I incline to the view that giving charity to deserving strangers is morally good but not morally required. To use philosophical jargon, I hold that charity is supererogatory.
However, the fact that I consider charity to be above and beyond the call of duty does not mean that I am unwilling to give. I go above and beyond the call of duty every day. I aspire to moral excellence. Millions of people around the world suffer through no fault of their own. I have plenty of resources to help them, so I am glad to help. As an economist, of course, I don’t just want to express good intentions; I want my donation to do as much good as possible. And while I expect economic growth to gradually reduce global poverty, I seriously doubt that dire poverty will disappear in my lifetime.
Lately I’ve been writing my will to reflect this judgment. From the current draft:
I give and bequeath to
whatever charity is currently ranked #1 by GiveWell, the sum of $100,000
adjusted for inflation since 2013 using the U.S. Consumer Price Index, or 10%
of the total value of my estate excluding our primary residence, whichever is
smaller. If GiveWell no longer exists, I
give and bequeath the same sum to another charity, selected by my wife and
children, dedicated to helping the deserving poor in the Third World in a
maximally cost-effective manner. I
request that my wife and children consult my friends Robin Hanson, Alexander
Tabarrok, Fabio Rojas, James Schneider, Michael Huemer, William Dickens, and
Jason Brennan to help them select the most cost-effective charity with this
mission. If possible, funding for this
bequest should come from my tax-deferred 403(b) retirement accounts.
If you have constructive advice on how to improve this provision, I’m all ears.
READER COMMENTS
Robin Hanson
Apr 29 2013 at 11:41am
I fear “the Third World” might not be a robust reference, and that GiveWell will no longer exist. You might pick some “ex ante % chance that I’d have died by now”, such as 25%, and give the money away when you are at an age where you’ve suffered that % chance. This could ensure at 75% chance that you’ll give the money away yourself.
David R. Henderson
Apr 29 2013 at 11:55am
@Robin Hanson,
Good point about GiveWell, but there’s an easy fix less extreme than yours. Open up the will every 5 years or so and reassess and, if necessary, revise.
Ricardo
Apr 29 2013 at 12:05pm
You’ll need to be more specific about which CPI to use. The most commonly quoted number is CPI-U, but Social Security uses CPI-W, as do many wage escalation contracts. And there is lots of talk about switching to C-CPI-U for Social Security and bracket escalation.
Your goal is probably to capture cost-of-living increases; if so, C-CPI-U is the index most closely aligned to your goals. But since it is *foreign* buying power that you wish to preserve, you may want to augment whatever price index you choose with some kind of foreign exchange factor.
Glen
Apr 29 2013 at 1:26pm
No Tyler?
Tom
Apr 29 2013 at 1:39pm
Millions of people around the world suffer through no fault of yours, either. But at least you are playing with your own money.
Various
Apr 29 2013 at 2:45pm
I assume you know this already but you might need to use a revocable trust, not a will. In many states, if your assets exceed a certain threshold, a will can not be acted upon without going through probate (i.e., the court).
egd
Apr 29 2013 at 3:02pm
Remember, your will is giving instructions to your survivors after your death. It is the only thing that creates a legal obligation. You want to be as specific as possible to make sure that they know exactly what your wishes are.
What do you mean by “consult with”? How about the following:
“‘Deserving Charity’, as used herein, means whatever charity is currently ranked #1 by GiveWell. If GiveWell no longer exists, then the charity shall be selected by my wife and children from a set of N charities selected by my friends…dedicated to helping the deserving poor in the Third World in a maximally cost-effective manner.”
What do you mean “if possible”? Is there a specific amount that must be present to make this bequest ($100k? $200k? $500k?)? If there is not enough, do you want the money to come from another account, or should the bequest be abated?
Can you even transfer funds in a 403(b) in a will, or is the account transferred automatically outside of probate?
Here’s an example that might work:
“‘Retirement Account’ means my tax-deferred 403(b) retirement account [held by/account number/whatever information is necessary to define the account if you have other 403(b) accounts]
I give and bequest $100,000 from my Retirement Account to Deserving Charity as defined above. If there are insufficient funds in my Retirement Account to meet this bequest, then the entire value of the account shall be transferred.”
Richard O. Hammer
Apr 29 2013 at 5:16pm
I offer suggestions on how to screen various charities.
First let me tell how I came to formulate my screening mechanism. I am an outspoken libertarian. Nonetheless, about 20 years ago I was appointed to my local county Board of Social Services. I mistrusted most of the charities undertaken by the Department of Social Services, so I voted “no” on almost every motion before the Board. But I also wanted to be able to explain to the other Board members why I was voting that way. This motivated me to do a careful examination of my own instincts for giving. You might find my analysis useful.
With this background, I would not be quite satisfied with your plan, Bryan. There is the issue of incentives. You know the saying: Give a man a fish, feed him for a day; Teach a man to fish, feed him for a lifetime. How does your giving interact with the incentives of your recipients? Are they striving to learn better habits, or to develop better institutions, so they will not need charity in the future? Or does your charity reward them for learning to satisfy the criteria of GiveWell?
I’ve looked at the criteria of GiveWell. GiveWell might possibly do a good job under my own criteria as described in my analysis referenced above. But if so I see no support for this on GiveWell’s webpage.
You might wonder how I propose to decide which charities deserve my support. I summarize it with a question: Has the applicant done all for himself in the current unfortunate circumstances that I would have done for myself if I found myself in such circumstances? If yes, then the applicant has my sympathy. If no, then I do not want to reward this pattern of behavior.
Here I offer another essay on deciding when charity is appropriate.
Tom West
Apr 29 2013 at 5:26pm
You want to be as specific as possible to make sure that they know exactly what your wishes are.
In general, people don’t care about much once they’re dead, so as long as your will makes you happy while you’re alive, what does it matter to you if your will is not followed to the letter?
MingoV
Apr 29 2013 at 5:53pm
I agree that millions of children suffer through no fault of their own. I’m doubtful that it is so for their parents and for other adults.
Almost all nations with severe poverty are ruled by a kleptocracy or a dictatorship that misallocates revenues. If the adults in such countries do nothing to replace their governments, then don’t they bear some fault for their continued poverty?
Ben
Apr 29 2013 at 7:24pm
Not to belittle your donation (I think it’s a wonderful idea), but this did get me thinking about the “charity” of giving part of your estate away after your death.
You personally do not feel the loss or see the benefit (you’re dead), so in effect you are depriving your wife and children of the money, the choice to make their own charitable contributions with it, and the joy from seeing the results of those contributions.
I would think the more moral, enjoyable, and perhaps more libertarian thing to do would be to either donate while you are still alive (a la the giving pledge) or leave your entire estate to your wife and children with a request that, if they choose to use part of it as a donation, that they consider the types of charities that you approve of.
Handle
Apr 29 2013 at 8:07pm
Matthew 6:16-18
Michael
Apr 29 2013 at 9:21pm
@Handle – I am a Bible-believing Christian, but I can’t agree with your use of that scripture – can Bryan not even ask for advice about how to do good? Perhaps you are upset about his specificity – but this is a legally binding document that needs to be ironclad – if only more people asked for advice on how to do good
John
Apr 29 2013 at 10:10pm
Following the observation about various inflation indices, why not tie the growth rate to your income rate of increase?
Kendall
Apr 29 2013 at 10:14pm
Maybe the adults in such countries don’t do anything because all the adults who tried have been imprisoned or killed. In North Korea if your neighbor is arrested you are also arrested because you didn’t report them. I find it difficult to criticize those who choose not to risk death or imprisonment by opposing the government.
Sean II
Apr 30 2013 at 4:00am
Why not let your giving make a political statement, in the bargain?
Donate the money to victims of the drug war, maybe people who are newly released from prison but whose employment prospects have been irrevocably damaged by the state.
You could call it “Funds for Felons”. Many a non-libertarian eyebrow would be raised.
MG
Apr 30 2013 at 8:42am
I can think of a few ways to further maximize the personal, family, and global bang for the buck of this action. I am not a professional in this field, so take this as an idea in need of professional advice.
Create a charitable trust outside of your estate that will invest $100K in the most efficient/targeted portfolio of developing market (EM) assets. The trust’s trustee could be allowed to distribute (to you and your family) current income in case you needed some liquidity. Otherwise the $100K would grow and at your death the remainder principal plus undistributed growth will pass on to the designated charity. This entity may or may not bee the entity that helped set-up the trust.
Some points to ponder:
The bequeath should have the same effect as the transfer via will of removing the future value of the bequest from your estate.
There should be no probate.
The structure would allow you to take an immediate charitable deduction (it won’t be $100K, but it would be something).
Investing the bequest while you are alive in EM assets is not charity, but like trade, has the effect of letting the invisible hand of the market do its benificence.
Investing in EM index funds is the most efficient way to do this, but if you think they target too narrow a segment of the asset/developing world, a more targeted approach is possible.
Investing it in EM assets grows the future value of the bequest at a rate which, incidentally, may provide the eventual recipients of a more relavant “hedge”.
Structuring costs could be minimized if the charities in question have already done the heavy legal lifting.
Tom West
Apr 30 2013 at 1:56pm
n North Korea if your neighbor is arrested you are also arrested because you didn’t report them.
Doesn’t that depopulate the nation after the first arrest? 🙂
Brian
Apr 30 2013 at 6:07pm
Some of Givewells top charities give money to U.S. causes. You might want to specify that it should be the highest ranked charities for third world causes. Also you might want to track Givewell methodology over the years. Many NGO’s that start out well seem to have a tendency to drift to the left not to the right.
However the way I understand your will is that your method is actually kind of lazy. I know you hope for another 30+ years but I personally think keeping track of what None-profits you agree with and can see are doing good and make a short list and periodically update your will. If it happens to coincide with Givewell that is fine then you can use Givewell. However you are giving the amount of money that can buy small house. Should you not do the amount of research on the non-profit as you would if you bought the house?
I mean how much does it really cost to update a few nouns in your will ever few years a tank of gas?
My choice would be if you have not updated your list in a given specific amount of time and the charity/charities no longer exist then use Givewell.
Kendall
Apr 30 2013 at 6:14pm
That only applies to those living next to people who are arrested for cause. You don’t get arrested for living next to someone who was arrested for not reporting on their neighbor.
Someguy
May 2 2013 at 11:52am
My thoughts: more distributed- smaller organizations to make more impact.
There are thousands of small and local charities too small to ever be ranked but are extremely efficient as can be discovered by local inspection. I live in a very poor community with a 17% unemployment rate; however there is still a charity comprised of some of the poorest that gives the most to clothe and feed the poor… Even use money to help support struggling small businesses!
It’s up to you but I would do 5-6% (50-60k) Givewell and then 4-5% (40-50K) distributed between 1-5 local small (but high impact charities) you have vetted yourself and have the Caplan stamp of approval.
Just my two cents.
Akech
May 2 2013 at 12:55pm
“Almost all nations with severe poverty are ruled by a kleptocracy or a dictatorship that misallocates revenues. If the adults in such countries do nothing to replace their governments, then don’t they bear some fault for their continued poverty?”
The problem in many instances is not the failure to replace a bad government but with what to replace it with. In Sudan, popular uprisings by adults of that country overthrew a government in 1958, 1969, 1985, and 1989. Whether a country remains poor or not seems to have less to do with the system of governance it practices but much more to do with the class governing it. Countries such as Singapore, Rwanda, and China are pretty much ruled by dictators and yet they are doing much better than some countries with democratic systems.
Comments are closed.