Philanthropic coordination

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Consider two people who both like two charities. They think each should get $10,000 this year, because they believe thatthat, due to diminishing marginal returns mean, each charity can only spend up to that $10,000 is the limit of what each charity could spend productively at the moment (see also room for more funding). Each of themthese donors 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 moneythe funds 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.best charity. 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.

Philanthropic coordination is one form of altruistic coordination; other forms focus on decisions other than donation decisions, such as career decisions.decisions.

ItPhilanthropic coordination is sometimes useful for donorsthe practice of donors' working together to coordinate in how they go about supporting charities.make individual donations more effective.

Illustration

For example, suppose thatConsider two people who 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 (see also room for more funding). 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.