Thanks for laying out the math here. Given the high variance we’ve seen in the community, it does suggest E2G’rs should go for high-risk high-reward choices.
There is one further consideration that I think needs to be added to the higher variance scenario which comes from concentrating donations from fewer people.
If all the E2G people donate to the same charity, then it makes sense to have higher variance in giving as you laid out. However if the E2G people give to different charities, then donations are now skewed towards the preferred charity of the lucky entrepreneur.
One way to think of this is in terms of dollars donated per thought-hour. Assume each donor spends 10 hours thinking about where to donate, and that the lucky entrepreneur spends 20 hours deciding where to donate. In the lower variance scenario, there are ($10,000 * 10 / (10 * 10) hours) = $1,000 dollars donated per thought hour. In the higher variance scenario, there are ( (($40,000 / (10 hrs * 8 people)) * $40,000 + ($275,000 / 20 hours)* $275,000) / $315,000 = $12,067 dollars donated per thought-hour. We’ve traded a 3.15x increase in donations for ~4x (12067 / (3.15*1000)) less thoughtfulness.
So while it’s great to have more money to donate, it’d be nice for the E2G givers to pre-commit in advance to a target charity, fund, donor lottery, or collective decision making process to not dilute the thoughtfulness behind donations. Another option is that the lucky entrepreneur could simply allocate donation decisions for a small portion of their giving to the other E2G people (say $5k each) and it would gain back all the lost thoughtfulness.
Thanks for laying out the math here. Given the high variance we’ve seen in the community, it does suggest E2G’rs should go for high-risk high-reward choices.
There is one further consideration that I think needs to be added to the higher variance scenario which comes from concentrating donations from fewer people.
If all the E2G people donate to the same charity, then it makes sense to have higher variance in giving as you laid out. However if the E2G people give to different charities, then donations are now skewed towards the preferred charity of the lucky entrepreneur.
One way to think of this is in terms of dollars donated per thought-hour. Assume each donor spends 10 hours thinking about where to donate, and that the lucky entrepreneur spends 20 hours deciding where to donate. In the lower variance scenario, there are ($10,000 * 10 / (10 * 10) hours) = $1,000 dollars donated per thought hour. In the higher variance scenario, there are ( (($40,000 / (10 hrs * 8 people)) * $40,000 + ($275,000 / 20 hours)* $275,000) / $315,000 = $12,067 dollars donated per thought-hour. We’ve traded a 3.15x increase in donations for ~4x (12067 / (3.15*1000)) less thoughtfulness.
So while it’s great to have more money to donate, it’d be nice for the E2G givers to pre-commit in advance to a target charity, fund, donor lottery, or collective decision making process to not dilute the thoughtfulness behind donations. Another option is that the lucky entrepreneur could simply allocate donation decisions for a small portion of their giving to the other E2G people (say $5k each) and it would gain back all the lost thoughtfulness.