Disclaimer: I am not a financial advisor. This is not financial advice.

Effective altruists often debate the question of whether to give now or later. One common approach is to give a regular donation each year. This approach makes a lot of sense: here Holden Karnofsky suggests a few reasons why we should give regularly.

But one problem arises with the “give regularly” strategy. If you’re young, and especially if you’re still in school, you probably aren’t earning much money right now, so you can’t donate much. You will earn a lot more money five or ten years from now, which means you’ll also be donating a lot more. If you’re currently a student and you follow the “donate however much I can afford every year” strategy, you end up leaning heavily toward giving more later.

This mirrors the problem described by Ayres and Nalebuff in Lifecycle Investing: if you’re saving for retirement, you end up saving a lot more money later in life. They recommend that most people leverage investments when they’re young and hold more bonds when they’re older in order to spread risk more evenly across their investing lifetimes (or, as they put it, to improve temporal diversification).

We can apply a similar principle to donations. If you don’t earn much now but expect to earn substantially more in the future, you can “leverage” your donations by donating more than you normally would given your income.

It’s not obvious how to do this. There are three basic methods I can see: taking out loans, foregoing savings, and donating trust fund savings. None of these is perfect, but they’re worth considering.

Taking Out Loans

Most lenders won’t give you a loan if you tell them you want to donate the money. What you can do instead is take out a mortgage or student loans and then preferentially donate money rather than paying them off, and focus more on paying them off once you have more money.

This is probably a bad idea in many situations. You can only effectively do this if you’re financially secure enough that you will have no problem paying off your loans in the future. I can imagine that this strategy would work sometimes but I’d be cautious about pursuing it. If we’re talking about leveraging investments, using a mortgage is not a good strategy because interest rates are relatively high. I haven’t seriously investigated this, but I suspect that if it’s a bad idea to take out loans to leverage investments then it’s also a bad idea to use loans to leverage donations.

Forgoing Savings

Perhaps you plan to donate 10% of your income and save 10% every year, and you expect your income to grow rapidly near the beginning of your career. Then the 10% you donate when you’re 23 will probably amount to a lot less money than what you donate when you’re 30.

You can leverage your donations by donating a higher percentage early in your career and a lower percentage when you’re older. Instead of donating 10% and saving 10% every year, you could donate 20% and save 0% when you’re 23, and slowly decrease the percentage you donate so you’re (say) donating 5% and saving 15% by the time you’re 50. That way you still end up with enough money for retirement, but your donations are more balanced across your working life instead of being skewed toward the end.

If you do this, you should still make sure you contribute to an emergency fund before you donate any money. Also consider if you have any large funding needs that will arise before retirement.

A significant downside with this strategy is that it actually works against Ayres and Nalebuff’s idea about leveraging investments. This will cause your investments to weight even more heavily toward your later life than they normally do. This might be a reasonable price to pay for the ability to donate more money early in life, but it’s a difficult question.

Donating Trust Fund Savings

If you have inherited a substantial trust fund or custodial account or have a pot of money from some other source, you can use this money for donations. Suppose you’re lucky enough that your parents gave you $100,000, which you were originally planning on saving for retirement. Perhaps you’re still in school or early in your career and only making $20,000 a year. You can’t donate much money with that income. Instead, you can donate money out of the trust fund. Then later in life once you are making more money, you can donate a little less and put that extra money back into savings. This way you’re essentially borrowing money from your future self.

The biggest problem with this strategy is you have to actually have a lot of money in savings when you’re young, which most people don’t. It’s likely that at least a few people reading this will have access to this option. If you do have a trust fund, you may want to consider using it to leverage your donations. Donating out of a trust fund is probably only wise if you have enough savings for emergencies and you expect you will be able to replenish it later once you have more income. But for some people this might be a good option.

A consideration against this option: if you have savings on hand, you can use that money if you suddenly find yourself in need of cash or if a valuable opportunity arises. You may be able to do more good by using your savings to invest in your personal development and improve your ability to do good in the future. Donating out of your savings means you have less money available for these sorts of expenditures.


I don’t expect that any of these strategies will be worth pursuing for most people. Borrowing money to donate and forgoing savings both have substantial downsides. Donating out of your savings requires that you actually have savings.

I have a decent amount of money in savings which I am using to leverage donations. I plan to donate less in the future and use the extra money to pay back my savings. This might be a viable strategy for people who want to donate a lot, have substantial savings, and expect their income to dramatically increase in the future.

My intention with this post is not to suggest that anyone take any course of action. Instead, I’m proposing a few ways to make your lifetime donations more balanced so would-be donors better understand their options.