In a vaguely financial markets/efficient market hypothesis train of thought, if you can identify the ‘undervalued’ teams/organizations, there is (presumably?) some kind of benefit in that.
This may be ridiculously simplistic: I often think about how a person who invests $100 million and earns $1 million will be praised much more than a person who invests $100 and earned $20. In some contexts it matters “what are the absolute results” and in some contexts what really matters is “what were your results given what you had.” Sure, I would rather have $1 million than $20, but I’d want to find the person that can get a 20% return and provide them with additional resources.
I do not think there is much reward in the charity sector for identifying undervalued organizations, particularly by criteria that differ from what the market as a whole aims for. Which sadly is not cost-effectiveness, etc. I think that’s part of why it’s a lot easier to find promising missed opportunities compared to the for-profit sector.
I do think it’s much harder (assuming ~equal time) for someone to spend $100 million cost-effectively compared to $100, due to systemic differences. However, I would predict there are many people who could spend $100,000 and get a higher ROI than many people spending $10 million, due to a lack of efficient delegation/regranting/communication between the two.
Thanks for writing this!
In a vaguely financial markets/efficient market hypothesis train of thought, if you can identify the ‘undervalued’ teams/organizations, there is (presumably?) some kind of benefit in that.
This may be ridiculously simplistic: I often think about how a person who invests $100 million and earns $1 million will be praised much more than a person who invests $100 and earned $20. In some contexts it matters “what are the absolute results” and in some contexts what really matters is “what were your results given what you had.” Sure, I would rather have $1 million than $20, but I’d want to find the person that can get a 20% return and provide them with additional resources.
I do not think there is much reward in the charity sector for identifying undervalued organizations, particularly by criteria that differ from what the market as a whole aims for. Which sadly is not cost-effectiveness, etc. I think that’s part of why it’s a lot easier to find promising missed opportunities compared to the for-profit sector.
I do think it’s much harder (assuming ~equal time) for someone to spend $100 million cost-effectively compared to $100, due to systemic differences. However, I would predict there are many people who could spend $100,000 and get a higher ROI than many people spending $10 million, due to a lack of efficient delegation/regranting/communication between the two.