Episode Details

Linkpost for my Substack piece, lightly adapted.

Donors are holding AI wealth at enormous risk. Their giving is often extremely risk-averse.

“What is the most common mistake donors make?”

This is one of the questions I get asked most as a donation adviser. Often, I say that it's risk tolerance.

Many donors have risk backwards. They hold the money they plan to give at close to maximum risk, often in a single company's stock, then give it away at close to minimum risk, backing only the most heavily evidenced organisations.

Getting it the right way round means working at three levels: de-risk the wealth that funds your giving, diversify your grant portfolio, and take more risk inside it.

What do most donors get wrong about risk?

Candidly - almost everything. The majority of individual donors are distributing risk carelessly across multiple axes.

Take the distribution of risk between wealth and grantmaking, for example. Many donors are taking extremely large risks with their capital, whilst only giving to massive organisations backed by 24 randomised controlled trials (RCTs).

That's two risk decisions taken with the same money, sometimes without noticing either.

AI equity holders are a clear case. Many [...]

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Outline:

(01:04) What do most donors get wrong about risk?

(02:10) How much risk should I take with my charitable giving?

(05:25) How should I spread risk across my giving?

(08:53) How should I balance evidence and risk in my donations?

(11:16) Do charities need RCTs before I fund them?

(13:11) I'm expecting an AI windfall. What should I do?

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First published:
August 4th, 2026

Source:
https://forum.effectivealtruism.org/posts/acRFgvqQPCSHFeLE5/most-donors-get-risk-wrong

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Narrated by TYPE III AUDIO.

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