We are not assuming perfect Pledge retention. Instead, we are aiming to extrapolate from what we have seen so far (which is a decline in the proportion of Pledgers who give, but an increase in the average amount given when they do).
So I believe that chart is showing the combined effect of (a) imperfect retention; and (b) increased average donations by retained donors (probably because “the average GWWC Pledger is fairly young, and people’s incomes tend to increase as they get older”). With a sufficiently large number of pledgers, considering the combined effect makes sense because they will likely cancel each other out to some extent. When considering a single megadonor, I think one has to consider the retention issue separately because any increased-wealth effect is useless if there is 0% retention of that donor.
Also, to the extent that people were using the value of SBF’s holdings in FTX & Alameda (rather than a rolling average of his past donations) in the analysis, they were already baking in the expectation that he would have more money in years to come than he had to donate now.
Makes sense. Their analysis treats large donors differently, although they don’t mention anything about retention differences vs other pledgers. Given that GWWC say they “often already have individual relationships with them”, my guess is it’s probably slightly higher.
There’s this chart from the What trends do we see in GWWC Pledgers’ giving? subsection of GWWC’s 2020-22 cost-eff self-evaluation:
Joel’s comment on this is worth reading too.
Thanks. The self-evaluation explains that:
So I believe that chart is showing the combined effect of (a) imperfect retention; and (b) increased average donations by retained donors (probably because “the average GWWC Pledger is fairly young, and people’s incomes tend to increase as they get older”). With a sufficiently large number of pledgers, considering the combined effect makes sense because they will likely cancel each other out to some extent. When considering a single megadonor, I think one has to consider the retention issue separately because any increased-wealth effect is useless if there is 0% retention of that donor.
Also, to the extent that people were using the value of SBF’s holdings in FTX & Alameda (rather than a rolling average of his past donations) in the analysis, they were already baking in the expectation that he would have more money in years to come than he had to donate now.
Makes sense. Their analysis treats large donors differently, although they don’t mention anything about retention differences vs other pledgers. Given that GWWC say they “often already have individual relationships with them”, my guess is it’s probably slightly higher.