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Donate Unrestricted

paulgraham.com

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Re: Donate Unrestricted

#51

Post by sjg007 »

bradleyjg wrote: post #36
bmmayer1 wrote: post #4

I've done a fair amount of volunteering for nonprofits, one in particular[1], and I will say that nonprofits are full of the most overworked, underpaid, and passionate people you will meet anywhere. They need every penny they can get, and very often people mistake nonprofits spending money on essential activities like marketing or event planning as "overhead", when such expenditures generate multiples of revenue for…

> Wouldn't you rather the $1 you donate generate leverage in new donations? It depends on where the money is coming from. Suppose I donate $100 to a cystic fibrosis charity and using that money they convince 10 people to donate money to their charity instead of the muscular dystrophy foundation. I wouldn’t consider that an effective use of my donation. On the other hand I have no idea how you’d measure that.

It's measured as overhead and/or donation acquisition expenses. It's never 100%. You can assume some percent of that money goes to such expenses vs actual research (which I guess is where you'd want the money to go, or maybe to outreach or supporting individuals with cf).

Re: Donate Unrestricted

#52

Post by latchkey »

This article touches on non-profits, but I feel it comes from a deeper well. We are wired in our culture around how we give donations.

We only give money to people who we think would spend it most wisely. We walk past all the people in San Francisco on the street because we know that if we give them money it will only go to more drug use. We drive past the person on the left turn lane because we don't want to encourage him to be there.

When I spent 2 years traveling by motorbike all over Vietnam, Cambodia and Laos, I saw first hand what donations do from birth... little kids in the middle of nowhere would run up to me and say hey DOLLAR, give me DOLLAR. They were trained for that.

Re: Donate Unrestricted

#53

Post by rossdavidh »

maxerickson wrote: post #11

Build state capacity, pay taxes.

Well I do pay taxes, but your strategy does raise the question of how well the state spends money. There are many people in the world who, for good reasons, neither trust their government to spend the money well, nor feel they have any realistic chance at improving the problems in their government. Government money is often a big target for corruption, and just as malware tends to get written for the software with the biggest market share, corruption tends to accumulate wherever the most money is.

Re: Donate Unrestricted

#54

Post by ma2rten »

freedomben wrote: post #29
ma2rten wrote: post #18

Earlier quoted context omitted.

I wouldn't donate to universities in general. The have growing endowments which they don't spend. It also adds the income inequality in the US, you are essentially donating to the education of rich people. Note that PG talks about non-profits not schools.

I don't disagree with what you've said, but your Note is wrong. PG in the article specifically uses a University donation as an example.

But it says that universities are the exception. It's more of a counterexample.

Re: Donate Unrestricted

#55

Post by jonhohle »

pavlov wrote: post #19
jonhohle wrote: post #12

Earlier quoted context omitted.

At least in AZ, we have several tax credits that allow you to donate to organizations in certain categories. Unfortunately it’s a fixed dollar amount and not a percentage of liability. I agree, it would be nice to control where more tax money was directed.

Elections are how you control where your tax money goes. Micro-earmarks by voters would create enormous imbalances. Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded.

The donations are categorized: organizations the at help the working poor, schools (woefully underfunded in AZ), foster and adoption organizations.

Re: Donate Unrestricted

#56

Post by bradleyjg »

sjg007 wrote: post #51
bradleyjg wrote: post #36

Earlier quoted context omitted.

> Wouldn't you rather the $1 you donate generate leverage in new donations? It depends on where the money is coming from. Suppose I donate $100 to a cystic fibrosis charity and using that money they convince 10 people to donate money to their charity instead of the muscular dystrophy foundation. I wouldn’t consider that an effective use of my donation. On the other hand I have no idea how you’d measure that.

It's measured as overhead and/or donation acquisition expenses. It's never 100%. You can assume some percent of that money goes to such expenses vs actual research (which I guess is where you'd want the money to go, or maybe to outreach or supporting individuals with cf).

That’s not quite what I’m getting at. A marketing dollar that brings in two dollars that would have otherwise been spent on coke is good, a marketing dollar that brings in two dollars that would have otherwise been spent on a different decent charity is not good.

Re: Donate Unrestricted

#57

Post by gist »

> Many donors may simply never have considered the distinction between restricted and unrestricted donations. They may believe that donating money for some specific purpose is just how donation works. And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors.

In other words they smartly are thinking they don't want to kill 'the sale'. When businesses sell products do they typically list all the potential downsides or defects in their product or service when doing so might discourage the purchase?

Maybe as I said in my other comment they realize that less money would come in because they would rain on a parade going on in someone's mind.

Example let's say someone wants for vanity purposes (an entirely valid reason) to have a building named after them. The non profit (could be a school or some research institution) then says to them 'well you know we can do that but why don't we put the money toward this cause instead after all why does it have to be about you and your family name being perpetuated!!!?'.

That's an exaggeration sure (in terms of how the words would go. However principle is that the person donating would then have a negative ie 'the wrong reasons' attached to what they were convincing themselves was a selfless act.

Re: Donate Unrestricted

#58

Post by throwaway5752 »

temp8964 wrote: post #28

The article mentioned the Gates foundation which has terrible records in education initiatives: - The big failure in small schools initiative: https://marginalrevolution.com/marginalrevolution/2010/09/th... - The big failure in teacher evaluation initiative: https://www.businessinsider.com/bill-melinda-gates-foundatio... - The big failure in Common Core initiative: https://www.washingtonpost.com/news/answer-sheet/wp/…

Most startups fail, and we often talk about how that's a good thing. Absent capital constraints, why is that different for charitable initiatives?

Gates is devoting resources towards nuclear (Terrapower) and nuclear has a terrible track record in effeciency (LCOE) and generation as a total percent of fleet capacity. Should he stop trying there? I would argue it isn't. I would argue the same for trying to improve education.

Re: Donate Unrestricted

#59

Post by rossdavidh »

I worked in Accounting (the dept that did it, not the one that taught it) IT at a major public university for several years. Something like half of the software complexity was in keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on. Whether the source was the federal government, the state, corporate donors, or wealthy individuals, they all had strong opinions on what the money could be spent on. It was much easier to get money donated for a new building, than to maintain an old one, so you can have a situation in which new buildings are being built while old ones fall apart.

The most surprising thing to me was how small a percentage of the budget was under the control of the president of the university; it was only a tiny amount. Virtually all of the money was controlled by the source, not by the administration.

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