Should you donate to charity when you are young?
Here are some statements that might be true:
- It is possible to invest money in such a way that you make more money on your investment than you lose to inflation.
- The need for charitable organizations will not disappear by the end of your lifetime.
- Problems like hunger and war have been around for thousands of years. They will continue to exist in the future.
- When donating money to certain perennial causes, the utility of your donation is dependent only on how much money you give, and not when you give it (barring certain cases like donating to a group attempting to stop an ecological disaster: money won't bring the rain forest back, but it might save it).
- For example, donating 50 dollars to hunger relief today will do as much good as donating the equivalent of 50 dollars in 20 years.
- Helping people now is not any better than helping people in the future.
- Much like how there is a continuous stream of people needing help, there is a continuous stream of people reaching the end of their lifetimes who are willing to help.
If these statements are all true, then it seems like it would be a good idea to invest any money you were planning on giving to charity and then give the returns away before you die.
However, there is a slight wrinkle hiding in statement 4. While the immediate utility of helping an individual now is identical to that of helping a different individual in the future, the situation is different if you consider that human beings have a tendency to create more human beings.
So called "generational poverty" can result in entire family trees being poor (the core mechanism being that if you are poor, it is more likely that your children will not have the resources to escape poverty, ad infinitum). If a person can be helped now, we could prune a theoretical tree of poor descendants and prevent them from ever coming into existence.
To what extent do the benefits of "pruning", as achieved by donating now, balance against the benefits of saving and compounding your charity? I am not sure, but it does feel like that while the stock market waxes and wanes, the population keeps growing ...