I think this post misses something: the impact of a donation is typically a nonlinear function of donation size.
Specifically, a donation of (say) $200,000 typically achieves more than 100x more impact than a donation of $2,000.
Why?
Because with $200,000, a charity can take meaningful actions now, whereas with $2,000 the funds will likely sit in the charity’s bank account until the charity has built up enough funds from other sources to use the money meaningfully.
Note that this depends on the “unit of action” for the organisation. E.g. for AMF, it may be that $2,000 is enough to do another distribution of bednets (I haven’t checked this). In which case the value of donations probably does scale linearly (at least when comparing a $2,000 donation and a $200,000 donation). But the non-linearity point would be valid if we were comparing $20 with $2,000 (i.e. $2,000 would be more than 100x as valuable as $20).
However for lots of organisations the “unit of action” is the amount of money needed to fund another person’s salary, in which case the non-linearity point would apply in the example I gave ($2,000 vs $200,000).
Obviously all of this is assuming favourable Room For More Funding conditions—i.e. that we have not yet hit diminishing marginal returns on donations.
Also, the point about “money has a time value” hides lots of detail which I haven’t gone into here, but can do if someone requests it.
I think this post misses something: the impact of a donation is typically a nonlinear function of donation size.
Specifically, a donation of (say) $200,000 typically achieves more than 100x more impact than a donation of $2,000.
Why?
Because with $200,000, a charity can take meaningful actions now, whereas with $2,000 the funds will likely sit in the charity’s bank account until the charity has built up enough funds from other sources to use the money meaningfully.
And money has a time value.
Details/caveats:
Note that this depends on the “unit of action” for the organisation. E.g. for AMF, it may be that $2,000 is enough to do another distribution of bednets (I haven’t checked this). In which case the value of donations probably does scale linearly (at least when comparing a $2,000 donation and a $200,000 donation). But the non-linearity point would be valid if we were comparing $20 with $2,000 (i.e. $2,000 would be more than 100x as valuable as $20).
However for lots of organisations the “unit of action” is the amount of money needed to fund another person’s salary, in which case the non-linearity point would apply in the example I gave ($2,000 vs $200,000).
Obviously all of this is assuming favourable Room For More Funding conditions—i.e. that we have not yet hit diminishing marginal returns on donations.
Also, the point about “money has a time value” hides lots of detail which I haven’t gone into here, but can do if someone requests it.