What will your legacy be? How will you know that you've invested your time and money wisely? You've built a business or a successful career, and now you are thinking about creating a lasting legacy.
There are many ways to make your mark on the world. The traditional route has been to get a good education, get a job and gain financial independence to provide for your family. Entrepreneurs, like myself, follow a similar path, which is to build a business with the goal of gaining financial independence and making a difference in the world.
Once financial stability has been achieved, entrepreneurs often then look outwards to determine how they can make a positive impact. This usually happens in one's forties and may have been inadvertently characterized as a "mid-life crisis." To me, it's a time to think about what legacy you want to leave behind. I like to say, "Make a living then make a difference."
The Power of Compound Giving
Financial advisors teach clients to start saving for retirement as soon as possible. Nothing beats the power of compound interest. But what about teaching people to donate to charity as soon as possible? If a 25-year-old starts donating to charity on a regular basis, the charity will benefit for many more years, over the span of their career. This is not your parent's philanthropy. This generation wants to quantify their donations and measure their impact.
Effective Altruism is Disrupting Philanthropy
Effective altruism (EA), or as I like to call it, "philanthropy disruption," is a relatively new movement. According to the Centre for Effective Altruism, "Effective altruism is about using evidence and reason to figure out how to benefit others as much as possible and taking action on that basis."
People tend to give to charity because it makes them feel good. Effective altruism applies more stringent standards to help people decide where to donate and how best to donate. It can even help guide them into careers that are considered more ethical.
In other words, this movement provides a more scientific, quantitative approach to giving. Today's young philanthropists are evaluating the impact of potential charities more closely, with the goal of doing the most good for the most people. They may even choose careers based on their earning potential in order to maximize their giving.
One of the main founders of effective altruism is William MacAskill. He is co-founder of The Centre for Effective Altruism, creator of 80,000 Hours, a non-profit, and author of Doing Good Better. I was challenged by his objective measurements of how my time and charitable contributions can make a difference. I hadn't considered that 80,000 hours is the number of hours you have in your career. It made me stop and ask myself these questions, so I'll now ask you: What is the best way you can use your 80,000 hours for good, for the most people?
Can "Good" be Quantified?
In the past, charities were evaluated on factors such as how high was the administrative overhead and how much perceived waste did they have as an organization. Today the EA movement helps people to objectively quantify how much "good" has been achieved. As the ability to measure various statistics improves, you are able to quantify the impact of your charitable giving in increasingly sophisticated ways.
In any disruption scenario, there are dilemmas. There will be those who prefer doing it the way it has always been done. Criticisms of this quantifiable 'good' effective altruism method suggest that using a focus on measurable outcomes creates a bias against systemic change. Some fear that the work of social and political movements toward systemic change may not be as easily quantifiable. But if improving the world in some systemic way will do the most good, then it's generally thought to be the best course of action by effective altruism.
What if Bill Gates Chose a Different Career Path?
Does a Google software engineer who earns $250,000 annually and gives away $50,000 annually have more impact than a non-profit worker who earns $50,000 annually but works full-time on policy change? Should you be "earning to give?" Would Bill Gates have made as much of a philanthropic impact if he had chosen a different career path? These are the questions each person needs to consider and answer for yourself.
What Can I Do to Make a Positive Difference in the World Now?
There are many paths to becoming an effective philanthropist. Maximizing your earning potential by building a successful business or working in a field such as finance, allows you to maximize your earning potential and donations. Working in a non-profit career that works toward systemic change is another option. Starting your own 501(c)(3) may be another opportunity.
Many industries, from taxis to hotels, have been disrupted in the past few years. Perhaps it's time to look at charitable giving efforts through a similar lens? There is no right path that works for every person, but thinking and focusing on the most effective way to spend your 80,000 hours is a good start. What adjustments will you make to elevate your giving game?
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
