I am Pledging 5% of my salary to charities for the rest of my life

June 29, 2018

Tags: Giving 


The longer version

If you are still reading, then you are interested in knowing the whole story, and I am glad you are :)

Last month, Matthew Green (I do not know the guy by the way) tweeted something about how Jeff Bezos of Amazon was too rich that he cannot even find ways to finish or spend his wealth. Lots of people were replying by asking why does not he donate some of it to charities. Then Jacob Gill (I do not know him either :) ) replied back by asking everybody how much they are donating from their salaries. The reality is most people would answer that with 0% as a regular donation. Please do not feel bad, this is not my purpose and I am certainly like you when I read Jacob’s tweet. I read that tweet and started thinking about how much contribution I am making? and how much I am capable of? I have been donating $20, $50, and sometimes even bigger amounts like $250. but these are very small, rare and only occasional, they would not make that huge impact.

I'd be curious how much % income everyone replying to this thread spends each year on anything other than their own self-interest. My guess... not a whole lot. Net worth aside, most of us just aren't that willing to give up what we've worked to earn...

— Jacob Gill (高健) (@criticalowl) May 2, 2018

The initital Tweet by Matthew Green and the Reply by Jacob Gill

Interestingly, most people, myself included, think that well it’s the wealthy people who should be donating and it’s true. What we do not realise that most-likely, if you are reading this post, you live in a one of the OECD countries, then chances are you are in the top 2-5% wealthiest people on earth. I can see your jaw just dropped :) before saying anything, bear with me.

Wealth Distribution
Figure 1: Wealth Distribution (Source: The source of the data is from World Bank, and this post explains the details.

This post which was written by analysts from Oxford looked at the distribution of wealth around the world. I have borrowed their diagram here (See figure 1 above). You can see that most people are earning very little, in fact the majority earns well below the US$2000 per year. In my social circle, where I live, most people on average earn $80,000 or more. This makes us the wealthiest in the world.

Moreover, this calculator which was done by the nice people at GivingWhatWeCan.org, shows you how rich you are compared to the rest of the world. I have put snippet of the tool outcome for an AU$80000 annual income. As you can see below, a person with such income living in Australia would be in the top 1.3% richest people.

How Rich Am I
A screenshot from the calculator at GivingWhatWeCan.org

Now someone might argue that yes I earn that much but I have credit card debt to pay off, I have bills to pay, and I have mortgage and so on, and it’s all true. However, slashing a small portion of my salary could literally save or change somebody’s life on the other side of the world.

Think of this for a second. If somebody told you that you have a choice between a) Spending $2000 on gadgets per year or b) Giving sight (or education) to somebody in Africa. Which one would you choose? We do not normally make these choices because these people that are the poorest are far away from the communities where we live. That’s why causes like cancer research always get better donations, because we can see the impacted people closer to home so our choices are influenced.

Furthermore, there is enough research that suggests getting paid more does not make us happier. This post talks in more details about this topic. Interestingly, some of this research was done in multiple countries and still produced the same results that getting paid more does not have correlation with our own levels of happiness or satisfaction.

Once I made the decision to donate, the next hard bit was how do I make sure that I find charities that are doing effective work. After doing lots of research I found 3 organisations that stood out:

I then decided to make the donations to Effective Altruism Australia and made a portion of it go to GiveDirectly. The donations go through the Effective Altruism Australia website, which is a registered charity in Australia, then I could direct the donations to these charities that are recommended by GiveWell.org.

How much are we contributing to help the poorest? and how much are we capable of?

Lastly, I fully respect everybody’s choice of how they want to live and how they spend their money. What I am hoping in sharing this is to get you to think about what are we contributing? and how much are we capable of?. You do not have to go as far as 5%, you could do 1% and I can guarantee you that it would not have an impact on your life-style but it could totally change somebody’s life.

If you have a comment, feedback or a question, I would love to hear from you