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Consider giving money to people
Not projects or organizations
When trying to improve the world via philanthropy, there are compelling reasons to focus on nurturing individual talent rather than supporting larger organizations, especially those with nebulous and unquantifiable goals.
Tyler Cowen's Emergent Ventures is a prime example of this approach, providing grants to individual entrepreneurs and thinkers who aim to make a significant societal impact. When asked how his approach to philanthropy differs from the Effective Altruist approach, Cowen answers:
I’m much more “person first.” I’m willing to consider, not any area—it ought to feel important—but I view it as more an investment in the person, and I have, I think, more faith that the person’s own understanding of what’s important will very often be better than mine. That would be the difference.
This model has been effective in the scientific community. Funding individual researchers rather than projects has been shown to foster more novel ideas and high-impact papers, emphasizing the value of the person-first approach.
The person-first approach is an effective diversification strategy. You are outsourcing the task of problem prioritization and strategy to highly competent individuals and trusting the result. This seems wise; I expect competence in executing effective solutions to problems to be highly correlated with competence in identifying important problems in the first place.
In the same way that angel investors can significantly influence the success trajectory of startups, investing in highly competent individuals early on can amplify their potential for making major progress. By observing their academic achievements or impressive abilities early on in life, you can often obtain meaningful evidence that someone can have a major positive impact.
Patronage is also a model well-suited to advancing many forms of creative or personal endeavor that promote a donor’s personal aesthetic or other hard-to-quantify terminal values. Investing in people can create new writing, music, art, and architecture in a more steerable way than generally giving money to these industries.
Why consider this model over donating to larger nonprofits where some employees will also be very talented? The answer lies in feedback loops and organizational efficiency. For-profit companies operate under tight feedback loops; they either provide value and thrive or fail to do so and perish. Nonprofits, however, especially those with hard-to-measure outcomes, lack these feedback mechanisms, making inefficiencies more likely. In larger organizations, many inefficiencies are amplified as coordination problems and operational overhead are more prevalent, wasting resources.
Another crucial variable in deciding whether to donate to larger organizations or lean towards a person-first approach is how measurable the outcomes you are looking for are. Some nonprofit organizations are doing significant legible and measurable good work, for instance, Against Malaria Foundation and the other GiveWell top charities, as well as quite plausibly the Bill & Melinda Gates Foundation. However, this is a small minority. In many cases, it is worth considering whether the problems nonprofits claim to tackle would be better tackled by funding competent individuals or for-profit organizations that can sustain themselves on the open market.
Why should we not assume that talented people will receive enough funding and support to do important good stuff as it is?
Indeed, capitalism provides an inherent mechanism for preference and information aggregation. By default, it makes sense to assume markets are a reasonable source of truth regarding what people want and need. However, free markets are not the silver bullet for all societal challenges, and philanthropy can tackle issues poorly addressed by capitalism. These issues mostly concern helping those unable to participate in markets, such as the very young or old, those living under oppressive regimes, the incarcerated, and animals. The needs and preferences of these individuals will not be well captured in market dynamics.
A particularly important category of unrepresented people is the unborn. Global catastrophic or existential risks disproportionally affect future generations. However, predicting which actions taken today will reduce the probability of existential threats to humanity is hard. The person-first approach may be particularly suited to existential risk reduction. Whereas the predictions and approaches of people at larger organizations and nonprofits will be highly correlated, investing in many different talented individuals with varying viewpoints and ways of thinking could increase the chances of finding a particularly impactful idea. Furthermore, if funding individuals, a greater proportion of the donation will go towards their intellectual contributions and less towards organizational operations and overhead.
To summarize, the most effective ways of engaging in philanthropy are likely focusing on organizations with measurable outcomes and clear, implementable solutions or otherwise adopting the patronage model, funding promising individuals with an innovative mindset.
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