Learning to Give to Charity

Check out GivingWhatWeCan.org and GiveWell.org.

I started donating money regularly soon after my first job in 2007. Mostly to an educational NGO in Pune and three other famous international NGOs that operate in India. I had been a volunteer and core team member of the Pune one since its founding, so I understood its activities and finances quite well. I didn't know much about the other three besides what was on their brochures. I donated to them because they called and asked for money, and nobody else had. I also used to give smaller amounts to miscellaneous things. There was no rhyme or reason to any of it.

Around then I was influenced by the Gates Foundation. I still think it is one of the greatest philanthropic organizations in history. Their work is largely public and gets adequate scrutiny, so one could understand their successes and failures. I am grateful for their contributions to global health. They also have a lasting cultural impact. They make it easy for other billionaires to join their efforts, and in some cases inspire new institutions like Open Philanthropy. Their annual letters since 2009 served¹ me as a good example of systematic thinking in this area. In 2010, the Gateses launched the Giving Pledge, a campaign encouraging billionaires to donate the majority of their wealth. Although I barely had any wealth, I began contemplating the options I might have in the future.

Like many Indians, my parents have experienced steady upward mobility. Thanks to the education that they provided, I have been earning more than them since my first salary. They taught me to live within my means, so I never had trouble saving money. I knew that one day they would pass on to me and my brother everything they had left. I didn't know what I would do with all that wealth. I imagined that if I ever had children they too would find themselves in my position: earning more than their parents or at least enough to be independent, living within their means, and eventually having more money than they need. I resolved that I should give most of my wealth away by the time I die. But resolutions made too far into the future rarely pan out.

Soon after that I moved to the US for grad school. Indians are often advised not to convert every dollar amount to rupees, but it is hard not to with the big figures. My cost of living spiked, income dropped, and savings evaporated. But after graduating, compared to in India just two years earlier, I was making six times more and being taxed fourteen times more. Even with a much lower net savings rate, I was able to quickly repay my debts and once again start accumulating wealth. Though I was still not a big spender, this time I felt more materialistic than when I had lived in India. What if I end up spending all my money on myself and my family?

I continued to give money in an ad-hoc manner, while occasionally thinking about the Giving Pledge. In 2016, I read John Steinbeck's The Grapes of Wrath which left a lasting impression on me. The political debates in the US that year, even though I am an outsider and am not a one-percenter², made me consider my own income and wealth especially as compared to Indians. I reluctantly admitted to myself that I was now rich, that I could pay higher taxes and by implication that I should donate more.

But I was anxious about making mistakes. How should I choose the right organizations to give money to? In what proportions should I allocate money across them? Around this time I also started investing in the stock market. I often made mistakes, even at times costly ones, which didn't fully deter me as I believed I needed to learn how to invest. I realized that I could think of donating money as a form of investment³, with similar dilemmas. Instead of waiting until one day to donate my wealth, it felt wiser to donate regularly and more deliberately, and learn gradually.

So I began experimenting. Each year I increased my donations by a thousand dollars or so. It made me anxious. Getting over past mistakes⁴ was hard enough. First I narrowed down my choices. I mostly donated to IIT Madras (undergrad scholarships), Columbia (SEAS undergrad scholarships), and Wikimedia. The former two because they are my alma mater. The latter because I consider Wikipedia to be an invaluable resource, especially in India and other developing countries where books are relatively scarce and expensive.

A couple of years later I read Peter Singer's The Life You Can Save which deeply resonated with me. I also started regularly reading some blogs and newsletters about related topics. I learnt about various altruistic organizations like GiveDirectly, GiveWell, and Giving What We Can (GWWC). The latter has a pledge similar to the Giving Pledge, with two important distinctions: it is aimed at regular people (not just billionaires), and it encourages donating a percentage of annual income (instead of wealth). I don't do pledges, but I liked the idea. My income usually grew by more than a few thousand dollars a year, so it made sense for my donations to grow similarly.

I switched to donating increasing percentages of my income each year. Though I was still comfortable, in absolute terms by 2019 I was giving thirty times what I used to eight years earlier. Like with any other major spending decision, this raised many second thoughts as well as resistance.

To overcome the resistance I experimented with the timing of donations. Until then I had been making the bulk of them around Giving Tuesday, as that is when most fundraising efforts in the US reach their peak. I now spread them around more, first to other months of the last quarter, then evenly across all quarters. I remained hesitant about monthly auto-donations.

To deal with the second thoughts, I started planning things a year in advance, pre-committing in December how much I would give in the next year, to whom, and roughly when. If my financial situation was not worse than a year ago and if I had no new information, I had less justification to second guess my past commitments. This reduced the pressure of current decisions, but also allowed me to think deeply about my past and future choices.

I was also forced to question how much money non-profits actually need. Columbia has an annual revenue of $5B and an endowment of $14B, but there is no scenario in which it would consider itself self-sufficient and stop fundraising. Wikipedia already reaches most of the world, and should it be unblocked from China and Myanmar, the additional cost of serving those users would be a very small percentage of their current operating costs. I couldn't imagine increasing my donations to them by much. They have strong brands, are good at fundraising, and are not under an existential threat. This was even less justifiable for some other organizations I was giving smaller amounts to.

Around this time I started donating to GiveWell's Top Charities Fund. They almost exclusively fund boring projects like malaria prevention and Vitamin A supplementation in poor countries. Their communication approach works well for me. See the table in this page for an example. I find their goals, activities, costs, and funding needs simpler to understand. It is easier to independently get a sense of whether the world is making progress on the underlying cause. I have become more comfortable with increasing my donations to them than to any other charity.

GiveWell became my second largest monthly expense in 2022 (and largest in 2024), and charity my largest annual expense. I also crossed GWWC's 10% pledge⁵. It has been a long journey. I still don't think of it as a pledge, because if things go south I am more likely to trim that line item before any other expense I have. On the other hand, I feel more committed than I used to, and I plan to keep pushing myself.

Challenges Ahead

Scale

I have always found spending money challenging, and I don't see it getting any easier. Every significant question about charity I had until now was related to scale, whether what I once did makes sense with two hundred times the money. I have also been unusually fortunate in not personally experiencing a downturn until this year, and I expect some learning pains navigating them.

Wealth

Despite a steep increase in my giving, my savings rate remains positive, which is to say I continue to accumulate wealth. As someone who still holds that vague resolution to give it away in my lifetime, I will have to make some adjustments to my current approach. This is an area I haven't given any thought to. In the coming decade I hope to gain more clarity.

India

We are still a lower middle-income country, with 21% of the world's extremely poor. Though I have also steadily increased my donations to Indian organizations, 90% of what I give goes to countries poorer than us. I am happy that it is helping people in need. But I have some unresolved questions in this area like what percentage I should be giving to where I live vs where I am from vs the rest of the world. In the coming years I plan to think more about these and learn more about effective charities in India.

Many thanks to Alex, MCK, and my dad for all the discussions and suggestions.

1. The Gates Foundation didn't publish an annual letter in 2022, but I hope they get back to it.

2. I am also not a ten-percenter by wealth in the US, which is unsurprising given my age. More importantly however, I am a one-percenter by income globally, and I suspect by wealth as well.

3. There are causes like poverty, health, and education, similar to sectors in the economy. There are individual charities, similar to companies. Among them there are established organizations, startups, failures, frauds, and everything in between. There are charity distribution and assessment organizations, similar to funds and analysts. There are questions like when to invest (donate), in what, how much, none of which have simple one-time answers. Analogies are useful only up to a point, so let me not ruin this by taking it too far.

4. In 2010 I donated about ten dollars to Wikileaks after watching the Collateral Murder video. I regret that donation to this day.

5. My total income varies each year, and I don’t know the exact amount until filing taxes the following year. So I plan my donations to be a percentage of previous year’s total income (“adjusted gross income” to be precise). 10% of 2021 income in 2022, 12.8% of 2022 income in 2023, and targeting 13% of 2023 income in 2024.