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Donate Unrestricted

paulgraham.com

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Re: Donate Unrestricted

#211

Post by quercusa »

autarch wrote: post #48

Having spent many years volunteering for various nonprofit, and having been deeply involved in fundraising and budgeting, I cannot upvote this enough! Restricted donations add overhead while making it harder to fund important things like bookkeeping, rent for an office, and staff salaries. If you believe in the nonprofit's mission, just let them figure out what to do with the money!

On the same note, you are better off making a few large donations instead of spreading a bunch of small ones around that get eaten up by overhead.

Re: Donate Unrestricted

#212

Post by matheusmoreira »

samspenc wrote: post #198
matheusmoreira wrote: post #189

Earlier quoted context omitted.

Zero-interest deferrable loans are an amazing idea. I suppose you'd have to be a substantial investor in order to get the non-profit to accept such a deal.

Not so sure since as others have pointed out, the non-profit would have to repay the loan. Plus a lot of non-profits' "business models" aren't tailored around repaying donations. Think of some of the performing arts, dance and music programs in some of the largest cities that are structured as non-profits and charge $20 in ticket fees. If they lost their donors, they would have to charge $100 to $200 in ticket fees j…

> the non-profit would have to repay the loan

Only if they ever strayed from their mission. That ought to put a limit to how much corruption they think they can get away with.

Re: Donate Unrestricted

#213

Post by xirbeosbwo1234 »

MauranKilom wrote: post #98
xirbeosbwo1234 wrote: post #82

Earlier quoted context omitted.

Well, Gates is a bad guy. He was a robber baron who decided that stealing a whole lot of money makes him the world's leading expert on everything. He has no training in pedagogy, epidemiology, sanitation, or really anything else relevant to the missions of his organization, yet he seems to actually believe he's a Great Scientist Using Evidence-Based Approaches to Save the World. He lives in a $200 million house yet h…

> He has no training in pedagogy, epidemiology, sanitation, or really anything else relevant to the missions of his organization I'm confused by this statement. It only counts as training if you did it around age 20? Or what makes you think that someone who is spending this much time, effort and money on a given topic would not arrange for appropriate (or rather, excellent) training on it? Or is this something you co…

If you were to choose someone to lead one of the world's largest charities, would you choose to hire some random guy and train him from scratch or would you choose an expert in public health?

If you were to take some random bozo off the street and put them in charge of the Bill and Melinda Gates Foundation, they would learn a lot about medicine and sanitation and education and so forth. It would also be obviously stupid. Yet that's pretty much the way the current system. Our society hands control over massive amounts of resources to rich people because they made money doing entirely unrelated things.

It's even worse here. William Henry Gates III is rich because of his malicious and illegal actions as the head of Microsoft. He is worse than a random bozo; he's been selected to be powerful because of his bad behavior.

Maybe you think Gates's tenure at Microsoft wasn't completely destructive. I disagree, but whatever. Substitute in your favorite brain-dead celebrity or "job creator". The problem is the same: we hand over control of our institutions to morons because they have money.

Re: Donate Unrestricted

#214

Post by texasbigdata »

JMTQp8lwXL wrote: post #205
ralmidani wrote: post #94

Over the years my opinion of non-profits has become less, shall we say, “charitable”; society has a tendency to glorify non-profits because they “don’t have shareholders” but, in reality, a lot of non-profits give peanuts to those at the bottom (with some even working for free) while executives get far more than a living salary. And whether you’re an educational institution, an insurance provider, or an NGO, being an…

Giving an interest-free loan would not come with the tax benefits of a donation to a 501(c)(3). Often times, gifts are made with appreciated shares to reduce the giver's tax liability. I agree with the problem you point out, but I'm unsure of the practicality of the solution for high net worth individuals.

Perhaps donating 1.4x not tax free but structured in a way that meets the donors other goals offsets the net cash differential from the tax shield in their “evaluation function”.

Re: Donate Unrestricted

#215

Post by zachlatta »

rsj_hn wrote: post #209
furyofantares wrote: post #136

Earlier quoted context omitted.

> If I wanted to donate a large amount of money to a non-profit, I would structure it as a zero-interest loan, and would just keep deferring the repayment of the loan as long as the org stays true to its mission, compensates executives in reasonable proportion to regular employees, etc. Not sure if I'm missing something, but this sounds totally ridiculous to me. You give 1M to someone you think is going to spend it w…

The problem is you have a huge principle-agent problem with these non-profits. In a standard corporate structure, shareholders elect members of the board who can replace the management. But who elects the board of a non-profit? Why not those who donate to them? There has to be some reliable mechanism to impose accountability by those who give funds. Now lacking a mechanism for accountability, people give funds with a…

It’s very common for the board members of a nonprofit to be its largest donors.

Re: Donate Unrestricted

#216

Post by 1shooner »

ralmidani wrote: post #94

Over the years my opinion of non-profits has become less, shall we say, “charitable”; society has a tendency to glorify non-profits because they “don’t have shareholders” but, in reality, a lot of non-profits give peanuts to those at the bottom (with some even working for free) while executives get far more than a living salary. And whether you’re an educational institution, an insurance provider, or an NGO, being an…

>while executives get far more than a living salary.

This is the trope that non-profits should essentially be run by volunteers. Which is fine to a degree, but does not scale well (that I've seen, anyway).

Re: Donate Unrestricted

#217

Post by saurik »

jasode wrote: post #78
rossdavidh wrote: post #59

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 str…

>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. [...] they all had strong opinions on what the money could be spent on. Understand your frustration but the public was outraged when $1 million of a librarian's donation was used for a football scoreboard.[1] Yes, the university did comply to the exact letter of his will (onl…

I mean, when funds are unrestricted, they "should" become fungible; so, when I give unrestricted donations I also make it clear that I don't want them to try to tell me "we used your money to do X"... that way, I can look at anything I want on campus that was improved and think "I did that :)". If the university is spending money on bullshit, then probably they just don't deserve donations at all :/.

Re: Donate Unrestricted

#219

Post by samvher »

notsureaboutpg wrote: post #118
ralmidani wrote: post #94

Over the years my opinion of non-profits has become less, shall we say, “charitable”; society has a tendency to glorify non-profits because they “don’t have shareholders” but, in reality, a lot of non-profits give peanuts to those at the bottom (with some even working for free) while executives get far more than a living salary. And whether you’re an educational institution, an insurance provider, or an NGO, being an…

There's a huge fallacy where people believe that non-profits are supposed to be inherently more equitable and nicer than for-profit companies. And people who believe this fallacy get upset by executive pay at non-profits and turn to sites like Charity Navigator to find charities where 99 cents of their dollar goes to charity. But the fact of the matter is that paying salaries to people who bring in more money than th…

I think there are different parts to this though. Paying large salaries to personnel that do fund raising can be frustrating as a donor because to an extent this is a zero sum game: funds for one NGO mean less funds for another, in many cases. So it doesn’t feel like you’re paying for social good. Another is that while, sure, it makes sense to pay good people well, another part of the discussion is that others among the employees are underpaid. Not-for-profits are to an extent expected to stay outside of harmful side effects of capitalism/economics (I’d say it’s even in the name) and cutting costs on part of your labor seems somewhat in conflict with that.

Of course all of this is the result of pragmatism and a focus on whatever it is that’s being optimized for (some aggregate impact measure which is unlikely to include employee welfare to a large extent).

Re: Donate Unrestricted

#220

Post by codecutter »

kjjjjjjjjjjjjjj wrote: post #129

I strongly disagree with this. If I were donating a large sum to a non-profit that helps poor children, I would absolutely earmark it with a stipulation that it must be used to help poor children who grew up as I did (poor, no opportunities for other aid/scholarships because, well we all know why). In any nonprofit or mentorship situation, I always make sure to reach the children who grew up like me because they trul…

Sorry if I sound harsh, but I wonder if such a donation will be purely to satisfy one's ego. We give donation because we believe in the cause and feel good by donating. When I give donation, I give it unrestricted and sometimes even if it is not tax deductible.
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