It is sometimes extremely useful for donors to coordinate in how they go about supporting charities.
For example, suppose that two people both like two charities. They think each should get $10,000 this year, because they believe that diminishing marginal returns mean that $10,000 is the limit of what each charity could spend productively at the moment. Each of them wants to donate a total of $10,000. If they cannot coordinate and randomly choose one of the charities to receive all of their money, then there is a 50% chance that they will each give to the same charity. In that case, the other charity will be unfunded, and the funded charity will be unable to spend all of its money well.
This problem becomes even harder if donors are able to wait to see what others do first. Suppose that both of the donors in the above example prefer the same charity above all others, but they have different views about the next best. In that case, each donor hopes that their favorite charity will be funded by the other donor, so that they can then fund their second choice. They might even give to their second favorite charity immediately, assuming that the other donor will therefore give to the shared favorite. The other donor might do the same with their second-favorite charity, with the result that the shared favorite charity does not get funded at all.
Effective altruists have proposed a variety of potential ways to improve donor coordination and increase, thereby, the effectiveness of individual donations. For instance, Ben Todd proposes that people give to any charity that they think is among the best that the community should fund, whilst Denis Drescher sketches a general approach to the problem and notes important challenges (Todd 2016; Drescher 2016).
Drescher, Denis. 2016. Concept for conor coordination.
A blog post discussing some potential solutions.
Karnofsky, Holden. 2015. Donor coordination and the giver’s dilemma.
GiveWell’s analysis of the problem.
Todd, Ben. 2016. The value of coordination.
80,000 Hours’ discussion of the problem and a potential solution.