4 ms·
Money is fungible.
by newen 6y ago
Money is fungible.
- jlokier 6y agoNot when conditions are attached to the payment or donation.
- newen 6y agoEven when it is. This should be obvious. Not even sure why I'm spelling this out. Say total amount of money an organization has is $X + $Y. Group A is assigned $X in funding. Group B is assigned $Y in funding. Group A gets $Z in donation with conditions attached so it only gets used by Group A. Then the organization assigns $X - $Z funding to Group A and assigns $Y + $Z funding to Group B. Group A is happy because it still has $X from the donation and doesn't complain. Group B is happy because it can now spend $2.5 million on the CEO.
- jlokier 6y agoCounterpoints, which I'm surprised I have to spell out, are: 1. Limits. The above doesn't apply when $Z > $X, above which the attachment has full effect. 2. Reputation. The sources of recurring $X + $Y have decision making powers with a time lag. They may not be willing to give $X + $Y again if they know it was entirely spent on group B last time. 3. Anticipation. Organization decision makers know 2. Which makes donations with conditions attached into a signal with some effect, rather than something freely fungible with no pressure. If we were to plot a curve of notional pressure and effect on the organization's budgeting decisions, I would expect a curve increasing with the ratio $Z/($X+$Y). A very shallow curve perhaps. But not a flat zero in the range 0..$X as you are suggesting.
- newen 6y agoI simplified a lot obviously but an organizational can last years and years before seeing the effects of reputation pressure. And above applies fine even if $Z > $X modulo nitpicking.