Letâs say that GM has $100 in matching funds to distribute. I like Doctors Without Borders and AMF. You prefer March of Dimes and Clean Air Task Force.
I give a $333/â$333 split to my charities. Thatâs a 50â50 split, which gets a 15% match from GM, which equates to $100.
If I get there before you, Doctors Without Borders and AMF both get an extra $50.
If you get there before me and do the same split, March of Dimes and CATF get $50.
Those are different states of the world, determined by which of us gets the match.
If neither of us had used the match, GM would have given $100 to the charity chosen by whichever donor was matching us. Thatâs a third possible state of the world.
If we assume that GM has limited funding, every person who gets a match is theoretically taking funds for their charities, at the expense of someone who would have used those funds for other charities. If this person likes their charities more than most other charities, they are benefiting in some way.
In theory, you could argue that the original matching donor is hurt, because they lose money that would have gone to a charity of their choiceâbut they chose to fund a match, likely because they wanted to encourage people to think more carefully about funding effective charities and were willing to âpay themâ to do so.
I guess I was working on the assumption that it was rare that people would want to split their donation between local and effective a priori, and my point was that GM wasnât useful to people that didnât already want to split their donations in that way before GMâs existenceâbut maybe this assumption is wrong actually
I donât understand what you mean.
Letâs say that GM has $100 in matching funds to distribute. I like Doctors Without Borders and AMF. You prefer March of Dimes and Clean Air Task Force.
I give a $333/â$333 split to my charities. Thatâs a 50â50 split, which gets a 15% match from GM, which equates to $100.
If I get there before you, Doctors Without Borders and AMF both get an extra $50.
If you get there before me and do the same split, March of Dimes and CATF get $50.
Those are different states of the world, determined by which of us gets the match.
If neither of us had used the match, GM would have given $100 to the charity chosen by whichever donor was matching us. Thatâs a third possible state of the world.
If we assume that GM has limited funding, every person who gets a match is theoretically taking funds for their charities, at the expense of someone who would have used those funds for other charities. If this person likes their charities more than most other charities, they are benefiting in some way.
In theory, you could argue that the original matching donor is hurt, because they lose money that would have gone to a charity of their choiceâbut they chose to fund a match, likely because they wanted to encourage people to think more carefully about funding effective charities and were willing to âpay themâ to do so.
What do you think is wrong about this model?
I guess I was working on the assumption that it was rare that people would want to split their donation between local and effective a priori, and my point was that GM wasnât useful to people that didnât already want to split their donations in that way before GMâs existenceâbut maybe this assumption is wrong actually