The newly minted richest person in the world is asking for guidance on how to give away his money. Here’s some friendly advice.
Soon after news broke that Elon Musk surpassed Jeff Bezos to become the world’s richest person, the Tesla and SpaceX CEO asked for guidance on “ways to donate money that really make a difference,” noting on Twitter that it’s “way harder than it seems.”
With his request for advice, Musk instantly became one of the most interesting philanthropists in the world. In 2012, he signed the Giving Pledge, promising to give away at least half his fortune during his lifetime. His for-profit endeavors, which include electric cars and private spaceflight, have won a following among consumers who have hailed their purported social and environmental impact as much as their private benefits. But on the whole, during Musk’s meteoric climb to become the richest man alive, his giving has been sporadic, scattershot, and somewhat unstrategic.
On some level, that’s understandable. He’s right that it can be genuinely hard to figure out how to direct your money wisely to solve the world’s biggest problems. Some organizations do a lot more good than others. And if you’re going to donate huge amounts — and Musk, with an estimated net worth of about $188.5 billion, really should — you’ll want to get the most bang for your buck. But how do you know where your money will have the greatest impact?
This is a big question that many philanthropists are intent on answering — and could be deeply consequential for the future of the planet. One framework that’s gained traction comes via the effective altruism movement (which has informed some of our work here at Future Perfect). Whereas traditionally donors have given to whatever charity speaks to their heart, one of the core premises of this movement is that step one for any donor should be identifying a promising problem to solve, and that the most promising problems generally share a few features: they’re important (affecting lots of lives), they’re tractable (there are ways to make progress), and they’re neglected (more resources would go a long way).
But Musk can also draw inspiration from another, more familiar source: his private-sector work. Musk has made a career of placing big bets on new approaches to longstanding problems. It’s an approach that sees most bets not pan out — but a few can and have. Tesla’s Autopilot was a bet that the key to perfecting self-driving cars was through incremental software updates (disclosure: Kelsey’s fiancee owns a Tesla); SpaceX made a bet that parts of rockets can land and be recovered and reused; Musk’s Boring Company is making a bet that we can make building tunnels cheaper.
That big-bet, moonshot approach could pay dividends in a philanthropic context. Think of some specific, perhaps unlikely ideas that could go a long way toward alleviating suffering: What if we eradicated malaria by eradicating the specific kinds of mosquitos that carry it? What if we upended scientific grant funding by launching research grants with turnaround inside a week? What if we prevented the next pandemic by improving disease surveillance and preparedness strategies?
Btw, critical feedback is always super appreciated, as well as ways to donate money that really make a difference (way harder than it seems)
— Elon Musk (@elonmusk) January 8, 2021
The thing about big bets is that they don’t all pay out — but they don’t all need to. As Musk surely knows, the success of even one big bet means a good return on investment overall.
Most people can’t afford to throw millions of dollars at moonshot projects aimed at solving these huge problems. But Musk can. He has said that he hesitates to donate the bulk of his wealth while it’s still largely in the form of his ownership of Tesla. But even the $100 million he has committed to donating periodically every few years is enough to make a significant difference.
How to donate money in a way that really makes a difference
There are a lot of charities, and figuring out which ones are doing the most impactful work is incredibly challenging; identifying ways to work on problems that few charities address today is even more challenging. But there are some principles that make it easier to give away money effectively.
A donor can make their money go a lot further by identifying from the get-go cause areas where money is needed and where it can be directed productively.
Neglectedness is one part of that picture: Are other funders working on this priority? Think of it this way: If you have $100 million to give, but you donate it to an area that’s already really well-funded (like education), your dollar simply won’t go as far. But if you donate it to a cause that’s relatively neglected (say, AI safety), then you get more bang for your buck. In some cases (like climate change), a cause may be benefiting from significant funding, but specific approaches and lines of research are underfunded, making them promising targets for donation.
Tractability is another consideration. A lot of charitable interventions just don’t work. In the past, we’ve particularly highlighted education policy as an area where billionaires have struggled to get results from their interventions. Here, the evaluation should really be much the same as it presumably is for Musk when he founds a company: Is there a path to success here? Will it be obvious when a program is successful, so that we can build on successful programs and discard failed ones? Have other attempts in this area failed, and what failed for them?
Finally, good giving areas are typically ones addressing problems that affect millions or billions of lives, if not everyone on the planet. Eradicating diseases, changing the course of future technology, or preventing Covid-19-type catastrophes have a big potential effect.
One principle that’s deeply embedded in California tech culture is that it’s okay that most startups fail — the successes more than make up for the failures. If you fund a hundred startups and only three of them are successful, that’s well worth it — you’ll make much more money from those three than you spent on the other 97.
There’s a similar principle at play in giving. The most effective philanthropic intervention in history might be the eradication of smallpox, the horrifying disease that killed hundreds of millions of people — 30 percent of those infected — until vaccination wiped it out. The US “saves the total of all its contributions every 26 days because it does not have to vaccinate or treat the disease,” the Center for Global Development estimates. It would be worth a hundred failed vaccination campaigns to do something as impactful as eradicating smallpox.
That’s why many donors focus on “hits-based giving,” an approach that seems particularly suited to Musk. The idea is to donate money to a lot of projects that have a plausible route to impact, knowing many of them won’t work out but the successes will make it all worth it. Hits-based giving doesn’t mean choosing donations randomly or without thought. It’s important to think about what projects have the potential to be hugely impactful, and to do things that aren’t already getting done. But they mean accepting that many donations might not see the desired result — and that doesn’t mean it was a mistake to donate.
In general, it is wiser to donate now, not wait decades. Lots of key global challenges from climate change to pandemics will be cheaper to solve now than two decades from now. That said, most of Musk’s wealth is in Tesla, a still-fragile company; he’s said he wants to save the bulk of his donations for in a few decades once Tesla is on more solid ground. That’s understandable, though he should keep in mind that Tesla can only thrive in a world that is adequately equipped to address its biggest global challenges: precisely what donations can help do.
The moonshot projects Musk should fund
The website of Musk’s personal charity, the Musk Foundation, contains some 30 or so words.
Grants are made in support of:
– Renewable energy research and advocacy
– Human space exploration and advocacy
– Pediatric research
– Space and engineering education
– Development of safe artificial intelligence to benefit humanity
It offers some clues as to his favorite causes, many of which meet the effective altruism criteria of importance, tractability, and neglectedness.
One of the causes is safe artificial intelligence. Because developing steadily more powerful and general AI systems could eventually pose a serious threat to humanity (Musk has said we are “summoning the demon”), figuring out how to build AI that will benefit us rather than harm us is a worthwhile cause to invest in. What’s more, AI safety is a neglected problem, so it’s a promising one to invest more resources in tackling.
In 2015, Musk founded the lab OpenAI to research precisely this problem. (He stepped down from the board in 2018 as Tesla’s increased focus on AI produced a potential conflict of interest.) He’s also made some donations in the AI safety space, like a $10 million gift to the Future of Life Institute, which researches how to keep AI beneficial to humanity, among other things.
But the future of AI development is very uncertain, so it makes sense to fund different organizations with different approaches to investigating the question, “How can we keep AI safe?” There are lots of them, all pursuing different approaches: Musk could check out groups like the Machine Intelligence Research Institute in Berkeley, the Future of Humanity Institute at Oxford, and the Leverhulme Centre for the Future of Intelligence at Cambridge.
Pandemic prevention is another area where money can go strikingly far. The case that it can do a lot of good is very clear-cut, of course. The devastation of this year’s pandemic could have been prevented with better disease surveillance and response, or much mitigated with a faster vaccine rollout. And pandemics can get much worse than this one.
But until this year, these anti-pandemic measures have been in many cases underfunded — and private philanthropists can play an important role either in partnering with governments or in providing funding when government attention and funding wanes.
To be sure, Musk has not been enthusiastic about government efforts to combat Covid-19. He’s been frustrated with the public health approach, especially when it shut down his factory, and he’s consistently underestimated how bad the virus will be. All the same, there’s an opportunity here for Musk to devote resources toward preventing the next pandemic. The Open Philanthropy Project, whose approach to hits-based giving is a good match for Musk’s, has been working on pandemic prep for years, funding faster vaccine development and pandemic preparedness.
The Open Philanthropy Project is also worth looking at — as a potential model and as a potential partner for Musk — for their grants for fundamental scientific research. Basic science can be hard to secure conventional grants for, even if it has the potential to revolutionize the world. Making it easier for such research to get funded would be a great investment in the next generation of inventions and discoveries that can change our world.
Musk could also potentially make a difference on fighting climate change. His foundation’s website lists “renewable energy research and advocacy” as among the causes it supports, though it’s unclear which specific organizations get funded. The climate crisis is undeniably important, and though it may not seem like a neglected area, most donors don’t have the money to take a moonshot approach to it. Billionaires do, and climate experts have specific ideas about where they should invest, ranging from nuclear power to carbon dioxide removal to solar geoengineering (a controversial idea that involves injecting aerosols into the high atmosphere to reflect sunlight back into space and make for a cooler planet).
Giving can only get things done when it’s accompanied by a deep understanding of the problem and how to make progress on it. That’s why Musk now needs two things: a plan, and public accountability. Right now, at the beginning of the year and the beginning of his tenure as the richest person on the planet, Musk should set out some specific giving commitments — and invite us all to make sure he sticks to them. Accountability helps us all achieve our goals, and a billionaire’s giving goals are no exception.
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Author: Kelsey Piper