Thanks for the useful model. I think you should report ranges, because one would expect with the one-year multiplier of 1.01, that you would get a 10 year multiplier of 1.01^10 = 1.1. Even with the ranges, it seems counterintuitive to me. If you take the 5th percentile of a 0.84 multiplier, that gives a 10 year 0.17 multiplier, which is close to the Guesstimate result. However, if you take the 95th percentile of a 1.3 multiplier, that gives a 10 year multiplier of 14, which is very different from the Guesstimate value of about 1000. I assume this is because of the fat tail. This shows that this is a high risk strategy from the perspective of the donor-more than 50% of the time they have a smaller impact by investing. But they have some chance of having an enormous impact with investing.
Thanks for the useful model. I think you should report ranges, because one would expect with the one-year multiplier of 1.01, that you would get a 10 year multiplier of 1.01^10 = 1.1. Even with the ranges, it seems counterintuitive to me. If you take the 5th percentile of a 0.84 multiplier, that gives a 10 year 0.17 multiplier, which is close to the Guesstimate result. However, if you take the 95th percentile of a 1.3 multiplier, that gives a 10 year multiplier of 14, which is very different from the Guesstimate value of about 1000. I assume this is because of the fat tail. This shows that this is a high risk strategy from the perspective of the donor-more than 50% of the time they have a smaller impact by investing. But they have some chance of having an enormous impact with investing.