WEBVTT - Giving Done Right w/ Phil Buchanan #908 0:00:00.080 --> 0:00:03.680 Welcome to Hod of Money. I'm Joel and I am Matt. 0:00:03.440 --> 0:00:06.920 And today we're talking about giving done Right with Phil Buchanan. 0:00:26.040 --> 0:00:26.320 Yeah. 0:00:26.360 --> 0:00:30.080 So when it comes to being charitable and giving away money, Joel, 0:00:30.120 --> 0:00:32.160 I think it could be easy for us to dismiss 0:00:32.159 --> 0:00:34.400 our own efforts as just a tiny drop in the bucket, 0:00:34.440 --> 0:00:37.240 at least like on my part, uh huh, no foundations 0:00:37.280 --> 0:00:40.239 in my name, I'm selling hardcore right now. Like I'm 0:00:40.280 --> 0:00:42.519 thinking for a lot of folks out there, maybe you 0:00:42.520 --> 0:00:45.720 know you're giving just when prompted at the checkout register, right, 0:00:45.760 --> 0:00:48.519 so it's just like five bucks on occasion, or maybe 0:00:48.560 --> 0:00:50.640 you actually are being a little more disciplined about it, right, 0:00:50.680 --> 0:00:53.280 you give away a certain percentage of your income, you 0:00:53.360 --> 0:00:56.280 cut a check every single month. Maybe that's the easy 0:00:56.320 --> 0:00:58.480 part you give, but then you don't think about it 0:00:58.480 --> 0:01:01.240 beyond that. But that is not how we approach things 0:01:01.360 --> 0:01:03.720 here at How to Money, we want you to get 0:01:03.720 --> 0:01:06.240 the most bang for your buck, and here to help 0:01:06.319 --> 0:01:08.480 us to learn how to do that is Phil Buchanan. 0:01:08.840 --> 0:01:12.560 He is the president of the Center for Effective Philanthropy. 0:01:12.800 --> 0:01:15.000 He's also the author of the book Giving Done Right, 0:01:15.200 --> 0:01:18.959 where he emphasizes the importance of thoughtful and mission driven giving. 0:01:19.360 --> 0:01:22.240 He is all about providing data driven insights to help 0:01:22.280 --> 0:01:25.199 us to maximize our impact out there in the world. So, Phil, 0:01:25.280 --> 0:01:27.520 thank you so much for taking the time and to 0:01:27.560 --> 0:01:28.560 talk with Joel and I today. 0:01:28.880 --> 0:01:31.080 Thanks Matt and Joel really happy to be here. 0:01:31.200 --> 0:01:32.240 We're glad to have you Phil. 0:01:32.440 --> 0:01:34.480 The first question we ask everyone that comes on the 0:01:34.480 --> 0:01:36.480 show is what do you like to sporgehn Matt and 0:01:36.480 --> 0:01:38.920 I we spend a lot on craft beer, but hey, 0:01:38.920 --> 0:01:40.520 it's okay because we're doing the smart thing with our 0:01:40.520 --> 0:01:42.679 money at the same time, saving and investing for our future. 0:01:42.959 --> 0:01:43.960 What's that spurge for you? 0:01:44.240 --> 0:01:45.920 I'm going to take two if that's okay. 0:01:46.000 --> 0:01:46.440 Oh yeah. 0:01:46.560 --> 0:01:50.440 One is concert tickets, live music. I love to see 0:01:51.400 --> 0:01:55.400 shows and I sometimes spend too much on tickets. And 0:01:55.440 --> 0:01:58.720 the other is I try to push myself to quote 0:01:58.800 --> 0:02:01.680 unquote splurge fill only that is to give a little 0:02:01.720 --> 0:02:05.720 bit more than might feel comfortable to organizations that I 0:02:05.760 --> 0:02:08.800 really really care about. I don't know if that counts 0:02:08.800 --> 0:02:11.320 as a splurge, but I know the first one does. 0:02:11.480 --> 0:02:15.720 Very on mission, I should say to educated. I'm curious too, Phil, 0:02:15.720 --> 0:02:17.760 who have you seen recently? What was the best concert 0:02:17.760 --> 0:02:18.440 in reason memory. 0:02:18.600 --> 0:02:23.919 So a lot of my musical tastes these days are 0:02:24.040 --> 0:02:28.240 influenced by my nineteen year old and twenty three year 0:02:28.280 --> 0:02:32.120 old daughters. So this summer I saw Noah Khan with 0:02:32.200 --> 0:02:36.560 my nineteen year old, which was fantastic, nice, and just 0:02:36.680 --> 0:02:39.600 recently my twenty three year old kind of dragged me, 0:02:39.639 --> 0:02:42.240 and then I ended up having a great time to 0:02:42.840 --> 0:02:48.760 see The Far Side, a maybe somewhat obscure nineties hip 0:02:48.760 --> 0:02:54.280 hop act who were amazing actually, And then actually a 0:02:54.320 --> 0:02:57.240 few nights after that, we went my wife and I 0:02:57.280 --> 0:02:59.959 went also with my older daughter to see Dar william 0:03:00.120 --> 0:03:01.480 who's folks. 0:03:02.200 --> 0:03:03.400 I loved Dar Williams. 0:03:03.560 --> 0:03:07.799 She's a great songwriter, brilliant. We went to college together, 0:03:07.880 --> 0:03:08.880 although I didn't know her. 0:03:09.240 --> 0:03:09.880 Oh that's cool. 0:03:10.040 --> 0:03:12.560 We've been seeing her shows for you know, the last 0:03:12.720 --> 0:03:15.480 twenty years. So lots of different types of music. 0:03:15.600 --> 0:03:17.680 Cool, Okay, yeah, that sounds very eclectic. 0:03:17.919 --> 0:03:20.440 Phil just like scored so many more points with the 0:03:20.480 --> 0:03:21.480 younger listeners than. 0:03:23.040 --> 0:03:24.640 Oh, can I ask one quick question you Pheel? 0:03:24.680 --> 0:03:26.359 Yeah, I think we can talk about music for a 0:03:26.400 --> 0:03:28.440 long time, But I want to know the title of 0:03:28.480 --> 0:03:31.359 your book is giving done right? I'm curious I just 0:03:31.400 --> 0:03:33.400 kind of want to start this episode off by asking 0:03:33.880 --> 0:03:36.240 the inverse question, what's giving done wrong? 0:03:36.480 --> 0:03:45.200 Giving done wrong is thoughtless, arrogant, top down giving giving 0:03:45.240 --> 0:03:50.119 that constrains organizations from being successful or effective. And there's 0:03:50.120 --> 0:03:52.960 a whole lot of it. So I'll give you one example. 0:03:53.480 --> 0:03:56.720 A lot of folks fixate, and I understand why on 0:03:57.480 --> 0:04:01.640 overhead rates of nonprofits. So they'll say how much is 0:04:01.760 --> 0:04:06.080 going to the cause or the program and how much 0:04:06.160 --> 0:04:10.160 is going to quote unquote overhead, And that gets defined 0:04:10.200 --> 0:04:13.000 in different ways, And I like to back people up 0:04:13.040 --> 0:04:15.520 and say, what do you really mean? So if you're 0:04:15.520 --> 0:04:18.600 talking about supporting the food pantry that's serving hungry people, 0:04:19.320 --> 0:04:22.800 are you saying that you want your gift to go 0:04:23.440 --> 0:04:27.919 to pay for the chicken and the broccoli and the 0:04:27.960 --> 0:04:31.600 other food that's served, but not the rent of the 0:04:31.760 --> 0:04:35.760 establishment in which the food is served, or the salaries 0:04:35.920 --> 0:04:39.560 of the staff who coordinate the volunteers to serve the food. 0:04:39.920 --> 0:04:42.600 Because that makes no sense. And if you restrict your 0:04:42.600 --> 0:04:45.919 giving in that way, you will constrain the ability of 0:04:46.040 --> 0:04:50.000 nonprofits to be effective. Similarly, if you think you have 0:04:50.600 --> 0:04:54.680 all the answers to what are the most pressing problems 0:04:54.760 --> 0:04:57.280 or the ways to solve them rather than going in 0:04:57.600 --> 0:05:00.560 more from a place of humility, will make the kind 0:05:00.600 --> 0:05:06.080 of mistakes that we sometimes see billionaire philanthropists make, and 0:05:06.160 --> 0:05:09.680 so that would be philanthropy done wrong or giving done wrong. 0:05:09.800 --> 0:05:11.840 I could say that being an instance of being cheap 0:05:11.920 --> 0:05:14.240 as opposed to more of a frugal approach and looking 0:05:14.240 --> 0:05:17.520 at the overall impact phil Can you talk about like 0:05:17.600 --> 0:05:22.000 America has an interesting philanthropy history. I think that differs 0:05:22.000 --> 0:05:23.640 from the rest of the world. Can you explain why 0:05:23.680 --> 0:05:24.000 that is? 0:05:24.360 --> 0:05:27.560 Sure? I mean, I think that the founding of the 0:05:27.600 --> 0:05:33.520 country was rooted in a desire for religious freedom. And 0:05:33.760 --> 0:05:36.920 you know, freedom of association obviously is built right into 0:05:37.480 --> 0:05:43.160 our Bill of Rights. And in the you know, early days, 0:05:43.240 --> 0:05:49.760 Totokeville discussed about discussed Americans tendency to form, you know, 0:05:49.839 --> 0:05:53.920 associations and groups of all types and and so there's 0:05:53.960 --> 0:05:59.719 this sense of the autonomy to kind of organize around 0:05:59.800 --> 0:06:02.480 the issues that you care about, the freedom to do that, 0:06:02.600 --> 0:06:06.960 the importance of doing that. And then in I believe 0:06:06.960 --> 0:06:13.520 it was nineteen seventeen, the charitable tax deduction became a 0:06:13.560 --> 0:06:15.360 part of the tax code. So there was then an 0:06:15.400 --> 0:06:21.920 incentive to give philanthropically, just as we give incentives for people, 0:06:22.000 --> 0:06:26.800 for example, to buy homes. The notion was we want 0:06:26.839 --> 0:06:30.880 to encourage giving. And so the US has one of 0:06:30.880 --> 0:06:34.440 the highest rates of giving globally. As a percent of 0:06:35.240 --> 0:06:39.920 GDP giving in twenty twenty three was five hundred and 0:06:39.960 --> 0:06:44.040 fifty billion dollars charitable giving, and the bulk of that 0:06:44.520 --> 0:06:48.600 three hundred and seventy four billion was giving buy individuals. 0:06:49.240 --> 0:06:52.200 And well, we think of the ultra wealthy, and there 0:06:52.240 --> 0:06:58.520 are some concerning trends in terms of everyday givers giving 0:06:59.560 --> 0:07:02.640 at lower rates than was true twenty years ago, and 0:07:02.680 --> 0:07:05.240 we can talk about that. It is still also the 0:07:05.360 --> 0:07:10.320 case that the bulk of giving to most nonprofits is 0:07:10.360 --> 0:07:16.240 not accounted for or not rather done by the biggest givers. 0:07:16.280 --> 0:07:20.760 It is everyday givers who are helping fuel local nonprofits 0:07:20.800 --> 0:07:24.360 in every community, who are working on important issues and 0:07:25.000 --> 0:07:28.440 often helping the most vulnerable among us. So it is 0:07:28.480 --> 0:07:33.080 an integral part of what keeps our country going. And 0:07:33.200 --> 0:07:36.200 there's lots to be worried about in terms of the 0:07:36.240 --> 0:07:40.760 strength of the nonprofit sector, the sort of trends related 0:07:40.760 --> 0:07:44.400 to philanthropy, but historically it has been a great strength 0:07:44.400 --> 0:07:49.080 of this country the nonprofit sector supported by generous donors. 0:07:49.480 --> 0:07:52.560 Can you give us like an overview maybe or kind 0:07:52.600 --> 0:07:54.440 of going into some US history a little bit here, 0:07:54.440 --> 0:07:58.080 which is really cool, maybe of the actual good. What 0:07:58.120 --> 0:08:00.400 are some of the things that nonprofits have had the 0:08:00.440 --> 0:08:03.200 most impact on in this country in your opinion. 0:08:02.880 --> 0:08:05.520 There's so much all around us that we take for 0:08:05.640 --> 0:08:13.160 granted that is the work of nonprofits supported by generous donors. 0:08:13.200 --> 0:08:16.640 So in the wake of the pandemic, you know, we 0:08:18.000 --> 0:08:20.240 all rediscovered the trails. 0:08:20.000 --> 0:08:21.320 In our very area. 0:08:21.400 --> 0:08:25.680 You know, all the land conservation, the beautiful places that 0:08:25.720 --> 0:08:29.040 we get to enjoy that are all around us. That's 0:08:29.080 --> 0:08:31.840 an example of something we don't necessarily think about how 0:08:31.880 --> 0:08:34.120 that came to be, that we've got that great path 0:08:34.160 --> 0:08:38.360 to run on. But there's a philanthropy story there. The 0:08:38.440 --> 0:08:41.680 diseases that we don't have to worry about our kids 0:08:42.120 --> 0:08:46.400 dying from, you know, the Rockefeller Foundation developing a vaccine 0:08:46.440 --> 0:08:50.600 in the nineteen thirties for yellow fever. That's not something 0:08:50.760 --> 0:08:56.320 you find most people worrying about anymore. You think about 0:08:57.120 --> 0:09:01.280 medical education and medical schools and way in which philanthropy 0:09:02.679 --> 0:09:07.040 played a role in their development and establishment. I mean, 0:09:07.080 --> 0:09:11.640 there's a philanthropic, you know, story for almost everything we 0:09:11.720 --> 0:09:16.120 think about basic you know, civil rights and some of 0:09:16.160 --> 0:09:19.480 which are are under attack again, their right to vote, 0:09:20.640 --> 0:09:25.520 and the role that nonprofits supported by foundations and other 0:09:25.559 --> 0:09:29.520 donors played in helping to make that happen. You think 0:09:29.559 --> 0:09:32.760 about the progress that's made been made in terms of 0:09:32.880 --> 0:09:37.000 criminal justice reform and the rates of incarceration. I mean, 0:09:37.000 --> 0:09:40.240 there's much more progress to be made, but the progress 0:09:40.280 --> 0:09:43.120 that's been made and things like the disproportionate rates of 0:09:43.120 --> 0:09:46.720 incarceration of black men in this country, the progress that 0:09:46.840 --> 0:09:50.280 has been made has been a result of amazing nonprofits 0:09:50.360 --> 0:09:55.640 like Equal Justice Initiative supported by generous donors, Clean air, 0:09:56.040 --> 0:10:01.959 clean water. These are the result as of environmental advocacy 0:10:02.040 --> 0:10:07.360 to try to get companies to curb their their pollutants 0:10:07.800 --> 0:10:13.160 or to get government to regulate certain activities, and that 0:10:13.240 --> 0:10:16.640 have been successful and that have led to again cleaner 0:10:16.679 --> 0:10:19.400 air and cleaner water than we would have had. The 0:10:19.480 --> 0:10:22.839 list just goes on and on. Museums, arts and. 0:10:22.800 --> 0:10:24.920 CULTURELD would be bleaker is what You're a. 0:10:24.880 --> 0:10:29.839 Solutely bleaker the art that we enjoy, you know, I'll stop. 0:10:30.640 --> 0:10:34.240 No, I mean, regardless of anyone listening could identify with 0:10:34.280 --> 0:10:35.679 some of the different acts you mentioned. We can all 0:10:35.720 --> 0:10:37.440 get behind clean water and clean air. 0:10:37.520 --> 0:10:37.679 Well. 0:10:37.800 --> 0:10:39.959 Yeah, and just to think that, I think you put 0:10:39.960 --> 0:10:41.880 it in perspective really well there that there's a lot 0:10:41.880 --> 0:10:44.000 of things that we enjoy that we have a hard 0:10:44.040 --> 0:10:46.040 time pinpointing where they came from. And to see that 0:10:46.080 --> 0:10:49.200 nonprofits had an active role in the society we live in, 0:10:49.559 --> 0:10:51.960 it just, I don't know, brings a smile on my face. 0:10:52.000 --> 0:10:55.120 Makes me happy that they exist and that there's nonprofits 0:10:55.160 --> 0:10:58.120 doing great work out there, even if their nonprofits I 0:10:58.120 --> 0:10:59.520 don't know about that's that's. 0:10:59.320 --> 0:11:01.199 True, but if you trace it back and dive into 0:11:01.240 --> 0:11:04.120 the history, oftentimes you probably can tie that to charitable 0:11:04.200 --> 0:11:07.079 organizations phil So you kind of hinted at the fact 0:11:07.080 --> 0:11:11.720 that philanthropy, how it's been declining in recent years. Maybe 0:11:11.720 --> 0:11:13.600 shed some light there, like why has that been a 0:11:13.640 --> 0:11:14.959 trend that we've been seeing recently. 0:11:15.160 --> 0:11:18.760 Yeah, it's hard to know exactly why, and I think 0:11:18.840 --> 0:11:22.640 that what I've learned over the years is maybe blindingly obvious. 0:11:22.679 --> 0:11:27.920 But the answer to most questions, you know, when we're 0:11:27.960 --> 0:11:32.160 looking for why is it's a combo platter of reasons. 0:11:33.080 --> 0:11:37.679 But just to start with the problem two decades ago, 0:11:38.320 --> 0:11:41.840 and this data comes from the Lily School at Indiana University, 0:11:42.360 --> 0:11:46.360 about two thirds of American households we're giving to charity. 0:11:47.040 --> 0:11:50.600 The most recent data it's just under half. So the 0:11:50.679 --> 0:11:55.240 rates of giving have declined for a while that I 0:11:56.040 --> 0:12:00.640 wasn't maybe seen as the crisis. It is because there 0:12:00.760 --> 0:12:04.760 was so much wealth creation that the sort of mega 0:12:04.920 --> 0:12:10.040 givers were able to fuel an increase in overall giving. 0:12:10.559 --> 0:12:13.240 That in a way mass the problem of a decline 0:12:13.360 --> 0:12:17.120 in the rate of participation. But now we're seeing that 0:12:17.280 --> 0:12:21.840 flattening out to particularly when you adjust for the inflation 0:12:22.000 --> 0:12:24.160 that has occurred in the last couple of years. So 0:12:24.200 --> 0:12:27.480 we've actually seen year over year declines in giving, which 0:12:27.520 --> 0:12:29.520 is not something that we're used to and which has 0:12:29.720 --> 0:12:34.960 real consequences for vital nonprofits. So to your question why 0:12:35.920 --> 0:12:40.280 there's so many possible contributors, one I think is just 0:12:40.360 --> 0:12:45.160 to decline in trust and institutions broadly in our society, 0:12:45.320 --> 0:12:53.800 more cynicism, you know, polarization rite a sense that a 0:12:53.840 --> 0:12:58.000 sense of distrust in institutions. Essentially, I think that there's 0:12:58.040 --> 0:13:02.160 also there's a lot of religion and religiously affiliated giving, 0:13:02.679 --> 0:13:07.600 and because there's been a decline in religious participation that 0:13:07.640 --> 0:13:12.839 has probably played a role. Folks point to some of 0:13:12.920 --> 0:13:17.920 the impacts on the middle class of the Great Recession, 0:13:18.640 --> 0:13:22.520 even as long ago as it was that that you know, 0:13:22.920 --> 0:13:25.240 played a role fifteen years ago, I guess now in 0:13:26.520 --> 0:13:31.040 some decline in rates of charitable giving. My own sense 0:13:31.120 --> 0:13:35.240 is also that is a society we have not sufficiently 0:13:35.880 --> 0:13:41.080 paid attention to the accomplishments of nonprofits. There's a tendency 0:13:41.120 --> 0:13:45.839 to see nonprofits as lesser than to not think about them, 0:13:45.840 --> 0:13:48.360 as we were just discussing, or when we do, to 0:13:48.520 --> 0:13:51.160 imagine that they might be staffed by people who you know, 0:13:51.200 --> 0:13:53.480 couldn't quite make it in the business world or something, 0:13:53.520 --> 0:13:57.720 when in fact, my view is that it takes everything 0:13:57.760 --> 0:14:00.480 to run a nonprofit that it takes to run an 0:14:00.520 --> 0:14:03.280 equivalent side business, and a lot more. It's a harder job, 0:14:03.760 --> 0:14:06.640 and nonprofit staff are often some of the most talented 0:14:06.679 --> 0:14:09.160 in the country. But I don't know that that story 0:14:09.200 --> 0:14:11.559 has been told, and that there's been a tendency instead 0:14:12.160 --> 0:14:16.319 to focus on the isolated scandals or controversies which are 0:14:16.320 --> 0:14:19.840 real and should be you know, should be addressed, but 0:14:19.960 --> 0:14:24.479 people generalize them and assume that there are widespread problems 0:14:24.520 --> 0:14:28.280 in management or leadership of nonprofits when when that's just 0:14:28.360 --> 0:14:31.480 not the case. So I think it's it's so many 0:14:31.520 --> 0:14:34.640 different things. And I would then turn around and point 0:14:34.680 --> 0:14:36.960 the finger at myself and those of us in the 0:14:37.520 --> 0:14:40.040 in the nonprofit sector who've made careers of this work 0:14:40.080 --> 0:14:43.200 and say we have not figured out how to tell 0:14:43.240 --> 0:14:45.840 the story well enough. And so I think part of 0:14:45.840 --> 0:14:47.600 the part of the blame lies there as well. 0:14:47.840 --> 0:14:51.560 Well, it's interesting you're talking about people who work in nonprofits. 0:14:51.600 --> 0:14:53.400 I think a lot of times you're right, they're just 0:14:53.440 --> 0:14:56.040 as talented, and they often choose on purpose to get 0:14:56.040 --> 0:14:59.400 paid less absolutely able to do work that they feel 0:14:59.440 --> 0:15:02.240 makes more of a difference than going out there into 0:15:03.080 --> 0:15:05.480 generalized corporate America. Not there's anything wrong with that, but 0:15:05.520 --> 0:15:08.440 I think that they're like, yeah, those people are taking 0:15:08.480 --> 0:15:11.280 a significant pay cut off them to do work that 0:15:11.680 --> 0:15:14.480 they think needs to exist in this world. I'm curious 0:15:14.480 --> 0:15:18.280 to what about taxes, how do those impact how people 0:15:18.320 --> 0:15:21.680 give and how much people give? Because like the tax 0:15:21.720 --> 0:15:24.320 cuts and Job Act, in many ways it had some 0:15:24.480 --> 0:15:29.000 significantly positive impacts or other potentially negative impacts, But how 0:15:29.040 --> 0:15:33.360 has that impacted giving and the higher standard deduction just 0:15:33.480 --> 0:15:37.000 means that a lot fewer people gets a tax benefit 0:15:37.520 --> 0:15:39.280 from their donations. 0:15:39.440 --> 0:15:43.480 Yeah, I think that's probably on the list of contributors 0:15:43.520 --> 0:15:46.080 as well, although I mean that's some more recent development. 0:15:46.120 --> 0:15:50.360 And I think as I'm not a policy person, I'm 0:15:50.400 --> 0:15:53.520 certainly not a tax policy person, but I would say 0:15:53.640 --> 0:15:55.400 that it doesn't make a lot of sense to me 0:15:56.120 --> 0:16:00.960 that it is only the wealthiest, right the itemers, who 0:16:01.040 --> 0:16:05.880 we would give an incentive to give. Right. So, so 0:16:06.160 --> 0:16:11.720 I'd like to see universal uh deductibility of charitable gifts 0:16:11.800 --> 0:16:16.040 in our in our tax policy, so that so that 0:16:16.080 --> 0:16:20.600 folks who are you know, everyday people uh making you know, 0:16:20.720 --> 0:16:26.560 regular wages also get also get that level of incentive 0:16:26.680 --> 0:16:29.760 for for charitable giving. So I think it's an issue, 0:16:29.800 --> 0:16:32.800 and and you know what, I honestly think it's one 0:16:32.880 --> 0:16:37.120 of those issues that people should be able to come 0:16:37.160 --> 0:16:42.880 together on across the partisan divide. I'm not sure that 0:16:42.920 --> 0:16:45.160 I have a lot of hope right now about people 0:16:45.160 --> 0:16:47.560 coming together across the partisan divide on much of anything, 0:16:47.920 --> 0:16:51.080 but but this shure should be one area where you 0:16:51.120 --> 0:16:53.080 can imagine some some agreement. 0:16:53.200 --> 0:16:53.440 Yeah. 0:16:53.480 --> 0:16:56.280 So we've we've talked about effective altruism on the show 0:16:56.320 --> 0:16:58.600 before a lot of folks know about that. How would 0:16:58.600 --> 0:17:02.800 you say that effect to valtruism is different from effective philanthropy. 0:17:02.840 --> 0:17:04.840 Could you talk about maybe some of the differences, some 0:17:04.840 --> 0:17:07.000 of the compare and contrast. 0:17:06.640 --> 0:17:10.560 To Sure, Yeah, I would sort of describe effective altruism. 0:17:10.600 --> 0:17:12.240 And you guys tell me if you see it differently, 0:17:12.240 --> 0:17:14.919 because I think it's shifted a little bit. What what 0:17:14.920 --> 0:17:18.080 what what people? How people define it? But as this 0:17:18.320 --> 0:17:24.840 notion that you should be sort of maximizing the impact 0:17:24.960 --> 0:17:31.240 on human lives of your charitable giving and that that 0:17:31.240 --> 0:17:34.680 that's a that's your moral obligation. And Peter Singer, the 0:17:34.760 --> 0:17:37.280 philosopher at Princeton, I think, is sort of the godfather 0:17:37.359 --> 0:17:44.080 of this concept. And I think it's a helpful challenge 0:17:44.480 --> 0:17:48.240 to one's thinking to say, Okay, maybe I should give 0:17:48.800 --> 0:17:53.160 some of my charitable donations to parts of the world 0:17:53.240 --> 0:17:56.080 where the dollar is going to go further and where 0:17:56.160 --> 0:18:00.840 I could say, prevent a death from malaria potentially for 0:18:00.960 --> 0:18:06.840 not that much money, or you know, seriously affect the 0:18:06.880 --> 0:18:10.679 trajectory of someone's life. And I think that's sort of 0:18:10.680 --> 0:18:15.440 a useful intellectual challenge. I think as a practical matter, 0:18:15.520 --> 0:18:22.760 though effective altruism doesn't really work as a defining sort 0:18:22.760 --> 0:18:30.520 of framework for most people. And that's because if taken literally, 0:18:30.600 --> 0:18:34.520 if applied literally, it would mean you wouldn't give to 0:18:34.600 --> 0:18:39.040 the arts, for example. It would mean that you wouldn't 0:18:39.119 --> 0:18:44.240 give locally in your own community if you live, for example, 0:18:44.480 --> 0:18:51.199 in the United States. And so I am skeptical of 0:18:51.240 --> 0:18:54.520 its utility as a practical framework to actually guide people, 0:18:54.600 --> 0:19:00.639 because I think the reality is that philanthropy is rooted 0:19:00.640 --> 0:19:03.880 in our values and our sense of connection to other 0:19:04.000 --> 0:19:08.160 human beings, and so well we need to apply our 0:19:08.240 --> 0:19:14.120 analytic minds to it, we also need to use our hearts, 0:19:14.160 --> 0:19:19.560 and that the two go together. And so I think 0:19:19.800 --> 0:19:27.720 of effective philanthropy as something that allows for more diversity 0:19:27.840 --> 0:19:33.120 in choice of goals based on people's values and interests. Right, So, 0:19:33.760 --> 0:19:36.280 I think, you know, the goals that you guys would 0:19:36.320 --> 0:19:39.320 choose might not be the goals that I would choose. 0:19:39.680 --> 0:19:43.000 And I don't think one set of choices is necessarily 0:19:43.080 --> 0:19:47.480 objectively better than another. I think the sort of pluralism 0:19:48.160 --> 0:19:56.240 of philanthropy, the choice that people have, is a strength. Then, 0:19:57.200 --> 0:19:59.000 but I do think you should have clear goals. You 0:19:59.040 --> 0:20:01.040 should try to know what you're doing and make sure 0:20:01.040 --> 0:20:03.600 that you're giving is consistent with those goals. You should 0:20:03.680 --> 0:20:07.200 try to then give in a way that supports effective 0:20:07.200 --> 0:20:11.280 strategies to achieve those goals. If you want to work 0:20:12.280 --> 0:20:19.760 on a particular issue, whatever it might be, there are 0:20:19.800 --> 0:20:23.639 more and less effective paths to follow, often more and 0:20:23.720 --> 0:20:27.280 less effective organizations to support. So I think that's important 0:20:27.480 --> 0:20:30.760 to pay attention to. And then I think it's important 0:20:30.840 --> 0:20:35.360 to have information that you're looking at to gauge your 0:20:35.359 --> 0:20:39.760 sense of whether the folks you're supporting are are in 0:20:39.880 --> 0:20:42.920 fact making the difference that they intend to make. Are 0:20:42.920 --> 0:20:46.280 they as effective as as you thought they were when 0:20:46.320 --> 0:20:49.200 you made those gifts. Those are important questions to ask, 0:20:49.680 --> 0:20:52.680 But we got to keep the heart and values center 0:20:52.800 --> 0:20:53.920 to this as well. 0:20:53.960 --> 0:20:56.199 I think I like how you mentioned hearts there and 0:20:56.240 --> 0:20:59.159 you said objective truth. It's almost like the difference between 0:20:59.160 --> 0:21:01.840 more of an object of approach to charity and a 0:21:01.920 --> 0:21:05.600 subjective approach, right, It's like, are we talking about some 0:21:05.640 --> 0:21:08.919 sort of absolute impact that these dollars are going to 0:21:08.920 --> 0:21:12.399 have on individuals or maybe the relative impact relative to 0:21:12.400 --> 0:21:13.680 who relative to you? 0:21:14.080 --> 0:21:15.840 And as you know, you can see in front of 0:21:15.840 --> 0:21:16.600 your eyes, Yeah, and. 0:21:16.560 --> 0:21:17.760 As you know, like I mean, this is a personal 0:21:17.800 --> 0:21:19.680 finance show, and so much of kind of the decisions 0:21:19.720 --> 0:21:22.280 that we make do have to do with personal preference. 0:21:22.280 --> 0:21:23.800 So I like how you distinguished the two there. 0:21:23.840 --> 0:21:26.879 I want to ask specifically about you talked about the 0:21:26.920 --> 0:21:29.720 fixation on overhead, and that's something Matt and I've talked 0:21:29.720 --> 0:21:32.840 about on the show before too, and maybe we should 0:21:32.880 --> 0:21:35.440 probably think a little differently about that. This conversation is 0:21:36.320 --> 0:21:38.480 making me want to think about what other things a 0:21:38.520 --> 0:21:40.800 nonprofit might be doing, and not just thinking about how 0:21:40.840 --> 0:21:43.359 efficient are they, but what are some of the best 0:21:43.400 --> 0:21:46.280 resources for finding the most effective charities? And how do 0:21:46.320 --> 0:21:48.160 you judge whether or not a charity is effective? 0:21:48.320 --> 0:21:52.320 Yeah, I mean those are really difficult questions because there's 0:21:52.359 --> 0:21:55.200 not like a universal metric by which we can compare 0:21:55.640 --> 0:22:00.720 the organization and working to improve graduation rates in Cleveland 0:22:01.440 --> 0:22:08.040 against the organization working to reduce CO two emissions, you know, 0:22:08.200 --> 0:22:14.440 in Brazil. The metrics are different, and so that's why 0:22:14.480 --> 0:22:17.960 I think people gravitate toward overhead because it is something 0:22:17.960 --> 0:22:23.439 you can compare different organizations using the same ratios. But 0:22:23.560 --> 0:22:26.880 that doesn't mean that you should look I think it's 0:22:26.960 --> 0:22:31.080 reasonable to say, well, what does this organization's budget look like, 0:22:31.200 --> 0:22:33.560 how are they allocating it? You know, I think it's 0:22:33.600 --> 0:22:36.640 reasonable if two organizations are doing essentially the same thing 0:22:37.480 --> 0:22:40.800 to look at the budget relative to the amount of 0:22:40.840 --> 0:22:43.600 that thing that they're doing. Although it's relatively rare, you're 0:22:43.640 --> 0:22:47.480 going to find that apple to apple kind of comparison. 0:22:48.000 --> 0:22:51.840 But honestly, what I would ask is what is the 0:22:51.960 --> 0:22:54.080 organization trying to do? It comes back to what I 0:22:54.119 --> 0:22:56.120 was saying before. What are their goals, what are their 0:22:56.160 --> 0:23:01.120 strategies for achieving those goals? And what indicators are they 0:23:01.240 --> 0:23:04.800 using to assess progress? Can they tell you a story 0:23:04.800 --> 0:23:10.440 that makes sense that answers those basic questions. If they can, 0:23:10.800 --> 0:23:13.239 then they're in the best position to decide how to 0:23:13.359 --> 0:23:16.919 allocate your gift. And if they're investing in something that 0:23:17.000 --> 0:23:22.000 some might categorize as overhead, like increasing staff salaries so 0:23:22.040 --> 0:23:25.520 they can retain the best people because they're having trouble 0:23:25.600 --> 0:23:31.160 retaining their frontline employees or making technological improvements that will 0:23:31.200 --> 0:23:34.119 help them do their work more effectively, do we really 0:23:34.160 --> 0:23:37.480 want to disincentivize them for doing that? And if we 0:23:37.520 --> 0:23:42.800 don't trust the leaders of organizations enough to be able 0:23:42.840 --> 0:23:47.960 to make those judgments about how to allocate resources within 0:23:48.119 --> 0:23:51.919 their budgets to pursue the mission that they're dedicated to. 0:23:52.000 --> 0:23:54.440 Then why are we funding them at all? And then 0:23:54.440 --> 0:23:57.119 in terms of your question about well, where do you 0:23:57.160 --> 0:24:02.080 go to figure this out? I'm not a huge fan 0:24:02.359 --> 0:24:07.840 of some of the popular sort of charity rating websites 0:24:07.880 --> 0:24:11.680 because they do tend to be too focused on these 0:24:11.680 --> 0:24:15.760 financial ratios, which I think are not helpful out of context, 0:24:15.760 --> 0:24:18.800 and which rightly varied based on the kind of work 0:24:18.800 --> 0:24:21.080 that are being done, and then people apply them without 0:24:21.119 --> 0:24:25.639 that context or nuance. So where do you go? I 0:24:25.680 --> 0:24:29.280 think your local community foundation is a great place to start. 0:24:29.359 --> 0:24:33.919