I understand the desire of the fund to ensure the money is being handed out optimally, but there’s two issues that worry me. First, like investing, there is often a compounding effect to altruism—you help someone locally and they are able to improve the local economy, help others, etc. We may be missing out on the benefits of donating now the current fund system. While there is an argument for giving later vs giving now, Assuming the money isn’t properly invested and compounding (it may well be), then we’re certainly losing out. People would be better off investing the money and giving it when people are ready to receive it.
Another issue is that by giving large grants there’s a greater risk than many small donations. Over or underestimated project costs, inefficiencies, and the like contribute to a chance a donation ends up misallocated or wasted. These mistakes will certainly happen, but with large one-time grants, the risk is larger. Isn’t the whole point of the fund to diversify and reduce risk and inefficiencies?
It seems like it’s less risky and more efficient to just donate directly to the charities in the index. In fact, couldn’t the fund just list where they recommended donations go at any given moment?
I understand the desire of the fund to ensure the money is being handed out optimally, but there’s two issues that worry me. First, like investing, there is often a compounding effect to altruism—you help someone locally and they are able to improve the local economy, help others, etc. We may be missing out on the benefits of donating now the current fund system. While there is an argument for giving later vs giving now, Assuming the money isn’t properly invested and compounding (it may well be), then we’re certainly losing out. People would be better off investing the money and giving it when people are ready to receive it.
Another issue is that by giving large grants there’s a greater risk than many small donations. Over or underestimated project costs, inefficiencies, and the like contribute to a chance a donation ends up misallocated or wasted. These mistakes will certainly happen, but with large one-time grants, the risk is larger. Isn’t the whole point of the fund to diversify and reduce risk and inefficiencies?
It seems like it’s less risky and more efficient to just donate directly to the charities in the index. In fact, couldn’t the fund just list where they recommended donations go at any given moment?