Against neglectedness considerations

by Benquo1 min read24th Feb 20176 comments

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If the domain you're working in has a divergent dynamic, then this strategy will quickly be exhausted by an efficient market. Your willingness to contribute to public goods becomes an exploitable asset. You're giving others an incentive to manufacture apparently great giving opportunities until you're tapped out – and beyond, as they compete to redirect your funding.

So, would you agree that the standard (non-EA) charity landscape in the West exhibits this "divergent dynamic" in spades?

The biggest ones probably do. Ones like this don't. I'm not sure what the overall distribution is among nonprofits, and there are probably mostly-distinct subsets with their own distinct dynamics.

Notice that Charlie himself says:

if other charities knew he had surplus money to give away, he'd be deluged with solicitations

My impression is that charities like his are rare exceptions.

Rare in which ways? My sense is that there are a lot of things going on where someone was successful, noticed they didn't have good ways to scale up, and stopped scaling up. It's just that these things generally won't be the biggest things around, for the obvious reason.

Rare in which ways?

First, this is all IMHO and I'm not immersed in the charity world, so my views might well be mistaken.

It seems to me that most charities fall into one of two categories. I'll call them "hungry" and "satiated".

Satiated charities have a stable source of income and are generally content to continue to do what they are doing now. They don't put much, if any, effort into expanding and marketing. Such charities are usually small and focused around one or two key people.

Hungry charities are further divided into two subcategories. One is anxious hungry charities -- they are quite uncertain about their funding and live in constant danger of closing down (specific programs or even completely) because they don't have enough money. They will actively market and will grab any money available, if only to stash it into a rainy-day fund.

The other subcategory is large hungry charities. They are basically businesses organized in a particular way and are driven by the universal imperative to grow and expand. They want to maximize their gross revenue and that's about it. Often they are prime examples of the Pournelle's Iron Law of Bureaucracy.

I'd divide hungry into satiable and insatiable: some hungry charities will eventually get full, others are permanent revenue-maximizers. Possibly there's a third, indeterminate state in which both outcomes are possible.