Thoughts on Giving

Over the last few years, my wife Rebecca and I have continued to discuss and iterate on our approach to charitable giving and I think we have something that we are happy with. I’ve shared it privately with a number of my friends and they found it useful, so I’m putting it out there now not as an example of generosity (many others give much more) nor the only right way to give, but rather a structure that happens to work well for my wife and I.

Firstly, you are neither too poor nor too rich to give. Silicon Valley does a very bad job at charitable giving, in part perhaps because many here are new to wealth and haven’t yet developed the culture around giving (charitable balls, sitting on the Board of the ballet, etc.) or simply haven’t given giving much thought. Even if you have just a few dollars a year you can give, it’s worth thinking about how you can best deploy those dollars to make the change you want.

Somewhat perversely, the wealthy give a lower percentage of their earnings to charity than the poorer; The Chronicle of Philanthropy found in 2014 that households earning over $200k a year donated 2.8% of income while those making less donated 3.5%. So even with a modest 5% of your earnings going to charity you’ll be doing more than most.

⅓ each: local, personal, global

You might be stuck on figuring out how to give and where to give. Let’s start with an overall giving strategy that works for us; feel free to tweak as makes sense to you. We evenly divide our giving between local issues that affect our surrounding community, personal issues that we happen to care about given our life experiences, and global issues that affect those in other parts of the world.

Local Giving

For local giving, good resources are the local library (or affiliated “friends of the library” non-profit), parks & arts, food banks, shelter, and educational foundations. These may also be public institutions enjoyed by you and those you love. Living here in Redwood City, CA in the US, here are our local charities to which we give:

• The Redwood City Library Foundation supports our amazing library.
• The Redwood City Parks & Arts Foundation helps beautify our town and keep our parks clean, safe, and vibrant. (One of the many reasons I love this city!)
• Woodside Terrace Kiwanis offers help to the area’s children.
• The Redwood City Education Foundation supplements public education programs in our school district.
• Second Harvest Food Bank helps feed the hungry.
• Rebuilding Together Peninsula helps shelter the needy.
• Street Life Ministries offers food & assistance to the homeless.
• KQED (our local NPR station)
• Curiodyssey is an interactive science museum for children.

Personal (Cause-Based) Giving

For personal giving, educational missions (e.g. STEM), alumni donations to your high school and/or college, public radio, and mission-oriented non-profits that resonate with you.

• The Lung Cancer Research Foundation. My mom’s battle with lung cancer helped open my eyes to the degree to which lung cancer is radically underfunded vs breast cancer. Care about investing in having women not die from cancer? Your research dollars are far better spent on lung cancer than breast cancer; lung cancer kills more than breast cancer, colon cancer, and prostate cancer combined.
• I sit on the Board of Directors of Hacker Dojo, a non-profit I helped found, and I’m passionate about helping offer spaces for members of the community to level-up their technical skills in a safe and affordable environment, so I give there too.
• Code for America does a fabulous job helping to make the government better with better technology.
• We give to MIT’s alumni fund.
• The Nurse-Family Partnership helps vulnerable families raise healthy and successful children.
• RAICES offers legal assistance to immigrants.
• Feeding America helps the hungry in our country.
• The American Civil Liberties Union (ACLU) helps defend the rights of the oppressed.

Global Giving

For global giving, look to maximize the impact per dollar. Most places in the world are lower cost than the Bay Area, meaning that your dollar invested in improving a situation has the potential to go much further abroad. Instead of chasing disasters, give to agencies that systematically respond to them and prevent them.

• The Against Malaria Foundation purchases and deploys mosquito nets for ~$2.00 each and 100% of your donation will be used for that.
• The Sankara Eye Foundation performs inexpensive operations to restore sight to hundreds of thousands of people a year in India.
• Deworm the World is a program that, at a cost of $0.50/child/year removes parasitic worms from children, and the result of which is overwhelmingly proved to yield better outcomes in schooling, economic outcomes, and health.
• GiveDirectly gives unconditional cash grants efficiently to the poor, which has been demonstrated to result in significant long-term improvements to the health and well-being of recipients and their families.
• Jaago Foundation offers quality education for poor Bangladeshi children at about a dollar a day.
• UNICEF consistently has some of the first folks on the scene of a crisis globally to help children in a wide range of urgent situations.

Matching

Check to see if your company offers charitable matching; this can double your donation power! Google offered $6k/year of matching plus $1k/event for qualified disaster events. This ended up some years offering donors nearly $20k/year in matched donations if timed well. Don’t leave these opportunities untouched!

When Not To Donate

I strongly advise not giving reflexively; if a random charity you don’t know calls you and makes a pitch, they’re almost by definition spending an enormous amount on outreach instead of operating their program. These verge on scams; some non-profits spend only 5% of their funds raised on their mission! Similarly, I wouldn’t give to random non-profits you happen to hear about on untrusted channels, especially ones that seem to have sprung up overnight in the wake of a tragedy.

I also don’t advise giving to individuals such as via GoFundMe. Sometimes what seems a heartbreaking story is a cover for a scam — the person pictured may or may not be the one receiving funds. The dollars given to an individual rarely fix systemic problems; focus your giving on structural solutions that can scale to impact a wide range of people. There’s a fixed amount of “giving horsepower” you likely have and if you fill that by giving a $10 to someone on the street who asked you for money, it would be a shame if that took the place of your thoughtful $100 contribution to a food bank that could have fed twenty — or $1,000 that could have helped offer training and housing to get someone off the street altogether.

Before giving to any non-profit for the first time, I’ll check them out on CharityNavigator; if you can’t find their EIN/name there that should be a huge red flag — you might not be dealing with a charity at all! You can even look at their 990’s (required annual IRS tax filings) to verify that their money is actually going to programs and services and not just staff and/or fundraising.

Donor Advised Funds

If you have appreciated equities or if you expect your income to vary pretty dramatically year-by-year, a great tool to have in your pocket is a donor-advised fund (“DAF”).

A DAF is a special account that you control that has funds set aside for charity. When you give assets to your DAF you can take the charitable deduction at the point-in-time you transfer those assets to the DAF, because it’s a one-way function (you cannot move funds from your DAF back to your own account) and the funds are now irrevocably set aside for charity. You can invest these funds in the DAF so they appreciate and whenever you like you can direct a transfer from the DAF to a non-profit of your choice. (And no, you don’t get to double-dip by taking another deduction when this transfer happens.)

The reason why this is particularly great for appreciated stock is that you get to realize as a charitable deduction the full fair-market value of the stock at the point you transfer it into the DAF and don’t have to pay any capital gains at all. This allows you to have a bigger charitable impact than if you first sold the stock, paid off the capital gains taxes, and then made a charitable contribution of the remainder.

DAFs also allow you to “smooth” your giving through years when your income may be highly variable. I knew a DAF would be a good fit for my family when it became clear I was going to leave my cushy job at Google to start my startup Medcorder in our garage and take a near-zero salary.

I’m a big fan of the Schwab Donor Advised Fund, which is very easy to set up and takes only a small fee (0.1–0.6%/yr of assets).

Wrapup & Disclaimers

If you have inputs and/or feedback about this approach and my advice above I’d love to hear from you. I am a Board Member and founder of the Hacker Dojo above but other than that I’m not formally affiliated with any of the other organizations, nor was I asked (or compensated) to recommend or list any of the above organizations. I list them because they have done great work, are highly effective and efficient, and seemed most likely to help make the world a better place.