Charity money down the drain

Money that are given to a charity go to cover two kinds of costs:

1. The cost of raising the money
   
2. Doing whatever the charity is trying to achieve

The way you give to charity has a big impact on how much is lost in the first category. Responding to a direct mail? You pay not only for the one you got, but for your share of those sent to people who didn't respond. Paying by credit card? VISA just took 3,65% of your gift. Signing up with a representative from the charity stopping you on the street? An hour of his or her salary and/or commission was just deducted from your gift.

Beggars

I hope I am not alone in this: I feel really bad when I pass beggars on the street, and I don't really know what to do. There are a number of different strategies - the Distant Stare, the Friendly Nod and the Lost-In-Though Expression. No matter what I do, I feel like a jerk anyway.

Of course, this means they are good at their job.

Nevertheless, I do think that many if not most of them could use some help. They are people whose aspirations for happiness most likely do not include humiliating themselves on the street.

I believe just tossing them some coins is not really help, and besides the gift would always be better given to Medecins Sans Frontiers in my point of view. The beggars are stuck in their situation, and need to get out of it (if they are willing to, that is). I also assume that for many, some basic human love and affection is in short supply.

Stopping and taking a real interest when time permits might be the Right Thing. I do not know of anyone who has done this, though (except the Salvation Army, and this is kind of their job). Am I a victim of the Mother Theresa bug when I keep pondering this?

A hero

In 2006, Warren Buffet over $30 billion to charity.

In fact, it is not the figure that impresses me the most (even though it is bigger than the GDP of most countries). What I like the most about what Buffet has done is the selflessness of how he did it, and the thought he put into it.

There is a "Buffet Foundation" (which inherited most of his billionaire wife's fortune), but Buffet decided that the Bill & Melinda Gates Foundation would do a better job. Most people would put the money into something bearing their own name.

The gift consists of 10 million shares in Buffet's company, Berkshire Hathaway. Each year, the Bill & Melinda Gates Foundation gets 5% of the shares from the gift (500,000 the first year, 475,000 the next, etc). This is a very well thought out design. It must give many Berkshire Hathaway employees a fantastic sense of purpose in their work. As long as they manage to grow the company at 5%, the size of the annual donation will never fall. The foundation gets a fairly steady stream of income in the form of these shares every year, and can gradually build up its own investment and fund management capabilities to handle this kind of fortune.

Warren Buffet still lives in the house he bought in 1958, which is thought to be worth about $700,000 (less than the one I live in). He says: "There's nothing material I want very much", and receives only a $100,000 salary from Berkshire Hathaway.

He is one of my heroes.

First post - what and why

If you read this, you are among the 1 billion people who live in affluence on this planet. Most of us are at the risk of living our lives to the end without doing enough of the stuff that matters - I know I do. This blog is about things that matter, and about attempts at finding a way to live a good life (without dedicating it to becoming something like Mother Theresa, Paris Hilton or whatever other extreme role models are out there).

The world is really messed up in many ways and places, and in entire countries there are only a handful of people who have the resources and advantages that are available to me (and probably you). This makes me feel that my contribution to the well-being of those people needs to be very substantial. Simply because we are relatively few people with the resources to do anything about the messed-upness all around, and because even if I spend - say - 10% of my time and resources on this, I will still be enormously better off than if I were born in - say - Somalia or Bolivia.

I plan to blog about quite specific thing rather than lofty principles, but here are the simple ideas that will underly the posts:

1. Do no harm. Quite simply: I want to abolish any negative impact I have on other people and on the world I live in. I want to clean up my own mess, I want to be truthful, I want to be always respectful, and so on. Since I am not the Dalai Lama, I will never even get close. But it will be OK as long as I really tried.
2. Do some good: I have to find some contribution I can make that fits where I am in life. Right now, I have so little time that it is easier for me to contribute money than anything else. Other people have more time (which may sometimes be more rewarding to give, too).
   
3. Look for happiness: Few teams are stronger that the groups of four US Navy Seals who are world class professionals who trust each other with their lives on a routine basis. A very important basis of their team work is, however, each team member's responsibility for looking after themselves. If you don't, then you burden the team. This is a good rationale for looking out for your own happiness: Even if being a good human being means caring for the sum of the happiness of all humanity, then each of us still needs to take responsibility for our own happiness. I like to hold on to this thought when I drink beer and play poker with friends.

Finally, I think it is really hard to write anything on these subjects without coming across as pompous and pontificating. So I probably will at times. Feel free to let me know.