I’ve always wondered how to split my resources between my own happiness and others’ happiness. One tangible metric for this is donation percentage.
Let’s start with some benchmarks:
- 10% tithe, standard with Mormons and expected of some Christians groups
- 2.2% average American in 2008
- 2.5% zakat for Muslim’s (on total wealth, not yearly income)
- 10% recommendation, 20% max for tzedakah in Judaism
- 10% of income over $100,000 from 10over100.org by founder of HotOrNot
- 50% for billionaires as per Bill Gates and Warren Buffett’s Giving Pledge
- “whatever can be given freely and without resentment, through a feeling of sympathy for those who are in need” from Buddist teachings
- 1% under $105,000, 5% over from The Life You Can Save
- $150-750 estimated cost to save 1 life from TB
- 1,157 – lives I could save if I gave 10% for the rest of my life
- 50% of US donation goes to religious institutions
- 95% more – the amount over the average that the poor donate in the US
In my brief research, the “give until equal” approach, the most stringent, is philosophically backed by two Peters, Singer and Unger. The thought experiment they use to support this perspective is contrasting an immediate, personal need with a global, impersonal need. For instance, if there was a man drowning in a lake and you had to destroy your $500 shoes to save him, would you be morally obligated to? Yes, most say. However, if you get an envelope from Oxfam asking for $500 to save a life in a foreign country, are you obligated to? No, most agree. At the end of the day, these philosophers seem to practically encourage 10-20% themselves.
There is an enjoyment of giving communicated by large percentage givers I find interesting. This may be simply the surface words of a deep moral commitment, however I feel there is a real way in which they somehow derive more pleasure from the gift than they might if they spent the money on themselves.
This small amount of research has led me to this advice for those interested in aggressively achieving a generous donation percentage:
- Donate what you feel
- Start at 2.2%, if possible
- Aim for 10% (esp of income over $100k)
- Focus on enjoyment of your donation. The more you understand the process and appreciate the result, the more you will naturally give.
Myself, I started donating 10% of income when Bebo sold in 2008. It’s large enough to keep me from drowning in guilt and small enough I can relax and work on giving in greater ways. I put the money in a donor-advised fund because I wanted the tax benefit without distributing it immediately. So now the value slowly grows at AEF Online and gets sent out in regularly yearly donations to charities I believe in.
To be honest, I find it quite heartening that most people advocate 10% donation and very, very few advocate >20% donation for anything but the estates of the super-rich. Perhaps there is space to both give and enjoy in this crazy world.
Thoughts?
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Note: This post examines common donation percentages. Later, I may more deeply explore justifications.
PS. I found my inner debate echo’d here: How can I justify having luxuries while others lack necessities?
Also, I now plan to read: The Life You Can Save by Peter Singer
It’s interesting how you frame the range of options, namely as giving of one’s financial resources. Most religions — and most charitable organizations large and small — would argue, for example, that the most valuable resources you could donate are your time and your presence (presence defined as both your physical presence and your attention).
Literally speaking, that probably isn’t true. For example, working 80 hours at an investment bank and donating half your wages to a foodbank results in more resources for that foodbank than would simply working 80 hours at the foodbank itself.
But in one way specifically, perhaps it is true, namely that your time and presence are strictly limited. They aren’t fungible, they have no derivatives, and they can’t be reinvested at a better rate of return for a higher impact donation later. You have a certain amount, and in a world of cancer, TB, autism, dysentery, homelessness, etc., you have to choose where and how to spend them at the unavoidable and tragic expense of not spending them elsewhere.
So while the logic wouldn’t quite hold up — Warren Buffett’s giving 50% of his wealth has a larger impact than if he worked with at an HIV clinic for thirty years — if I’m recognizing the core of your writing correctly, you would need to expand the definition of “donation” to include time and presence.
Hey Andrew, you do make a great point, there are other things to give than a percentage of your monetary resources. And definitely in some cases a give of time and mental focus can be a greater gift. I think it’s great how Bill Gates has not only devoted his money but also his time and intellect to solving some of the world’s major problems, the drive and insight he brings I’m sure makes his money go farther. Giving some of one’s income is important too and I agree with your thought that for some high earners, just working a job and giving a lot of the proceeds away might be a bigger win than volunteering one’s time for a lower-value-creation task.
Hi Darius, I lived in Gavilan 2000-2001, and was referred to your blog by Guru.
My working strategy is to donate 10% of whatever I make above $30,000 to one of the top-rated charities (as mentioned on Charity Navigator and cross-checked with a few others)… specifically monthly donations to MedShare.
$40,000 is what I keep reading as the yearly household income beyond which more money doesn’t really add to happiness. So $30,000 should be plenty for a single dude living in Austin, TX.
Why not donate 100% above $30,000? Why not donate ALL my income? Should my happiness even matter? These are all interesting philosophical questions, but I focused more on a practical question: “What strategy am I most likely to maintain for the rest of my life?”
So far, I’ve kept it up with this one for a year.
Thanks for the comment Phil, that is one of the more generous plans I’ve heard of directly. 10 over 30 is impressive, at 70k it’s already 4k and at 100 it’s 7k, a great sum. And you’re right: there is no clear reason not to donate more, based on the justifications for donating 10%. But when you bring in other practical needs of live, along with the expectations of family and a likely partner, it becomes harder and harder to make the lifestyle choices needed to donate 100% or close to it. Personally, I think it’ll be hard for many generous types to get to 50% until it becomes common to be at 10%. Ie, until others see the value, it’s hard to justify not buying a house, enjoying oneself, etc. Best of luck keeping it up, I think it’s a wonderfully generous plan!