Tuesday, November 10, 2015

Giving the Clock

One of the first lessons in the mathematics of finance is 'The time value of money'. The maths isn't that complicated. It just means money is worth less a year from now, than it is today. Inflation nibbles away at it if it isn't doing anything productive. Add to that the idea of 'Opportunity Cost', the idea that if something or someone is doing one thing, you should consider the cost of what they aren't doing, and these two concepts radically change the way you think about things. Everything is a trade off. You start to focus on where you get the best bang for your buck. When it comes to charity, the idea may be that you would be better off spending an hour of your time working, and giving that money away, than giving that hour away.

Money tomorrow (Future Value) is worth less than money today (Present Value)

A lot of philosophy can descend into spirally debates about esoteric word meanings. Peter Singer is a much more practical philosopher looking at things that impact daily life. What should you do if you want to do good? I have read some of his books, but have saved his new one for Movember. I have spent the last 5 years donating my upper lip to the cause of men's health - more specifically Testicular and Prostate Cancer, and Mental Health. I think it is a great charity. But if you watch the clip below, the idea for the charity focus came second. The novelty of Movember was that it made fundraising fun, and connected to something people care about. Singer has spent a career taking a complete look at the idea of 'Effective Altruism'. What is the best way to make a difference?

I have never spent much time stepping back to look at which charities are the most effective, which problems are the most pressing, or where my energies would best be focused. For the most part it has just been a case of jumping to whatever caught my attention. I also haven't often stepped back to think what was important to other people. Learning through mistakes and all that, I once got pulled aside by a couple to explain to me that they were very conscious in their charity giving. That I had made them feel uncomfortable by publicly pushing them to donate to something I was raising money for. I had set a goal of getting a small contribution from everyone. My trick for the people who didn't want to, was that I offered to give to a charity they liked if they gave to mine. I also wasn't afraid of making a spectacle of myself or (unfortunately) others.

It is tricky. I do think we should put some pressure on people to give more generously. A lot of people claim that we should be more supportive of those in need, but don't in fact give very much away at all. However, if all fundraising does is shift where they would have given money to the causes I care about more, I am less convinced that that is a good idea. It just means the loud mouths get the financial backing. I am a loud mouth. So, for example, should we be backing the moustaches, charity runs, bake-offs etc.? I like supporting my friends efforts, so I usually do chip in. But I haven't put the time in to really think about where and why my donations are going where they are going. The couple that took me aside had. 

Another issue with charitable giving, when wanting the money to 'do good' is the risk of being colonial about it. Are people going out and enforcing their view of the world on others in an attempt to be helpful? How much of the money gets spent on administration and salaries for those trying to help, relative to the actual beneficiaries? I am no expert on this stuff, but I like the idea behind organisations like GiveWell which does due diligence on various charities, and GiveDirectly which minimises complications by cutting out middlemen.

But as Tom showed in 'Crisis, what Crisis', there is something powerful in giving time. Some intangibles aren't considered when thinking about the most quantitatively effective way of giving. The minute you look at the 'time value of money', you also start enforcing the 'money value of time'. Some time can be sold, but some time is priceless and we should savour the ability to go off the clock.

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