“Would you budget your kindness please?”
By: Abhi Kumar
Tags: Business, Nonprofit, Budget, Impact

Like a lot of people who grew up in developing countries in the 90s, I eventually grew somewhat accustomed to these kinds of unavoidable signs of poverty and suffering in the world around me. However, I never grew accustomed to the idea that we couldn’t create a new way of doing things. A new system that could, at the very least, alleviate the worst suffering that human and non-human sentient beings endure on a daily basis, in large part due to the misfortune of the condition of their birth rather than any action or inaction that they were actually responsible for.

Now, just by virtue of the fact that you’re reading this means that you’re not among the roughly 4 billion people who don’t have access to the internet. And since you’re reading this article, which (I’d like to believe) is at a fairly advanced grade level of English, you’re also likely from either a developed country with a fairly high GDP per capita or from a developing country where you have an earning potential that is 30–35% higher than your fellow citizens.

Now that we have a vague idea of who you are, dear reader, I ask that you reflect on a simple question.

In your opinion, what is of greater moral importance, one extra drink (say 8€) on a Friday night out on the town or saving 111 unfortunate children from a possible cocktail of malnutrition, anemia and impaired cognitive function that can result in death?

If it is an extra drink, I’d suggest closing this page now.

Not because I’m attempting to demonize the act of drinking or you in any way, dear reader, but simply because the rest of this article rests on you having picked the children and it would be a waste of your time to read any further.

If you didn’t pick the drink, as a thought experiment, I’d ask you to consider what the other relatively insignificant and trivial things are in your life that you’d consider sacrificing to protect a few hundred more children from a truly painful existence.

Uptil a point, most people find that this exercise is fairly easy. Out of the window go all the impulse buys that you still regret, that Amazon delivery you wish you had thought about more before ordering and that extra drink that coaxed you with sweet words under the moonlight and then pushed you into that well called hangover the next morning.

However, there then comes a point where it becomes much more difficult to determine the order of “moral importance” between the things you consume and the people that you can save. For some this may be their family’s insurance, for others it may be the concert that they’ve been waiting a lifetime for.

This article does not seek to judge anyone’s attributions of moral importance but merely to point out that many at this stage, choose to believe that there’s only so much that they can do and that they just aren’t powerful or rich enough (like Bill Gates) to really change the entire world and therefore sink into a fairly stable, forgettable despondency that is occasionally awoken to action at the sight of seemingly high impact giving opportunity. Some others, resolve to become amazing altruists after they begin to earn amazing amounts of money. I relate to these archetypes because I’ve been in these shoes myself, and still continue to be on most days.

Over time however, I’ve found that one approach allows an individual to consistently alleviate suffering they care about, while still living a fairly comfortable life. Simply by budgeting your donations at the start of every year based on what you can give and planning to keep that budget aside (just like rent money) for the organizations/people most efficient at eliminating suffering you care about, you can begin to be as rigorous and intentional with your philanthropic ‘investments’ as you are with our investments in financial instruments like stocks and mutual funds.

But on an “operational” level, what is “giving what you can” exactly?

Some people who have pursued this exercise yearly have found that between 2% and 10% of yearly income tends to be a reasonable person standard for philanthropic giving that does not damage one’s overall quality of life. For students and the unemployed, that number is 1% of your spending money (not including tuition of course), which if you live around Paris, is around one or two drinks fewer every month. More than reasonable in my opinion, given that the beneficiaries can number in the hundreds yearly.

For some, 10% may sound like an exorbitant amount of money to give away every year (while for some this may turn out to be easy). No doubt, this is partly an initial aspirational figure for those who’d like to have something to aim for with their monetary generosity. But on the other hand, it is also significant enough that it does force you to ask yourself what the real critical drivers are for your own idea of quality of life.

Of course, just like the rest of life, there will be years where your control systems will fail, comfort will come first, and you’ll miss your budget targets, to the ire of the boss/angel on your shoulder.

But this doesn’t mean you close down your division/fund and retire.

While the world is rapidly improving, there are still billions of sentient beings that need your aid and finding the right organizations to act through can still be difficult. Websites like Givewell, Life You Can Save, Giving What We Can and Animal Charity Evaluators can be really helpful in directing you towards organizations that are the most effective at alleviating suffering in across different target areas like sanitation, malnutrition, education etc. In time, you may however find that there are better ways of determining where your money and time will have the greatest impact in terms of alleviating suffering, especially in the communities where we live. For instance, like traditional investments, you can estimate your returns but it’s an imperfect science at best. Furthermore, because ‘markets’ for impact are likely even more inefficient than financial markets, there are likely local or widely unknown impact opportunities where you can be more catalytic/generate counterfactual impact.

So go ahead and create your impact budget for next year, visit these websites, become involved in your local community, pick the charities and social enterprises that are high impact and rooted in metrics, tell your friends about what you’re doing, and remember what to do when the bartender offers you an extra round next Friday.

Tips: If you want to deworm way more than 111 children, consider donating to Evidence Action.

Bonus tip: Keep a lookout for matching challenges to double your donations. Essentially, for every dollar/euro you donate, the matcher donates a euro as well. Basically they’re like 2 for 1 offers suddenly appearing for your favourite treat ie. it’s just plain and absolutely silly not to take advantage.