lined up from now until death as a life line, a life story. Tell me as you run the fingers across the ledger about the life you will lead, what you will do, what you might accomplish for yourself, family and society. Tell me the stories - A, B, and C. What life do you want to live? What will be the outcomes you can imagine or predict for others? How do you net it all out?
A totally rational analysis would have to look at the social investment and social benefits, as well as the personal finances. Dollars into the project, timing of those dollars, versus results out on all three scenarios. That "result equation," however, is almost always speculative. A gamble, a dream, a hope, a determination. But even subjectively, is the cause in question one that seems compellingly to demand immediate action, so that the risk of jumping in right now, without the big bucks, seems worthwhile?
Holden himself is a financial person. I would be interested in further thoughts he has as he makes his own life-determining choices. Courageous of you, Holden, to share your thinking with us on the net. Others can learn from the way you process the factors in your own decision-making. Thank you.
You're right, I am/have been a "financial person," but for this particular decision I didn't do a side-by-side or line-by-line analysis. Instead I thought about two big principles: the value of division of labor, and the value of passion.
With a large and well-coordinated world, the most productive way you can help is generally to do one thing well. And chances are, if you can find something that keeps you up at night and gets you up in the morning, you've found not only what you'll enjoy most, but also what you can do best.
GiveWell started with me just trying to figure out where to donate. I thought of it as an annoying chore and I wanted to get back to my job. But as realized that it is a full-time endeavor, I also realized I find it more interesting than investing. There is a lot of similarity in that it involves betting on things with a lot of uncertainty ... I just personally find the path from dollars to better lives more interesting/motivating than the path from dollars to more dollars.
A lot of my coworkers share my values, but find markets more interesting. They should keep doing what they're best at (and passionate about), and donate what they can spare (in some cases to GiveWell). If the donations happen and the finances work out, the result is the right division of labor to "produce" as much good as possible - and everyone's doing only what they love to do. I think that's a much better solution than dividing the labor by stage of life, in which case the only people thinking about how to translate wealth into good are the ones who've spent their lives and made their name doing something else.
Posted by: Holden | April 21, 2007 at 05:24 PM
You really have quite a captcha here. If it took me 3 tries to get that comment posted, imagine what a spammer has to go through.
Posted by: Holden | April 21, 2007 at 05:27 PM