Here's a quotidian piece about resource allocation, a
yawner, so perhaps you should click elsewhere before you read further. The main excuse for posting it is my pronouncement
when I started this blog that I would use it as "a diary. But
not the type of my youth, books with lock and key that said, 'These are my thoughts! Hands off!' Nowadays, one
lets it all hang out."
Although what I've written below is fully worthy of the lock and key—not
because it's so private, but because it's so dull—it might yet have some value compared
to what is daily posted on Facebook.
I start by saying how impressed and heartened I am that so
many moguls do enormous good with their wealth. Bill Gates is worth more than $50 billion. (Imagine: that's a million times the median annual salary in the U.S., and its
earnings alone are some 50,000 times that salary!) He established the Bill and Melinda Gates Foundation, to
which he and his wife are devoting their full time, and through which they plan
eventually to spend a substantial fraction of their fortune on charitable
activities world wide. Warren
Buffett, currently worth slightly less than $50 billion, has pledged to give
away 99% of his assets, choosing the Gates Foundation as his vehicle. Michael Bloomberg, worth a mere $18
billion, has donated billions to his favorite causes. Even the very nouveau riche Mark Zuckerberg, only 28 and clocking in at nearly
$18 billion, just a few weeks ago gave away $500 million.
What should those of us with scantier resources do? Unlike the moguls, we can't by
ourselves ameliorate the big problems in the world at large: eliminating major
diseases, bringing sustenance to whole countries, or transforming education on
a large scale. We wonder how
we can most effectively allocate our charitable contributions to more limited
goals. How can we get the most
bang for our bucks?
In years past, I've not been particularly organized in
allocating charity dollars, often giving in the spirit of the moment and to
causes that are at some remove from me, whose results I cannot easily
gauge. That nebulous approach now
seems irrational to me. Since
contributions of a size I can afford are meaningless in addressing the big
problems, I've switched to more-focused giving. I've begun to concentrate on three tiers of organizations
where I believe I can make a significant difference and/or to which I feel an
important personal connection.
They are, in descending order of importance to me:
(1) Schools where I can
help individual youngsters—particularly those from minority groups—get an
education they would not be able to get otherwise. I have already devoted entries in this blog to three such
schools [1,2,3]. This tier is a targeted "pay
forward" to future generations of the society in which I live, in return
for what I have drawn from it.
(2) Institutions I can
directly pay back for what they brought to my life, e.g., service organizations
in my own community, where I have lived so pleasantly for a half century, and
schools that were instrumental in my own education.
(3) Favorite charities
of family and friends, at their request, often as memorial gifts in honor of
their loved ones.
Like all of us, I get scores of
solicitations by telephone and mail from other worthwhile charities (to say
nothing of those I think are not) but, if they do not fit into one of these
categories, I demur as gracefully as I can.
I apply one additional criterion to differentiate among
charities: given their relative assets, how much difference can I make by the
amount I am able to give? On this
basis, for example, in tier (2) I contribute more to my high school (The Bronx
High School of Science), a struggling public school, than to my university
(MIT), which already has billions in endowment.
I have just reviewed my 2012 giving to see how well I
adhered last year to these new criteria.
I found that I gave the
following percentages:
• 79.8%
to tier (1)
• 12.5%
to tier (2)
• 4.2%
to tier (3)
• 3.5%
to assorted charities that don't fit into any tier, but are legacies
from my previous regime.
Those percentages more or less
reflect the relative importances I had mentally assigned to the
categories. This year, I will
probably rebalance so that the fractions are more like 75%-20%-4%-1%—a little
less giving forward, more giving back, and a further phasing out of
legacies.
I somehow feel better, now that I am being as analytical in
charitable giving as I try to be in handling my investments. I hope my charitable dollars will
thereby have more impact than previously.
WAKE UP!!
You've been dozing in front of your computer screen!