Earning To Give In The Wake Of The FTX Scandal

We need people earning to give

Before the recent FTX scandal,¹ I saw a lot of people saying that earning to give was not very useful, because effective altruism had more than enough money. We had these two billionaires, you see.²

The situation with FTX has made the flaws in this argument excruciatingly clear.

Relying on billionaires puts the effective altruism movement in a vulnerable position. If anything goes wrong—if, for example, the billionaire was failing to follow accounting best practices and also committing fraud—then all the money disappears. Of course, a lot of billionaires are respectable people who don’t commit fraud. But Dustin Moskovitz (for example) risks losing much of his money if either Facebook or Asana crashes—which is still a vulnerable position.

Effective altruists should be risk-neutral with regards to impact: a 1% chance of 10,000 impact points is better than an 80% chance of 100 impact points.³ But being risk-neutral with regards to impact isn’t the same as being risk-neutral with regards to money. As you get more money, you spend on less and less valuable things. The effective altruism movement’s first million dollars goes to running GiveWell; its hundred thousandth million dollars goes to buying a very fancy retreat space. You shouldn’t risk the money that would go to running GiveWell in order to have a slightly fancier retreat space.

Therefore, it is significantly better to have ten people with a hundred million dollars of net worth or a hundred people with ten million dollars of net worth than it is to have a one billionaire. The “ordinarily wealthy” earning to giver—someone with a low six figures income—is an important source of security for the funding stream of the effective altruist movement.⁴

I have three takeaways.

First: earning to give is a good career choice for a lot of people. The existence of effective altruist billionaires doesn’t make earning to give that much worse.

Second: effective altruism need to provide support for the low- to mid-level earning-to-giver. It is absurd to expect that a person who has specialized in working a high-earning career can also competently evaluate charities and identify grant opportunities. Division of labor! Specialization! There should be more clear donation options for earning-to-givers that aren’t just GiveWell top charities.

Third: my argument assumes that the changes in wealth over time of one person with a hundred million dollar net worth isn’t correlated with the changes of wealth over time of another person with a hundred million dollar net worth. It’s true that if one guy is a fraud, that doesn’t mean everyone else’s money is fraudulently earned. But the changes in wealth are still often pretty correlated.

In particular, most low- to mid-level earning to givers work in tech. If there is a serious recession in the tech sector, we’re going to lose a bunch of money. I recommend that earning-to-givers not take jobs in tech, unless they have a high level of personal fit, are maintaining the option to switch to technical AI safety work, or similar. Medicine is a good career choice which isn’t particularly correlated with tech. Other good options include finance, BigLaw lawyers, and management consulting. I appreciate suggestions from readers for other career paths.

1. You may say that this post contradicts my tagline but I specifically waited until FTX was olds.

2. Never mind the funding constraints in the global poverty and animal welfare cause areas…

3. Not utilons, some people aren’t utilitarians.

4. Of course, most people are not rich, and most nonrich people have no way to become rich. A relatively small number of high-achieving people are responsible for a disproportionate amount of good in the world, but this should in no way be discouraging for normal people. If your donations save a life once every five years, that is still valuable, even if some other guy is saving five lives a year. My Career Advice for the Everyday Effective Altruist may be relevant.