The millennials donating 10% of their pay to save the world

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This article titled “The millennials donating 10% of their pay to save the world” was written by Suzanne Bearne, for The Observer on Monday 4th December 2017 07.00 UTC

WITH a six-figure salary from a London private equity firm, it could be expected that Grayden Reece-Smith would be living it up on eye-wateringly expensive holidays or driving a suitably flash sports car around south London, where he lives. Instead, the 28-year-old lives a very different existence to his peers and gives away everything he earns over £42,000 – a figure he calculated he could comfortably live on.

Over the past five years, Reece-Smith has handed over more than £250,000 to organisations such as International Care Ministries, which helps poverty stricken families in the Philippines, and the Against Malaria Foundation. He is part of a growing number of young professionals described as “effective altruists” who claim to use evidence and analysis to accomplish good.

Influenced by his protestant faith, Reece-Smith was tempted to work in the charity sector after graduating but calculated he could make a bigger difference by donating a significant chunk of his salary. He had volunteered as a teacher at a school in Tanzania but believed that earning and giving would be more effective. “I realised that the cost of my flights there could have paid the salaries of two teachers for an entire year.” Instead, he says, he could “stay at home, living a very nice life and still make a huge difference in the world”.

“£42,000 is more than enough to live on and still save,” he says. “I still fill my Isa every year.” He is not frugal – last year he holidayed in Cuba and spent a few grand on a new sofa – but his lifestyle certainly isn’t as luxurious as his colleagues. “I tend to buy branded food products, and I don’t own a car. Other people [on my salary] might have a bigger house. We only bought what we needed – a two bedroom flat; some of my colleagues have four-bedroom houses.”

Effective altruists typically donate regularly to a charity they think will have the most impact rather than a cause that pulls at their heart-strings. Some switch careers to generate more money which can then be given away.

Advocates tend to believe people should explore giving money abroad. The Australian moral philosopher and author Peter Singer, who supports the movement, once pointed out that it costs thousands of pounds to train a guide dog and its user, while less than £50 in the developing world could cure a blind person with trachoma, an infectious eye disease. “You could provide one guide dog for one blind American or you could cure between 400 and 2,000 people of blindness,” he said. “I think it’s clear what’s the better thing to do.”

The Centre of Effective Altruism, based in Oxford, estimates there are between 500 and 1,000 people who identify with the practice in the UK and it is also becoming popular in California.

Singer says many millennials have become interested and want their donations of time and money to have the most impact possible. After leaving Oxford University in 1971, Singer started to donate 10% of his income. As his earnings increased, so did his level of donations, and today he and his wife, a writer, give away 40%. He recommends 10% as an amount many people could afford. “I think it’s an amount that most middle-class people can comfortably afford,” he says. “It depends on how much people are earning and how happy they are to live modestly.” Singer says he leads a happy yet modest life. “I probably holiday less, and in terms of house purchases we live in a one-bedroom apartment [in New York]. We would have perhaps bought a larger apartment if I hadn’t been giving it away but it’s a nice apartment in a good area.”

Emily Dally, 27, earns £48,000 a year as a lawyer for the Department for Business, Energy and Industrial Strategy, and has given away 10% of her salary since she signed the Giving What We Can Pledge three years ago.

“I’d just finished law school and was taking a job in the city and feeling a bit funny about it. I was morally conflicted about whether it was the right thing to do, and I saw this as a good way of carrying on [with her career],” she says. Over the past three years, she has donated about £20,000 to the Against Malaria Foundation.

The amount she gives away has not hugely impacted her quality of her life – she and her boyfriend, Sam, who also gives away 10% of his income, were still able to put a deposit down on a flat in Hackney, east London, last year.

“I might have spent more on holidays or gifts for people, and I suppose I’d be saving more,” she says. “I might question whether I should get that last drink or go to that fancy restaurant, but I still have plenty of money.

“My parents were shocked. Their initial response was, ‘God, that’s a lot. I hope you can still manage.’ They were worried that when Sam and I ever start a family that it might be problematic.”

As a result of the donations from effective altruists, organisations ranked by charity evaluator GiveWell are reporting a jump in donations.

“We’ve seen a very significant increase in donations that we can directly attribute to the growth of the effective altruist community,” says Rob Mather of the Against Malaria Foundation, which saw donations rise 280% to £3.27m in 2012 when it was ranked the number one most effective charity by GiveWell.

Some of the ideas of the effective altruism movement have drawn criticism. Eric Posner, a law professor at the University of Chicago, is sceptical that its focus on giving to developing nations can ever have broad appeal. “For most people, charitable giving is, and will remain, a more emotional and instinctive activity, often grounded in religious commitments, local connections, or personal experiences,” he says. “It might make more sense… to give money closer to home where you can observe how it is used, and may feel stronger emotional rewards than are offered by the rather abstract process of sending money off to a foreign country and never seeing the results.”

Posner is also vocal about a view raised in the effective altruism movement that it can be more effective to choose a career in a higher-paid job in order to donate more to charity. “Many of the highest-paying jobs – say, in finance – will seem reprehensible to the sort of person who is altruistically inclined. I think most people won’t be able to sustain a double life in which they do things they are ashamed of even if it does much good for others.”

Singer is slightly optimistic about the growth of the movement, pointing to a wave of effective altruism groups spreading across university campuses. “Some people suggest there might be a limit, as not everyone will be interested in living more altruistically or thinking about effectiveness, but even if we got 10% of affluent people involved, it could make a big difference.”

By the book

Kat Steiner, 27, lives in Oxford and is an assistant librarian at the Bodleian Education Library. She earns £25,000 per year and receives around £10,000 a year from investments (made by her parents on her behalf). It was while studying at Oxford that Steiner was introduced to the ideas of thinking critically about giving to charity and potentially donating a significant portion of your income. “Studying philosophy meant that we often talked about things in terms of abstract ideas, but this was a more practical discussion of whether it was the right thing to do and the possible consequences,” she says. At first, Steiner resisted signing up to Giving What We Can, a body in which members pledge to give at least 10% of their earnings to charity until they retire. “I was concerned about making such a big decision before I’d even had a full-time job.” However, with many of her friends taking the pledge and Steiner road testing the idea by donating 10% of her income as a trial run for a year, she decided to sign the pledge in 2014. While the librarian says she doesn’t have very “expensive taste or hobbies”, she’s aware that the decision may result in less financial security. “I was concerned that if something very expensive happened, I wouldn’t be able to cope. But I’m pretty happy that I’m saving enough, and my family is financially secure as a whole.”

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