r/wallstreetbets is a hostile place for the outsider. Tasteless memes, incomprehensible acronyms and full-on shouting from all directions – it’s hard to follow what’s going on, let alone act on it and try to make a profit. Comments on the most popular threads zoom at a rate of several dozen per second.
One of Reddit’s biggest and fastest growing subreddits, the forum has become (in)famous over the past few weeks as retail investors who follow it drew up the price of GameStop (among other stocks and commodities) by nearly 3,000 percent in a few days. In doing so, they compromised the positions of some institutional investors, including hedge funds who had been shorting the stock. Melvin Capital lost half of its value.
If individual investors are growing in power in the financial markets, for better or for worse, then what of philanthropy? Can we imagine a world where individuals will be able to improve the world at scale, unobstructed by “professional” institutions?
This “silent majority” of charitable investors is not a cohesive group, and includes both elderly people donating to the local church and young, progressive believers in EA.
For this group to achieve the kind of scale and power enjoyed by the retail investor crowd, it would need two components. One is technology. The other is a functioning community. Let’s discuss those in turn.
The bad news is that there’s nothing to galvanize a community like the quest for profit, a clear metric of success. In philanthropy, that’s not an option. Another piece of bad news is that platforms that aim at centralizing and organizing individual giving appear and die with amazing regularity.
But there is good news too. The technology is coming. The Altruist League’s platform, which allows direct investment into thousands of grassroots movements and similar organizations around the world, could in theory be a solid base to build on.
But even our platform, one of the most sophisticated of its kind globally, is far from ready for the different use cases and the sheer volume of use by individual investors. We would need to worry about advanced privacy issues, build a sophisticated user interface, introduce a costly client support mechanism, etc.
The payment system which we have in place overcomes many obstacles to international transfer and money allocation into 90+ countries. Scaling this further to allow for real-time investment in a B2C model would increase the complexity by a factor of ten.
This is not to say that we won’t be able to move in this direction in the future, or that someone else won’t. I believe that a one-stop shop for global systemic philanthropy for individuals will exist within 3-5 years, given the right market conditions. It will have to consider its structure carefully to do so. Once it appears and proves successful, it will have the political clout of a big tech company.
Let’s say that the technology is in place. The second step is the building of a community. You need to know where and how to invest, to educate yourself on who’s producing systemic change out there, and how.
If you look at the philanthropy subreddit on Reddit, you’ll notice that it has new posts about once a week. Few people are interested in that discussion. The stagnant field of mainstream philanthropy seems the polar opposite of the roller coaster excitement of for-profit investing. And yet it is exactly a community that we would need, one with enough critical mass to do the following credibly:
1. Help analyze and rank investments. The Altruist League does this as part of its business model. Other organizations do so too, but there is no substitute for a large-scale, crowd-driven discussion on the topic, infused with latest theory of change and information from the ground.
2. Prioritize and focus. Dictating global humanitarian priorities is for the moment done by a handful of successful NGOs, movements and international organizations, as well as celebrities, ad hoc and through emotional appeals.
We can do much better. Let’s say we wanted to influence the global climate change debate. We could facilitate coordination between social movements, legislators and other groups, and then target the COP 26 discussions with clear policy asks. We could have sub-communities coordinating actors in the space of women’s rights improvement in Eastern Europe, or the eradication of homelessness in California. Influence thus amassed would trump that of any individual organization, including the United Nations.
3. Disrupt emergency response. When the 2010 Haiti earthquake hit, dozens of organizations were on the ground within a few days. The campaign was heavily criticised for disorganization and other more serious problems, and for many organizations (say, the American Red Cross) it was a watershed moment in how they did their operations.
Still, ten years later, the colonial model of global emergency response is fine and well. International organizations have multiplied, and their missions swelled; the overlaps are enormous, and they all fight for more or less the same institutional donors.
Because of this, iNGOs tend to rush into any new emergency head-first so as to justify their raison d’être. This sidelines the local organizations, creates confusion and disorganization, and leads to long-term dependency issues.
We would benefit from having a community of citizens at least discussing if not coordinating these relief efforts, focusing on promoting and helping local organizations on the ground, rather than the neocolonial ones.
Of course, there are some aspects of the chaos of retail investing that we don’t want to see in community-driven philanthropy. One is the irrationality of it all. Some causes and movements can be singled out for support overnight, receive hundreds of times more funding than they can absorb, and then be abandoned as the “hive mind” moves on. There is little inherent strategy in this kind of groupthink.
The second danger is that of abusing the system. Investing in nonprofits on the ground is risky and difficult as it is. They appear and disappear quickly, and you might invest in a hundred of them to have only a few truly succeed and grow in scale. There is ample space here for misreporting, hype-building and blatant embezzlement. This becomes even more serious when people’s lives are at stake, and not some half-imaginary graphs going up or down.
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