Most of us with the luxury of surplus income for long-term investment consider long-term rates of return. This is how decisions are made among stocks, bonds, real estate, and cryptocoins named after Asian canines.¹ The interplay between risk and reward sits at the core of modern portfolio theory.²

What is effective altruism?

Effective altruism demands similar attention to resource allocation and returns on charitable investment. Our charitable giving must be subjected to the same scrutiny as our profit-seeking investments. At AE, we give 5% of our profits to highly effective charities in the hopes of increasing human agency in the present and future.

For instance, imagine that you consider climate change³ to be an issue demanding immediate attention and charitable donations? How might you determine where your precious resources should be offered? There are sites devoted to this analysis in general, or focused on climate change specifically.⁴

But beyond the legwork performed by well-intentioned analysts, some logical rigor can be applied to effective altruism’s principles for policy-making and strategy.

An example

Consider the hotly-debated topic of carbon offsets. The concept is straightforward, if you’re going to burn fossil fuels and add carbon dioxide (CO2) to the atmosphere, then you should pay for something that will remove the same quantity of greenhouse gas from the atmosphere. However simple to articulate, the implementation is far more complex.

Let’s say AE burns 1,000 trees worth of Carbon in the process of operating its business (we travel via airplane, use electricity to operate computers, etc). AE could simply pay for the planting of 1,000 trees. Easy enough. AE writes a check for the purchase of 1,000 trees.

But we’re still left to calculate the transaction costs in terms of the markup on the trees and the labor/energy costs associated with their planting. Moreover, not all arboreal specimens and locations are created equally.

Why even simple examples are complex

Unfortunately, this is the simplest case. What if AE were to, as many corporations do, pay to prevent the chopping of 1,000 trees? Seems like it ought to be roughly equivalent, evoking childhood phrases about pennies saved and pennies earned. But now we’ve introduced three new problems.

Firstly, someone now needs to monitor, in perpetuity, the 1,000 trees that AE’s generosity has saved. Secondly, someone needs to ensure that the preservation rights are not resold repeatedly. If 10 companies all purchase 1,000 trees to plant, then 10,000 trees are planted. But if 10 companies purchase the privilege of saving 1,000 trees, in the absence of some non-trivial administrative efforts, will 10,000 trees be saved, or will the same 1,000 trees be saved 10 times? Finally, how certain were we that the 1,000 trees “saved” were in a chainsaw’s line of fire? Were they scheduled for destruction next week? Next year? Perhaps never (certainly, there is an incentive for a third world government to designate the least economically valuable trees as “saved”)? These complexities and nuances diminish altruism’s efficacy.

Stepping back

Of course, this all assumes that the only topic worth analyzing is the accumulation of greenhouse gasses in the atmosphere.

Why is the only “good” in this analysis the carbon offset? Doesn’t the economic activity supported by the burning of fossil fuels count for something? Doesn’t that economic activity promote human development and other innovation? Why is the only “bad” the greenhouse gas emission? What about the loss of biodiversity, potential erosion, and nutrient loss in soil resulting from forest destruction?

What if there are better rates of return to be found by attacking an entirely different problem facing humanity?

TL/DR

Our ethics are to do as much good as possible, not specific good. The 5% charitable giving each month is a placeholder for this intention, which can be modified as the world and its neglected problems evolve. Eventually, it will be replaced by our own agency-increasing skunkworks and brain computer interface interface research.

Ultimately, this can be a profoundly powerful motivator. A developer stuck on a bug might wish to be doing almost anything else.⁵ But that developer also knows that their hour of struggle produces profits, some fraction of which supports effective altruism. In that regard, the world benefits from the struggle, and the struggle is less painful if it feels worthwhile.

_{1 Following rampant speculation in the cryptocurrency markets, two software engineers created Dogecoin in December of 2013 as a joke. It (the coin that does not exist in any tangible, physical realm) features the face of a Shiba Inu, referring back to the “Doge” meme,” which originated earlier in the same year. Thus, the first “meme coin” was created. This led to the creation of a “Shiba Inu Coin” in August of 2020, which after 240% growth during one week in October of 2021 was characterized as a pump-and-dump scheme. Even now, Dogecoin remains relevant despite its initial creation as an element of crypto-comedy. In January of 2022, Elon Musk can tweet that Tesla merch can be purchased with Dogecoin, and it jumps 9%. We live in interesting times.}

_{2 This is roughly where I await the arrival of Nassim Nicholas Taleb and his incisive, scathing commentary on the feeble attempts of modern financiers to price risk whilst Levantine traders’ instincts were vastly superior.}

_{3 Effective altruists are generally more optimistic with respect to climate change. The argument essentially simplifies to the acknowledgement that other threats create larger short-term existential risks. Mitigate the largest risks, but focus the majority of the dollars/resources elsewhere.}

_{4 GivingGreen is referenced in this Atlantic article, for those who want to dig a little deeper.}

_{5 But fixing bugs earns revenue, which saves lives!}