A Seven-Part Guide to Clear Thinking about Someone Else’s Charitable Donation

1) Begin by asking yourself whether it would be better for the person to have kept the money/assets. Be explicit about this. Do not engage in motte and bailey-style arguments in which this is implicit but denied.

2) Avoid suggesting alternatives not available to the individual. It may be preferable to have higher taxes and, consequently, fewer private charitable contributions. This argument is important, but orthogonal to any specific charitable contribution. If you believe there is mutual exclusivity between a given charitable contribution and some broader goal, be explicit. If you wish to engage in ideal world theorizing, be explicit.

3) If there are incidental benefits to the person, such as a tax deduction or public relations benefits, ask seriously whether those benefits are really a motivating cause. (For example, you might note that for every dollar you donate to charity, you cannot get more than a dollar in tax deductions, and that the direct cost is much greater than the tax benefit. You might note what substantial wealth could buy in PR if applied directly, rather than donated away.)

4) Ask serious questions about where the money will flow. Charitable Alternative B may be better than Charitable Alternative C, but try to remember Alternative A is keeping the money (see 1 above). If you are advocating for charitable donations, but of a particular kind, be explicit. Do not confuse such arguments with arguments against charitable contributions in toto.

5) Ask serious questions about how the money was made, but try to avoid “fruit of a poisoned tree” arguments. The eradication of polio is not an outcome that is tainted by Microsoft’s breach of EU competition law. If you want to criticize someone for being rich, do so directly rather than by criticizing them for giving away their riches.

6) Do not get hung up on legal structures. LLCs and 501(c)s have distinct costs and benefits, but neither structure completely determines how money will be applied. Nor are such structures immutable. At best, entity types may be tentative clues as to future plans.

7) It is possible to find psychological or philosophical reasons to believe that all altruism is self-interested. If you are a thoroughgoing skeptic of this kind, be explicit and do not selectively apply those arguments.

TL;DR – do not do what this author did.

11 thoughts on “A Seven-Part Guide to Clear Thinking about Someone Else’s Charitable Donation

  1. If I understand that linked article, the author is somehow criticizing Zuckerberg for not immediately creating or donating to a charity– thus saving more on taxes– yet simultaneously criticizing the LLC for hypothetically in the future limiting its taxes, though even if the LLC does so Zuckerberg’s money will have paid more taxes than the author’s preferred proposal of setting up a charity to begin with.

    It’s incoherent.

  2. I was writing a detailed point-by-point response, but decided to ditch it because I think there’s a much simpler way to look at this issue: Over and beyond whatever direct actions Mark Zuckerberg and his wife take in disposing of their assets for the benefit of others, they are signaling to the general public (by publishing an open letter, filming a video, etc.) that they are the sorts of people who want to and are going to help other people. Why are they signaling this? Presumably because beyond whatever private satisfaction they might derive from their acts, they also want the approval of the general public–to put it in Joseph Henrich’s terms, they are seeking prestige (as opposed to dominance).

    Given that it’s the general public that will grant them this prestige (or not, as the case may be), the general public has an interest in evaluating whether Zuckerberg and his wife are sending honest signals vs. dishonest ones. And if we are like other species then it makes sense that the general public would use the handicap principle as a heuristic in making this evaluation.

    I think that’s why people are discussing the arcana of LLCs vis 501(c)(3)s, tax considerations, and so on: To the extent that Zuckerberg and his wife have not truly restricted their freedom of action with respect to their assets, and have not truly disadvantaged themselves relative to their previous state, then their signaling will be perceived as dishonest (per the handicap principle) and they will not be granted the prestige they clearly desire.

    1. This description makes it sound as if conversation and charity were all nothing but a bunch of utilitarian calculations and estimates.

      I think we can straightforwardly say that PR is at least part of why Zuckerberg made this public, in the way he did. But it’s also quite possible he firmly believes in encouraging a certain attitude towards charity and towards the future, and using his influence as someone who has an easy time getting widespread attention to that end is understandable.

      I’m not a fan of the tendency to reduce human relationships to the calculation games. We can grant Zuckerberg the benefit of the doubt, or not, while still focusing primarily on the actual substance of the matter. Rather than reading tea leaves about what he is or isn’t signaling. Doing the latter is simply the end of conversation—it says conversation doesn’t matter, next to unmasking the cynical motives _behind_ the conversation.

      1. But I never wrote that Zuckerberg was acting cynically. I simply think he has motivations beyond his own private satisfaction at doing good for others– otherwise why the open letter, the video, etc? It is natural for people to seek the acclaim of others, so I don’t see seeking prestige as blameworthy. Those who really want to be cynical can look to other possible reasons, for example Zuckerberg wanting to distract attention from allegedly dubious activities of his company.

        I also think that, given plausible theories about how we evolved (not just genetically but culturally), it is natural for people to attempt to look deeper into Zuckerberg’s motivations. Is such suspicion truly justified? That’s another question, and the answer may well be, no, they are not justified in doing so. My point was that people’s querying of Zuckerberg’s motives was not obviously motivated by animus towards him, that there are other plausible reasons. After all, if we uncritically took everything anyone said at face value, we would be at the mercy of every imposter and cheater to come our way.

      2. I don’t think there’s anything to be gained from such psychologizing from a distance. You may not call it cynical, but it still removes agency from things—it boils down to “if Mark Zuckerberg were an evolutionarily directed robot rather than a human being capable of thought and speech, what would this symbolic output imply about his programming?” Rather than addressing the matter more straightforwardly, as one human being discussing another human being.

        This is all very different from saying that we should take him at face value or that he should be immune to criticism or something. I’d just prefer we treat one another like people, rather than robots.

    2. pxdelaney

      I think the upshot of your comment is that you think they have, essentially, lied. Or, perhaps more accurately, that people have an interest in determining whether they have lied. (That you choose to run that through a signalling lens is fine, but probably unnecessary.) I suppose we could append a point number 8, which would be this:

      “If you think that a pledge to give to charity is a lie. Be explicit. Explain why you think that after publicly committing to give to charity, the contributors would not do so.”

      I think inferring from the use of an LLC that the pledge is dishonest is a pretty enormous stretch. It could be true, but I’ll reserve my judgment until the disbursements happen.

      1. “I think the upshot of your comment is that you think they have, essentially, lied.” No, that’s not what I wrote. “Or, perhaps more accurately, that people have an interest in determining whether they have lied.” Yes, although it would be more accurate to say (as I did above) that it is natural for them to do so. “I think inferring from the use of an LLC that the pledge is dishonest is a pretty enormous stretch.” I actually agree with this. I think your point about reserving judgement is correct–which means Zuckerberg will have to wait a bit for the prestige.

        On my using the term “signaling”: I used it because it and the “handicap principle” are terms of art in evolutionary theory, and I think theories of gene-culture co-evolution potentially can explain a lot about how human societies work. As an aside, I think the concept of “signaling” has a unjustified bad rep with some people, including some libertarians (e.g., judging by comments I’ve read at BHL). I think some people use it as a way to dismiss other people’s beliefs (“yes, those liberals say they want to help the poor, but that’s just signaling”), while others see it as “irrational” and/or as a source of economic inefficiency and therefore bad (e.g., the idea of a 4-year college education as “mere signaling”).

  3. On the “robots vs people” question: I don’t think it’s a fatal blow to people’s agency, or “psychologizing from a distance”, to believe that many of the things people are predisposed to do and think are rooted in our natural history as a species and in our genetic makeup as individuals. To the contrary, I think it can help further our understanding of others’ actions, and thus make our conversations with them more productive.

    For example, in the case of the original post I thought the comments about “getting hung up on legal structures” portrayed critics of Zuckerberg and his wife as arguing about trifling issues and nothing more, when I think there are non-trivial reasons (as I outlined) for why people might be concerned about how much freedom of action Zuckerberg and his wife were giving themselves, and what that might imply about their commitment behind their public statements. (And if Zuckerberg and his wife had understood that then they might have been able to better address such concerns up front.)

  4. pxdelaney

    Hecker – Appreciate the response above. I should caution that I’m only really familiar with the use of “signaling” by economists. (I should doubly caution that I am pretty skeptical about the way I’ve seen it used, which is–at least sometimes–as a rationale for believing that people are self-interested actors notwithstanding prima facie evidence otherwise.) To the extent I mischaracterized your response as a result, my apologies.

    Only one other thing – wouldn’t you expect to get some prestige just from the promise to give, assuming it were credible?

    1. Re signaling and economists: I don’t hold with the “rational calculator” model of human nature. From my point of view these sorts of things would show up as predispositions of which people themselves would likely be mostly unaware. For example, I’m prepared to believe that Mark Zuckerberg and Priscilla Chan weren’t acting cynically at all, but instead genuinely believed they were doing the right things for the right reasons, down to their choice of legal mechanisms. I mean, if they were really that cynical and calculating, they would have put more effort upfront into justifying why they were doing things the way they did, and perhaps restructuring things to be less problematic in terms of provoking knee-jerk reactions. Instead they’re now stuck playing defense.
      (Which is a shame actually, because I think there is an interesting conversation to be had about how these types of large-scale philanthropic efforts should best be done.)

      Anyway, that’s all I have to say on this subject. Thanks for providing the opportunity to comment on these and other posts!

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