Leverage

Updated: Aug 1

Summary


Leverage is the influence you have over how resources like time, money, and labor (particularly of others) are spent. The more of these resources you’re able to influence, the larger your leverage. Increasing your leverage in a promising cause area can be a great way to increase your impact. In fact, high leverage is often what separates the most impactful careers from less impactful ones.


Overview


Let’s say you’ve been lucky enough to receive two job offers from a great charity which distributes antibiotic tablets to help fight trachoma, a potentially blinding eye infection. The first job involves distributing these tablets directly to the people who need them. The second job is a fundraising role. If you meet your fundraising targets, you’ll be able to fund ten additional tablet distributors. Which job should you accept?


Putting various complications aside, it’s clear the second role has potential for much more impact than the first. The main reason why is that it grants more leverage. In the fundraising role, you’re able to do ten times more good by influencing the resources of others: first, by persuading people to donate, and then by using this money to pay for the labor of additional antibiotic distributors.


This is just one example of how leverage allows you to put more resources towards solving pressing issues than the resources you can give yourself. There are loads of other kinds of roles that could allow you to influence resources beyond your own. Such roles might allow you to, for example, influence how budgets are spent, change the causes people work on, amplify important ideas, or enable others’ work.


Here are a few more examples to understand how different careers can give you leverage:


  • Roles with influence over large sums of money. For example, working as a grantmaker can allow you to direct sizeable amounts of money at your discretion. Similarly, some governmental roles can let you influence where huge governmental budgets are spent.

  • Managerial roles. If you’re a great manager, you can increase the productivity of those working for you. A talented research manager will often have more impact than a talented researcher, because they can multiply the impact of many talented researchers.

  • Positions that allow you to reach a large audience. If you’re a good communicator, you can use your skills to persuade people to pursue impact. For example, a popular podcast could convince hundreds of people to pledge some of their income to effective causes— generating millions of dollars for charity.


These are just a few examples of how to increase your career’s leverage. There are many more examples, though— some of which carry massive amounts of impact, like if you’re able to persuade a government or large organization to spend even a tiny fraction of its budget or efforts on a pressing issue. One great example of this is the Lead Exposure Elimination Project, a small organization which managed to convince the Malawian government to regulate lead paint, saving an estimated $180 million of future earnings that would have been lost due to the cognitive effects of lead poisoning. This is many times more than most of us will be able to earn in a lifetime, and far more impact than anyone could achieve without leveraging the resources of others. These sorts of high-leverage opportunities can therefore play significantly into our career decisions if we’re seeking maximum impact.


While leverage is pretty important (as we’ve pointed out thus far), it still needs to be considered alongside other factors when planning for a career with high counterfactual impact.


For one, it’s vital to work in a cause area with important, solvable problems. If I could convince the US government to dig the world’s largest hole, for example, I would have enormous leverage. However, I would have zero positive impact.



A testament to my impressive leverage - but it’s helping no one



Of course, ensuring you’re using your leverage for good isn’t always as simple as avoiding digging useless holes. For example, you might be able to convince someone to make a significant investment in medicine to combat a neglected tropical disease, which is an important problem to solve. But if the medicine doesn’t work, it won’t do any good. So, leverage in a promising cause area isn’t enough to make a positive impact; it also matters how effective the specific solution is that you’re using your leverage to deploy.


You’ll also want to bear in mind that high-leverage roles often carry the highest risk for large direct harm. Sometimes, this is obvious, like high-leverage jobs in organizations which clearly do harm (e.g. marketing for a tobacco company). But there’s also a risk in taking roles where the interventions you’ll implement do surprising (and unintentional) damage, like replacing water pumps in remote villages with less effective alternatives. When combined with high amounts of leverage, such harm will be unfortunately amplified.


High leverage roles also carry increased potential for high counterfactual harm– that is, making the world worse than if you hadn’t taken the role. For example, if I had done a particularly good job at raising money for the trachoma prevention charity, I might have inadvertently persuaded people away from donating to an even more effective charity. Or by getting the US government to dig an enormous hole, I’d probably be taking away money from more important areas, like foreign aid or social security.


A further example of counterfactual harm is doing a worse job than your replacement. If you take a role with high direct impact, but end up being worse than whoever else would have taken your job instead, then you’ll be reducing the amount of positive impact on the world. An implication of this is that the risk of counterfactual harm is higher if the role attracts lots of talented, impact-driven people, as it becomes less likely that each individual will be the best one for the job. So, for particularly high-leverage roles, it’s particularly important you’re a good fit.


On the other hand, there are also high-leverage positions in which you can be fairly sure you’re having large counterfactual impact, even if you’re not too sure about personal fit. As an example, if you take a high-paying job to donate more to effective causes, you gain leverage by influencing the money spent on particular problems. And even if you pick charities to donate to which aren’t the most effective ones available, you’ll still likely be doing far more good than someone who took the job without an intention to donate. In other words, when there’s less competition from other impact-driven individuals, leverage is more unambiguously good. .


All in all, we think it’s important to take leverage seriously when making career decisions. This might not mean pursuing a high-leverage role immediately, but it could mean getting yourself in a good position to build up to an influential position in the future.


Additional Resources