Thoughts on patient philanthropy

post by Tobias_Baumann · 2020-09-08T12:00:46.399Z · score: 14 (5 votes) · EA · GW · 5 comments

This is a link post for





Comments sorted by top scores.

comment by Benjamin_Todd · 2020-09-10T19:14:57.527Z · score: 4 (2 votes) · EA(p) · GW(p)

Thank you for the certainty equivalent calculations, that was interesting.

comment by MichaelDickens · 2020-09-08T16:38:03.232Z · score: 3 (2 votes) · EA(p) · GW(p)

Risk-free interest rates are currently very low. Therefore, patient philanthropy can only work with risky assets, such as stocks.

This isn't necessarily true. If you expect risk-free rates to increase in the future, then the long-term average interest rate could still be high enough to justify investing.

If impatient actors dominate the market, then the risk-free rate will always be high enough such that patient actors prefer to invest. This is true regardless of what the risk-free rate is currently. Although I don't know how to reconcile a positive pure time preference with the fact that real risk-free rates are currently negative or extremely low.

comment by Tobias_Baumann · 2020-09-09T22:00:12.349Z · score: 4 (2 votes) · EA(p) · GW(p)

Yeah, but even 30 year interest rates are low (1-2% at the moment). There is an Austrian 100 year bond paying 0.88%. I think that is significant evidence that something about the "patient vs impatient actors" story does not add up.

comment by MichaelDickens · 2020-09-09T22:52:07.713Z · score: 2 (1 votes) · EA(p) · GW(p)

Patient philanthropists might want to wait for hundreds or even thousands of years before deploying their capital. 30 years is nothing compared to the possible future of civilization.

comment by Tobias_Baumann · 2020-09-10T10:48:18.673Z · score: 2 (1 votes) · EA(p) · GW(p)

I was just talking about 30 years because those are the farthest-out US bonds. I agree that the horizon of patient philanthropists can be much longer.