20 ms·

Donate Unrestricted

289 points by razin 6y ago

Jugurtha 6y ago
One of the reasons I give big cash envelopes as gifts to be deployed as recipients see fit. I do offer symbolic gifts, or small cute things, but when the monetary value of the gift is large, I give cash.
- paulryanrogers 6y ago
  When I worked in gift cards one of their benefits was a way to give to people with destructive habits without enabling them. Though hardcore addicts would just sell the cards for cash anyway.
secfirstmd 6y ago
Very true. I've been running non-profits to help the security of journalists and human rights defenders for years (https://www.secfirst.org https://www.secfirst.org). One of the big issues is that donors often only want to fund projects which means core costs (accounting, IT or whatever) often are not covered or are only partly covered. To an extent project specific funding also means that some organisations have to make sacrifices or do projects that aren't central to their mission. Mission creep can happen with some NGOs. Without core costs covered it's also a lot harder to develop new concepts as there isn't really much room essentially for R&D. Core costs in general also become a bit of a barrier to entry for new non-profit ideas and organisations. Core costs usually are only granted by big donors and usually will only be granted to big organisations. It's very very hard as a small org to get core costs paid for so it's hard to scale a lot of things. Collaboration in the NGO field is very varied, a lot of big orgs talk about it but when it comes down to it, often are very lacking. This leads to lots of inefficiency, overlap and duplication. Also the project based funding tends much more towards new ideas rather than maintenance. Maintenance and sustaining projects just doesn't get the same level of funding. For example we built our open source Umbrella App for learning about security with project specific funding. Nearly all of which gets spent specifically on that project. It's very hard for us to find donors willing to fund the ongoing maintenance of the apps. The rest of our core costs has to come from our training and consultancy work with organisations. That's tricky as we love doing it but it means we can't focus as much on our core tool building. Because of the core cost issues, the non-profit space is often very inefficient. It doesn't really have the same culture of startup, mergers, takeovers etc. To extent what you often get is zombie NGOs which become big and inefficient but soak up the donor money and keep smaller/better organisations out of the market. The way big donors work, many are very slow and risk adverse. So that means for example a lot of the big funders will never find any organisation that hasn't been around for at least three to five years. Imagine a VC not finding any company that hasn't been around for more than three to five years!
- splitrocket 6y ago
  This. 100% this.
bmmayer1 6y ago
I've done a fair amount of volunteering for nonprofits, one in particular[1], and I will say that nonprofits are full of the most overworked, underpaid, and passionate people you will meet anywhere. They need every penny they can get, and very often people mistake nonprofits spending money on essential activities like marketing or event planning as "overhead", when such expenditures generate multiples of revenue for every dollar spent. Wouldn't you rather the $1 you donate generate leverage in new donations? One thing that PG doesn't mention here is fungibility: if you restrict your donations, nonprofits will still route unrestricted funds to where they need to be spent. It's still sub-optimal, obviously, but people who donate restricted don't always understand that they don't have as much control as they think they do over where funds will be spent, and that's a good thing. [1] Liberty in North Korea is the best way you can contribute to the wellbeing and success of the North Korean people directly...one $ donated to resettle refugees can return 100% ROI after just 2 years: https://www.libertyinnorthkorea.org/ https://www.libertyinnorthkorea.org/
- bradleyjg 6y ago
  > Wouldn't you rather the $1 you donate generate leverage in new donations? It depends on where the money is coming from. Suppose I donate $100 to a cystic fibrosis charity and using that money they convince 10 people to donate money to their charity instead of the muscular dystrophy foundation. I wouldn’t consider that an effective use of my donation. On the other hand I have no idea how you’d measure that.
  - sjg007 6y ago
    It's measured as overhead and/or donation acquisition expenses. It's never 100%. You can assume some percent of that money goes to such expenses vs actual research (which I guess is where you'd want the money to go, or maybe to outreach or supporting individuals with cf).
    - bradleyjg 6y ago
      That’s not quite what I’m getting at. A marketing dollar that brings in two dollars that would have otherwise been spent on coke is good, a marketing dollar that brings in two dollars that would have otherwise been spent on a different decent charity is not good.
hirundo 6y ago
He didn't mention the little problem of the fungibility of money. If a school gets two $100k donations, and one comes with a "no stem cell research" restriction, then it usually isn't a problem to spend the other donation on that, and the restricted one on the road maintenance that would have been done anyway. So a restricted donation is really only effectively restrictive if it significantly outweighs the rest.
- jefftk 6y ago
  This also illustrates how unrestricted donations are much more useful to the nonprofit. Funds that can be spent as needed are very flexible, and so can fill gaps left by restricted funds.
- rriepe 6y ago
  It's a great reason against donating restricted, but wouldn't help his overall argument that you should trust the non-profit.
- hntrader 6y ago
  > only ... if they significantly outweigh the rest. Or if it causes over-investment into a specific cause (e.g. $100k must go to roads, when the non-profit only wanted to allocate $50k to that), which fungibility of money can't address. The more specific the restriction is, the less fungibility is able to provide an out.
- ma2rten 6y ago
  I wouldn't donate to universities in general. The have growing endowments which they don't spend. It also adds the income inequality in the US, you are essentially donating to the education of rich people. Note that PG talks about non-profits not schools.
  - freedomben 6y ago
    I don't disagree with what you've said, but your Note is wrong. PG in the article specifically uses a University donation as an example.
capableweb 6y ago
> Which means a restricted donation is inherently suboptimal Maybe so, but maybe it's a compromise as well. If not, no funding at all would have been given which maybe would be a net-loss long-term. Receiving money to do research might not always include research you want to do, but you'll gain more experience overall and do better once you get to the research you want to do. I'm thinking from the perspective that if I got to choose where my taxes went to. If I could decide which areas 50% the money goes towards, I think I would have been more happy paying taxes and maybe would add more, in order to fund efforts I believe in personally.
- jonhohle 6y ago
  At least in AZ, we have several tax credits that allow you to donate to organizations in certain categories. Unfortunately it’s a fixed dollar amount and not a percentage of liability. I agree, it would be nice to control where more tax money was directed.
  - pavlov 6y ago
    Elections are how you control where your tax money goes. Micro-earmarks by voters would create enormous imbalances. Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded.
    - jonhohle 6y ago
      The donations are categorized: organizations the at help the working poor, schools (woefully underfunded in AZ), foster and adoption organizations.
    - capableweb 6y ago
      > Micro-earmarks by voters would create enormous imbalances How sure are you about this? Would love to see some research into how things would work if taxes were more "crowd-fund" oriented. > Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded. Maybe in some places today it would go like that, and in others to opposite. Considering the huge wave of "defund the police and fund social work" in the US today, I think the balance would be the other way.
maxerickson 6y ago
Build state capacity, pay taxes.
- splitrocket 6y ago
  Yes, but until then, the dam is still leaking like a sieve, and any hole that can be plugged needs to be plugged.
- rossdavidh 6y ago
  Well I do pay taxes, but your strategy does raise the question of how well the state spends money. There are many people in the world who, for good reasons, neither trust their government to spend the money well, nor feel they have any realistic chance at improving the problems in their government. Government money is often a big target for corruption, and just as malware tends to get written for the software with the biggest market share, corruption tends to accumulate wherever the most money is.
breck 6y ago
I would also suggest donating only to non-profits that make everything they do as open/transparent/public domain as possible. In my limited experience there seems to be a correlation between an organization's productivity in solving their existential problem and how open the org is. The more secretive the organization (and the less public domain content it produces) the more likely it spends a significant amount of its resource on fundraising and cushy salaries for its management. Allen Institute, Wikimedia, Internet Archive, are examples where $1 in inputs leads to $100 in public domain output.
- londons_explore 6y ago
  Wikimedia used to produce an amazing amount of value with only a tiny budget. Lately it's budget has gone up by a factor of 100x, and its usefulness/impact has stayed pretty much the same. Either is was amazing value for money before, or it's a waste of money now. Or both.
  - breck 6y ago
    > Either is was amazing value for money before, or it's a waste of money now. Or both. Maybe it's a sin wave? I find it more valuable than ever, but would agree that it's rate of improvement seems to be constant or declining. If they payoff their technical debt, and move to better DSLs, they could kick things into high gear again.
- splitrocket 6y ago
  In the US, you can look up every single non-profit's finances. The 990 form has almost everything you would want, though, not line-item level of detail. https://www.irs.gov/charities-non-profits/tax-exempt-organization-search https://www.irs.gov/charities-non-profits/tax-exempt-organiz...
- umvi 6y ago
  Wikimedia? last time they were on HN there was a discussion about how only a tiny fraction of their donations go to Wikipedia and the rest is used for other pet projects most people wouldn't necessarily care about. I think the conclusion was that wikimedia exists to grow bigger and ask for more donations not necessarily to be good stewards of said donations. Otherwise wouldn't they be trying to create an endowment that keeps the lights perpetually on at Wikipedia without Jimmy needing to beg every year?
splitrocket 6y ago
100% this. SO much of what is considered "non-profit dysfunction" is a direct result of funders restricting donation utilization. Only X% for opex, y% for capex, z% for comms, where x+y+z == around 5% of funds donated. Can't run an organization like that well.
tims33 6y ago
Kudos to MacKenzie Scott for helping bring this issue to light with her massive unrestricted giving.
- NelsonMinar 6y ago
  She really is an inspiration. Here's her announcement of the gifts and a list of the organizations. https://mackenzie-scott.medium.com/384-ways-to-help-45d0b9ac6ad8 https://mackenzie-scott.medium.com/384-ways-to-help-45d0b9ac...
amelius 6y ago
I stopped donating (with a few exceptions) because of the general lack of transparency in where your money really goes, and the stories of fraud, absurd salaries of CEOs/management and cold-calling which turns out to be so expensive that the first 1 or 2 years you are effectively paying for the call center. Etc. etc.
- cldellow 6y ago
  My wife and I have given reasonably large donations to various groups and told them we're not interested in getting push communication from them. We'll donate again if and when we can. The orgs that don't respect that (Medecins sans Frontieres comes to mind--multiple glossy mailings per year) get removed from the list. It's kind of harsh, but there are plenty of deserving orgs to support who are compatible with this stance. I understand why, in general, such outreach makes sense, but in my specific case, I find it annoying and it doesn't motivate me. I've found the Against Malaria Foundation to be stellar in this regard. They were very responsive in getting set up to accept Canadian stock when I inquired about it. They did one unexpected followup communication, but it wasn't a solicitation. Instead, they were considering changing how stock donation would work in Canada in order to minimize their fees, and wanted feedback on whether it would be a good or bad change from the perspective of a donor. They were explicit that the feedback was optional, and that they weren't soliciting a donation, just effectively doing market research.
- Kevin_S 6y ago
  You should examine the nonprofit's Form 990 if you have concerns or look at their page on Guidestar.
bradleyjg 6y ago
As a corollary if you feel like you want to make a restricted donation to a particular organization, don’t donate to that organization. Find one that’s better aligned with your values.
- yboris 6y ago
  Better yet, re-align your values towards "help as many individuals as much as possible with the limited funds available". It's often the case that there are more cost-effective ways of helping people. Preventing people from getting malaria costs very little - so much cheaper than trying to cure a single individual from cancer (for example). Suffering is suffering, and it shouldn't matter whether it happens in your country or another. Help as many as you can by being cost-effective (see GiveWell for research).
purple_ferret 6y ago
I work at a non-profit, and, anecdotally, I think it is more complicated as there might be 3 areas of funding concentration: 1. Areas that are overfunded because restricted donations tend to concentrate there. 2. Areas that leadership want to fund, and would direct unrestricted donations to. 3. Areas that neither restricted donations nor leadership want to fund and thus tend to be chronically underfunded (e.g. payroll and staffing in certain departments) I think thoughtful restricted donations have a place then, but a key is understanding of the industry and transparency in operations
temp8964 6y ago
The article mentioned the Gates foundation which has terrible records in education initiatives: - The big failure in small schools initiative: https://marginalrevolution.com/marginalrevolution/2010/09/the-small-schools-myth.html https://marginalrevolution.com/marginalrevolution/2010/09/th... - The big failure in teacher evaluation initiative: https://www.businessinsider.com/bill-melinda-gates-foundation-education-initiative-failure-2018-6 https://www.businessinsider.com/bill-melinda-gates-foundatio... - The big failure in Common Core initiative: https://www.washingtonpost.com/news/answer-sheet/wp/2016/06/02/gates-foundation-chief-admits-common-core-mistakes/ https://www.washingtonpost.com/news/answer-sheet/wp/2016/06/... Now it is funding anti-racist math: https://equitablemath.org/ https://equitablemath.org/
- JoeAltmaier 6y ago
  Interestingly, its still their money, and still their choice where to use it.
  - temp8964 6y ago
    Yes. Even when they are probably doing more harm than good.
    - JoeAltmaier 6y ago
      We learn. That's not harm.
      - pfortuny 6y ago
        At the expense of others. That is.
        JoeAltmaier 6y ago
        Not so much? Hard to do worse than we already are :)
  - ramraj07 6y ago
sneak 6y ago
This highlights an issue that the article doesn't touch: how to choose trustworthy donation targets? It implies you should not to trust places with your money if you don't trust them to allocate it, which is correct, but how to know who to trust? I generally stick near-exclusively to GiveWell as a result. https://www.givewell.org/ https://www.givewell.org/ Each year they use a small fixed percentage of donations to research the most human benefit per dollar spent, and then use the remainder on that one single thing, maximizing the positive impact per dollar. The only thing the donor needs to know is that they have it handled. Any money you give them will go 100% to the thing they have determined is maximum impact that year. (One year recently it was mosquito netting, to prevent malaria, if I recall correctly.) This might sound like an ad but I'm not affiliated in any way, just a happy donor who is glad they exist.
- yboris 6y ago
  I second this. I've been giving to GiveWell's top-recommended charities for about 10 years now (10% of my income - see Giving What We Can). Please give your money to charities that are cost-effective - ones that have research-proven ways of helping others (and thus help the most per dollar given). Rather than doing your own research, it's worth trusting GiveWell (with their 10+ years of focus on finding the most cost-effective charities).
no_wizard 6y ago
And yet a constant theme I keep hearing on HN and other places is that “I would only donate if I could support X initiative at Y foundation” Mozilla comes to mind here. People often claiming they would donate if they could support only specific parts of the organization. This article shows there is much more nuance to think about here than just supporting a specific part of an organization
- autarch 6y ago
  > People often claiming they would donate if they could support only specific parts of the organization. I think this may simply reflect lack of faith in Mozilla as a nonprofit. People don't trust them to use an unrestricted donation in a way that they think is good.
- marcinzm 6y ago
  With Mozilla it's more that there is no way to donate money in a way where any of it will ever help the initiative (Firefox) you care about. Mozilla the foundation does not work on Firefox, Mozilla the corporation works on Firefox. Money flows from corp to foundation, not the other way around. So it's more of an issue of there being no non-profit that supports Firefox development. Or another way of saying it is that people don't like the current Mozilla mission statement and if it were different then they'd donate.
soneca 6y ago
Oh, it’s good to be back enjoying a PG essay! :) Even if it is just a short message rather than a grandiose statement (maybe that’s the reason I like it). I worked with nonprofits (and philanthropy advice in particular) for a long time and this is a great message to send. I don’t think it will change things much, as I don’t think PG has as much influence in the nonprofit world as he has in the startups world, but worth the shot.
deleted 6y ago
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Bostonian 6y ago
Here is an essay showing how women's higher education in the U.S. was boosted by restricted donations to universities: https://www.jamesgmartin.center/2021/02/feminist-college-funders-and-the-problem-of-donor-intent/ https://www.jamesgmartin.center/2021/02/feminist-college-fun... .
- robocat 6y ago
  Nice counter-example from 1890 from article (condensed and paraphrased by me): Johns Hopkins University wanted a medical school. It could not afford it, but had said they needed $500k. Garrett, a lesbian, collaborated with her partner, M. Carey Thomas, and they successfully raised $100k and offered it to Hopkins on the condition that the medical school admit women “under the same terms as men.” Hopkins’ trustees accepted the gift and the conditions the donors imposed and said they would invest the money until the rest of the $500k was sourced. Hopkins president Daniel Coit Gilman then frantically tried to return the money. Although he never explicitly said so, Johnson suspects that was because he wanted the medical school to only admit men. “You do not realize Mr. Gilman’s grim determination,” Thomas wrote to Garrett, “it is with him a death struggle & money means nothing to him.” In December 1892, Garrett made a second offer. She noted the fund given in 1890 had risen to $200k, and said she would donate the remaining $300k, provided the school would admit women on the same terms as men. In 1893, the Hopkins trustees caved and accepted Garrett’s donation unconditionally. The Johns Hopkins medical school became a national model.
JoeAltmaier 6y ago
I like to donate when I know a person involved. I find it hard to trust an organization or title. I donate cash to the local food bank, which is run by neighbors. I donate to my son's college student organization, run by folks he knows. I donate to a guy I see on the street frequently, who has been camping since he became homeless in 1985.
- yboris 6y ago
  It's wonderful that you're already donating non-trivial amounts. Would you have more trust if an independent charity evaluator spent over a decade vetting charities - picking only ones transparent enough that can be scrutinized, and then choosing only the most cost-effective? See GiveWell for their research. When giving internationally, you can multiply the positive impact a thousand-fold (because it's much more expensive to help anyone in the richest country in the world).
  - JoeAltmaier 6y ago
    I'm sure others are doing that. For my part, I take care of my neighbors. Because if we are never careful to do that, then it may never happen at all.
gist 6y ago
> If restricted donations do less good than unrestricted ones, why do donors so often make them? Partly because doing good isn't donors' only motive. They often have other motives as well — to make a mark, or to generate good publicity Bottom line is this: It's a net loss for non-profits if there is a stigma that is attached to people who donate for in part 'the wrong reasons'.
mengledowl 6y ago
"If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all." Years ago, I had a startup that was building software for non-profits. We spent a lot of time around them, talking to them, etc. This problem of incompetence that PG briefly touches on is rampant to a degree that most would never realize. Most large NPs are more inefficient than you could possibly imagine with their money (if you don't believe me, go look at how much of their money goes to administration and how much the people at the top are paying themselves). The SMB NPs (the group my startup served) were typically run either by narcissists who's real goal was to look good to other people, or they were very non-business/money savvy and driven by passion (in a negative way). Both of these lead to poor decision making, one way or the other. The narcissists tended to do everything they could to look good while doing almost nothing (think: hosting galas to raise "awareness" or finding ways to be involved with big important people, without actually furthering their mission). They looked great in the public eye most of the time and could flaunt their "goodness" while secretly treating their employees like trash behind closed doors. Example: the director/founder of one NP I know of that had a mission of helping pregnant women in crisis forced her 8 months pregnant employee to walk for miles through DC and do manual labor for her. She chewed her out in front of the whole team for saying she wasn't physically capable and made her cry, demanding that she do something that was technically her (the director's) responsibility. The non-business/money savvy person who is driven by passion at least has good intentions, but they let that passion run wild without tempering it. This leads to knee-jerk reactions and doing things just to do them, without taking the time to play the long game or even determine if the action they're taking is helping or hurting. It's the classic "give a man a fish vs. teach a man to fish" problem, where they don't slow down to look closer, and so find themselves perpetually addressing the crisis instead of the underlying issue, or creating sustainable solutions. The NPs that manage to avoid these are so exceedingly rare in my experience that it has turned me into a cynic. I just assume that there's incompetence at play, and even outright abuse. Anyway, I agree with PG, I just had to expand on that point because it almost felt like a footnote when IMO it is a huge part of the problem: finding good NPs to donate to unrestricted. Otherwise, you have to settle for incompetence and restrict that incompetence.
- macintux 6y ago
autarch 6y ago
Having spent many years volunteering for various nonprofit, and having been deeply involved in fundraising and budgeting, I cannot upvote this enough! Restricted donations add overhead while making it harder to fund important things like bookkeeping, rent for an office, and staff salaries. If you believe in the nonprofit's mission, just let them figure out what to do with the money!
- quercusa 6y ago
  On the same note, you are better off making a few large donations instead of spreading a bunch of small ones around that get eaten up by overhead.
buss 6y ago
As a board member of two nonprofits, I STRONGLY agree with pg. Restricted donations are not only an administerial headache, they strain the donor/recipient relationship and lead to suboptimal spending.
latchkey 6y ago
This article touches on non-profits, but I feel it comes from a deeper well. We are wired in our culture around how we give donations. We only give money to people who we think would spend it most wisely. We walk past all the people in San Francisco on the street because we know that if we give them money it will only go to more drug use. We drive past the person on the left turn lane because we don't want to encourage him to be there. When I spent 2 years traveling by motorbike all over Vietnam, Cambodia and Laos, I saw first hand what donations do from birth... little kids in the middle of nowhere would run up to me and say hey DOLLAR, give me DOLLAR. They were trained for that.
- danans 6y ago
  > little kids in the middle of nowhere would run up to me and say hey DOLLAR, give me DOLLAR. They were trained for that. And why not? It seems like rational behavior on the part of the kids/families given their circumstances and their incentive systems.
  - latchkey 6y ago
    My point is that some other foreigner drove past them before me and gave them money. Just like the person sitting on the left turn lane learned it from somewhere. I wasn't arguing that the behavior is rational or not. I'm talking about how we are wired in our culture around giving donations and it isn't just about how donors dictate how non-profits spend their money.
- geofft 6y ago
  I mean, the real problem with Vietnam, Cambodia, and Laos is the illegal war the US fought there to maintain the value of the dollar. Charitable donations are by definition a response to a failure of society in one way or another (regardless of whether your political views consider it a failure of the market, a failure of government, or some of both). Even in the ideal case, they exist because some problem is so bad that someone feels morally compelled to give their spare money to try to solve it. We donate to provide water to certain places in Africa (or Michigan) because there isn't reliable infrastructure there, but we don't need to donate to provide water to San Francisco. We donate to specific medical research goals because the funding system for medical research (again, whether it's government-backed or market-backed) isn't investing in some problem, and we think throwing a bit of money at it might cause us to happen on a cure, and at the same time we complain about how other medical costs for different problems are out of control. We donate to legal activism nonprofits because, bluntly, we believe our justice system will fail to be just without that intervention. We donate to Mozilla because there's no money to be made in selling web browsers thanks to the various vertically-integrated competitors but we think independent web browsers are still valuable. And the Gates Foundation donates to Vietnam, Cambodia, and Laos because the kids there quite frankly will never grow up to be Bill Gates without rebuilding some infrastructure first. (Or, of course, charitable donations are PR - a way for the Andrew Carnegies of the world to deflect questions about whether they've quietly caused more failures of society than they're currently loudly fixing.) The reason that your town needs a food bank is that there are people in your town who can't just afford food and need to rely on the whims of people who believe in private charity in order to not starve to death. Running the food bank is great, and I'm glad that there are people with those whims, but making it so that nobody in your town has that problem would be even better. It doesn't matter if your answer is "more taxes to support welfare" or "more teaching people to fish," either of them is more sustainable. I'm not saying we shouldn't donate to worthy causes. I do, quite a bit, and I think those of us who make tech-industry salaries do in fact have a moral obligation to do that for as long as these failures of society exist. But let's admit that it's a second-class approach. Donations cannot solve problems. They can at best soothe the effects of a problem. There isn't really any fundamental difference between the guy with a sign on 101 asking for a dollar every day, the kid in Vietnam asking for a dollar every day, and the New York Public Library emailing me to ask for many dollars every day. Or, ultimately, even the beloved local for-profit business with a Kickstarter to save them from shutdown asking for a (hopefully) one-time pile of cash to make rent. All of them feel like their best shot is to hope for donations. Let's figure out where they should be getting funds from instead.
gist 6y ago
> Many donors may simply never have considered the distinction between restricted and unrestricted donations. They may believe that donating money for some specific purpose is just how donation works. And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors. In other words they smartly are thinking they don't want to kill 'the sale'. When businesses sell products do they typically list all the potential downsides or defects in their product or service when doing so might discourage the purchase? Maybe as I said in my other comment they realize that less money would come in because they would rain on a parade going on in someone's mind. Example let's say someone wants for vanity purposes (an entirely valid reason) to have a building named after them. The non profit (could be a school or some research institution) then says to them 'well you know we can do that but why don't we put the money toward this cause instead after all why does it have to be about you and your family name being perpetuated!!!?'. That's an exaggeration sure (in terms of how the words would go. However principle is that the person donating would then have a negative ie 'the wrong reasons' attached to what they were convincing themselves was a selfless act.
rossdavidh 6y ago
I worked in Accounting (the dept that did it, not the one that taught it) IT at a major public university for several years. Something like half of the software complexity was in keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on. Whether the source was the federal government, the state, corporate donors, or wealthy individuals, they all had strong opinions on what the money could be spent on. It was much easier to get money donated for a new building, than to maintain an old one, so you can have a situation in which new buildings are being built while old ones fall apart. The most surprising thing to me was how small a percentage of the budget was under the control of the president of the university; it was only a tiny amount. Virtually all of the money was controlled by the source, not by the administration.
- deleted 6y ago
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- jasode 6y ago
  >complexity was in keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on. [...] they all had strong opinions on what the money could be spent on. Understand your frustration but the public was outraged when $1 million of a librarian's donation was used for a football scoreboard.[1] Yes, the university did comply to the exact letter of his will (only $100k was restricted for library and the rest was unrestricted) ... but the public thinks the spirit of his donation was ignored. [1] https://www.google.com/search?q=librarian+donation+used+for+football+scoreboard https://www.google.com/search?q=librarian+donation+used+for+...
  - xirbeosbwo1234 6y ago
    The problem with that is, in part, that they ignored the spirit of the donation, but also that the proper amount for a university to spend on a scoreboard is twelve dollars and thirty-seven cents. OK, that's a bit unrealistic. I could build them one for a few hundred, though, and they could pay a student $50 to flip over the numbers during the game.
amznbyebyebye 6y ago
Why does he write like an SAT reading comprehension passage
- bmn__ 6y ago
  It's called an essay, my good man.
kevmo 6y ago
This is why billionaire philanthropy is such a scam. It's just a tax-free way for oligarch to create societal infrastructure that further entrenches their hegemony.
danans 6y ago
Notably, certain types of organizations (i.e. CA public school PTAs) only accept unrestricted donations for some of these reasons.
jmkd 6y ago
Am mid-founding a startup which will give 5% of its profits to charity from day 1. Customers won't have a choice about this - either the amount or the charities chosen - so this will be intrinsic to doing business with us. Trade with us if you like that, don't if you don't. Will be on a tiny scale compared to the donations PG refers to, but customers (who are donating indirectly) will have to trust us, while we trust the charities we give to. There's no meddling or options to choose from, by design, for the same reasons PG describes.
deleted 6y ago
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JackC 6y ago
"And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors." Nonprofits can be realistic about this without being cynical about it. I worked with a very good nonprofit that had the fundraising mantra "don't give until it hurts, give until it feels good." As in, recognize that donors give because giving makes them feel better about themselves and the world they live in, and that's OK and something to encourage -- you just have to connect it to the mission. That means, yeah, you have to take restricted funds and do benefit dinners and other partially-wasteful stuff, and you have to emphasize the photogenic parts of your work more than others. But more importantly, you have to clearly tell the story about your theory of change to your donors, so you're attracting the right donors and educating them to support your mission. They're the "right" donors because the more they learn about how and why you're spending their money, the better they feel about themselves and the world. That sets up a virtuous cycle where you're adequately funded and you're incentivized to do better at your actual mission so you have more to share back. If you get _that_ wrong, and your donors feel good about their donations for fundamentally different reasons than what you're actually spending them for, that's when you end up with funding undercutting the mission.
jariel 6y ago
The third restriction is 'purpose gifts' i.e. build a stadium and put my name on it, which seems entirely fair to me.
donate12301923 6y ago
So, let's unwrap this. You make some money. Which is taxed in various ways. The pie gets bigger, the state (and the People) are getting a cut. Then you are told you should do more. And you also think, well, why not help the world? Then you are told: but don't waste your time volunteering at a shelter -- better work and donate your money instead. OK, so you don't get the satisfaction of seeing the humans you help but you know that at least your donation helps, maybe, the same humans you want. A restricted donation gives you some agency into improving the world. You are still abstracted away, you don't really see the humans you are supposedly helping, but at least the money only goes into improving the world into some dimension that needs improving and that you consider relevant. But no, what you must do is just donate unrestricted. That is, have no agency, have no interaction with actual humans in need, be just a wallet that helps, maybe, something as defined by the entity that receives the money. Your only choice is who spends it and how much to give them. At this point, how about we bring this to the logical conclusion that THERE SHOULD BE NO NONPROFITS. Clearly, if those with the already taxed money can't have an opinion, why should those nonprofits know what's what? You know who could spend the money: the State! So, abolish non-profits, and make the State as the sole decider of how things get spent. Then you can donate unrestricted to the State or just push for some taxes being raised.
- macintux 6y ago
  > but don't waste your time volunteering at a shelter -- better work and donate your money instead. Bad advice. Volunteering is vital. I'm not sure why anyone would argue otherwise.
chabad360 6y ago
A way of dealing with this issue that I've seen in the jewish community (I only have extensive experience there), is to provide sponsorship opportunities: a way for the donor to restrict the usage of their money and a way for the organization to get it where it's needed. While it doesn't cover everything, it can really help reduce the requirement for having donations that can be used for anything.
ralmidani 6y ago
Over the years my opinion of non-profits has become less, shall we say, “charitable”; society has a tendency to glorify non-profits because they “don’t have shareholders” but, in reality, a lot of non-profits give peanuts to those at the bottom (with some even working for free) while executives get far more than a living salary. And whether you’re an educational institution, an insurance provider, or an NGO, being an executive comes with lots of perks like travel, entertainment, lavish offices, etc. So while “no shareholders” is often a selling point for supporting a non-profit, there are still people getting an oversized benefit out of non-profits, who in some disturbing cases are the founders and their family members. If I wanted to donate a large amount of money to a non-profit, I would structure it as a zero-interest loan, and would just keep deferring the repayment of the loan as long as the org stays true to its mission, compensates executives in reasonable proportion to regular employees, etc. Brian Acton (who co-founded WhatsApp, and later left Facebook) is supporting the Signal Foundation with tens of millions in deferrable, interest-free loans. I think it’s absolutely genius, and wish more people would follow his example.
- stephen_greet 6y ago
  I think that's a really interesting middle ground. Do you think it can fall into the same trap as mentioned in the article, where it can become "sub-optimal" due to not being as expert as the non-profit?
  - ralmidani 6y ago
    I think it’s less prone to that problem if you take a holistic approach when evaluating whether a loan should be repaid, rather than applying very narrow criteria such as “must be spent on a new building”.
  - lazyasciiart 6y ago
    It's exactly the problem in the article, taken to a ludicrous extreme. If you want to be able to decide how a nonprofit should spend their money, go take a seat on the board (or staff).
- elcomet 6y ago
deleted 6y ago
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mcguire 6y ago
Wow. A Paul Graham essay I completely agree with. Will wonders never cease? :-)
dougb5 6y ago
Not so long ago the author warned that non-profits are a "magnet for sociopaths" because "their defining feature is to make no profit" and there's "no intrinsic accountability". (https://twitter.com/paulg/status/1124254508232663040?lang=en https://twitter.com/paulg/status/1124254508232663040?lang=en). I thought this was an odious and wrong thing to say for many reasons and it made me think that while he clearly has a lot of experience with non-profits of a certain kind or scale or connection to tech VC, maybe it's not so broad-based. And it's hard for me to square this attitude with this new blog post: If there's no intrinsic accountability, then how do unrestricted gifts help? Shouldn't gifts provide some of that accountability? The best interpretation I can come up with is "Apply very strict conditions to where you decide to donate, but when you do, do it unconditionally".
kjjjjjjjjjjjjjj 6y ago
I strongly disagree with this. If I were donating a large sum to a non-profit that helps poor children, I would absolutely earmark it with a stipulation that it must be used to help poor children who grew up as I did (poor, no opportunities for other aid/scholarships because, well we all know why). In any nonprofit or mentorship situation, I always make sure to reach the children who grew up like me because they truly have no means of assistance.
- santoshalper 6y ago
  From the outside, it really looks like it's more about you than it is about helping anyone else.
  - remote_phone 6y ago
    But the end recipients are getting the money, so who cares?
    - randomsearch 6y ago
      Because the charity knows how best to spend it, not you (as explained in the essay).
      - kjjjjjjjjjjjjjj 6y ago
        They don't though, they just think they do. Their goals are largely motivated by current politics.
        jayzalowitz 6y ago
        I would agree with this. In my youth experience as well, politics in relation to non profits determined if you were housed/fed.
    - lazyasciiart 6y ago
      Are they? Or is it sitting there in an account labelled "children named Tom who live in a town of between 10,000 and 11,000 people and got a C in math in 2003"?
neilv 6y ago
> Usually the way the donor wants the money spent is not the way the nonprofit would have chosen. [...] If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all. The situation might not be "understand", but "choose". The donor's interests in donating might not be 100% aligned with the effective mission of the charity. For one example, I imagine the donor might have a particular problem they want addressed, and that overlaps incompletely with the activity of the charity, but the charity otherwise seems the best vehicle for addressing that particular problem. For a less admirable example (but still perhaps beneficial to society), I imagine a donation might have PR or social status value for the donor, and a donation for a particular cause/effort sounds better than some of the less-fashionable work of the nonprofit. Or the donor might want the PR/status of their name on a center, and want to make sure that the center has funds to keep paying PR/status dividends.
dantheman 6y ago
Restricted donations can keep the nonprofit from changing is focus. For instance, the ACLU is wavering in it's defense of free speech - if I were to give money to them, it wiuld have to be structured to support the defense of all speech regardless of content.
satya71 6y ago
Agree 100%. I wrote a short essay [1] about the problem why charitable donations cannot achieve the intended effect. [1] https://snmishra.wordpress.com/2016/03/11/why-tax-deduction-for-charitable-contributions-is-bad/ https://snmishra.wordpress.com/2016/03/11/why-tax-deduction-...
mattr47 6y ago
I help direct about $2.4 million each year to various parts of the world. We often receive inquiries about donating to a specific need or geographic location and we tell them no thank you. If people believe in our mission and leadership, then they give without any qualifications to what it shall be used for. We provide accurate records, and reports of what the money goes to.
- codecutter 6y ago
  As a donor, I would appreciate that. It will help me decide whether to give money to charity A vs. charity B. There will always be someone willing to accept the donation. PS: AFAIK, Religious institutions in USA are exempt from Form-990 so a donor wouldn't anyway know where the money is going.
Black101 6y ago
Most people let companies donate with their money... i.e.: Mcdonald boxes at the cash register...
Ericson2314 6y ago
Wow, P.G. almost gets it. The most unrestricted donation is paying your damn taxes. Get rid of the philanthropy loophole, raise the taxes, and lets invest our surplus democratically.
deleted 6y ago
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rdiddly 6y ago
The one restriction I insist on is that they leave me off their mailing list! I get it, the odds are good that a previous donor will donate again, but especially for small donations it ends up feeling like all I accomplished was to purchase a bunch of spam & kill some trees!
ALittleLight 6y ago
"Unfortunately restricted donations tend to generate more publicity than unrestricted ones. "X donates money to build a school in Africa" is not only more interesting than "X donates money to Y nonprofit to spend as Y chooses," but also focuses more attention on X." Seems like you could arrange the donation, get the charity to tell you what it would be for, and then use that as the announcement. You might get less attention getting descriptions, but I feel like it would still be net-moral to get a little creative with how you described it.
l2silver 6y ago
I recently helped to found DigLit.ca, and non profit that helps build technology for other nonprofits. What we've found when dealing with nonprofits is that a lot of the smaller organizations are, suprise suprise, struggling to survive. They're trying to carryout their general missions, but unless they have some kind of consistent funding model, a lot of their energy is turned towards keeping the organization alive. I don't think there's anything wrong with that, it's just the nature of the nonprofit game. But our organization acts a bit like a technology donor, and we've definitely had to restrict the nature of our services to mission facing purposes. Aside from the technical challenges of contributing to the survival of an organization, we've also found that developers want to help with problems directly.
- MattGaiser 6y ago
  I once had an interview where one of the questions asked was whether I was on working on non-consumer facing products. They apparently had past hires be angry about doing so.
DC1350 6y ago
This assumes that the nonprofit has the same goals as the donor so it’s not always true. Maybe that would be covered by the umbrella organization bit, but sometimes there’s no organization that cares so donors need to leverage existing ones to fund what they want.
temuze 6y ago
Also important: donate regularly. Ad-hoc donations make it difficult for a nonprofit to plan their budget. It forces them to spend a lot of that money to solicit more donations. My friend made a tool to donate anonymously and regularly to non-profits: https://sublimefund.org/ https://sublimefund.org/ Less spam, better for the non-profits. It's a good combination.
- deleted 6y ago
  [deleted]
selfishgene 6y ago
Would nudging tax rates a little higher on the highest income brackets and Congress taking steps to close the many tax loopholes that companies exploit to avoid paying their fair share of corporate taxes in this country not also help fix this vexing problem? As usual, the question boils down to whether or not you prefer monopolists like Bill Gates who "beat the charges" back in 2002 or polluters like the Koch brothers deciding what "good work" gets done ... or the brilliant intellectuals that we elect to Congress like this beauty: https://www.thenation.com/article/archive/aoc-republicans-lies-climate/ https://www.thenation.com/article/archive/aoc-republicans-li... Tough choices for sure.
davidgerard 6y ago
This is basically correct. Restricted donations are a goddamn pain in the ass. If you trust a charity is doing stuff you like, just trust them to spend the money doing stuff you like.
IG_Semmelweiss 6y ago
the nassim taleb heuristic here comes in handy: When solicited for charity funding on the literal street, usually by a young person, he always asks the that young person "are they paying you to work here?" If yes, he won't donate. The simple logic is, if the charity's mission is strong enough, someone will volunteer his/her own time to solicit donations. Being paid to stand there is a signal (a filter) that the cause is not strong enough. Therefore, you pass.
chmod600 6y ago
Can't a non-profit say something like: "Of course we can restrict your donation to X. But we're also happy to listen to what's most important to you and work yith you to develop a plan based on our expertise, and how ot fits into a larger story." The hidden mesaage in there is not just "we know best" but also, "we can help you with the PR story or legacy or whatever you want".

289 points by razin 6y ago

One of the reasons I give big cash envelopes as gifts to be deployed as recipients see fit. I do offer symbolic gifts, or small cute things, but when the monetary value of the gift is large, I give cash.

paulryanrogers 6y ago
When I worked in gift cards one of their benefits was a way to give to people with destructive habits without enabling them. Though hardcore addicts would just sell the cards for cash anyway.

secfirstmd 6y ago

Very true. I've been running non-profits to help the security of journalists and human rights defenders for years (https://www.secfirst.org https://www.secfirst.org). One of the big issues is that donors often only want to fund projects which means core costs (accounting, IT or whatever) often are not covered or are only partly covered. To an extent project specific funding also means that some organisations have to make sacrifices or do projects that aren't central to their mission. Mission creep can happen with some NGOs. Without core costs covered it's also a lot harder to develop new concepts as there isn't really much room essentially for R&D. Core costs in general also become a bit of a barrier to entry for new non-profit ideas and organisations. Core costs usually are only granted by big donors and usually will only be granted to big organisations. It's very very hard as a small org to get core costs paid for so it's hard to scale a lot of things. Collaboration in the NGO field is very varied, a lot of big orgs talk about it but when it comes down to it, often are very lacking. This leads to lots of inefficiency, overlap and duplication. Also the project based funding tends much more towards new ideas rather than maintenance. Maintenance and sustaining projects just doesn't get the same level of funding. For example we built our open source Umbrella App for learning about security with project specific funding. Nearly all of which gets spent specifically on that project. It's very hard for us to find donors willing to fund the ongoing maintenance of the apps. The rest of our core costs has to come from our training and consultancy work with organisations. That's tricky as we love doing it but it means we can't focus as much on our core tool building. Because of the core cost issues, the non-profit space is often very inefficient. It doesn't really have the same culture of startup, mergers, takeovers etc. To extent what you often get is zombie NGOs which become big and inefficient but soak up the donor money and keep smaller/better organisations out of the market. The way big donors work, many are very slow and risk adverse. So that means for example a lot of the big funders will never find any organisation that hasn't been around for at least three to five years. Imagine a VC not finding any company that hasn't been around for more than three to five years!

splitrocket 6y ago
This. 100% this.

bmmayer1 6y ago

I've done a fair amount of volunteering for nonprofits, one in particular[1], and I will say that nonprofits are full of the most overworked, underpaid, and passionate people you will meet anywhere. They need every penny they can get, and very often people mistake nonprofits spending money on essential activities like marketing or event planning as "overhead", when such expenditures generate multiples of revenue for every dollar spent. Wouldn't you rather the $1 you donate generate leverage in new donations? One thing that PG doesn't mention here is fungibility: if you restrict your donations, nonprofits will still route unrestricted funds to where they need to be spent. It's still sub-optimal, obviously, but people who donate restricted don't always understand that they don't have as much control as they think they do over where funds will be spent, and that's a good thing. [1] Liberty in North Korea is the best way you can contribute to the wellbeing and success of the North Korean people directly...one $ donated to resettle refugees can return 100% ROI after just 2 years: https://www.libertyinnorthkorea.org/ https://www.libertyinnorthkorea.org/

bradleyjg 6y ago
> Wouldn't you rather the $1 you donate generate leverage in new donations? It depends on where the money is coming from. Suppose I donate $100 to a cystic fibrosis charity and using that money they convince 10 people to donate money to their charity instead of the muscular dystrophy foundation. I wouldn’t consider that an effective use of my donation. On the other hand I have no idea how you’d measure that.
- sjg007 6y ago
  It's measured as overhead and/or donation acquisition expenses. It's never 100%. You can assume some percent of that money goes to such expenses vs actual research (which I guess is where you'd want the money to go, or maybe to outreach or supporting individuals with cf).
  - bradleyjg 6y ago
    That’s not quite what I’m getting at. A marketing dollar that brings in two dollars that would have otherwise been spent on coke is good, a marketing dollar that brings in two dollars that would have otherwise been spent on a different decent charity is not good.

hirundo 6y ago

He didn't mention the little problem of the fungibility of money. If a school gets two $100k donations, and one comes with a "no stem cell research" restriction, then it usually isn't a problem to spend the other donation on that, and the restricted one on the road maintenance that would have been done anyway. So a restricted donation is really only effectively restrictive if it significantly outweighs the rest.

jefftk 6y ago
This also illustrates how unrestricted donations are much more useful to the nonprofit. Funds that can be spent as needed are very flexible, and so can fill gaps left by restricted funds.
rriepe 6y ago
It's a great reason against donating restricted, but wouldn't help his overall argument that you should trust the non-profit.
hntrader 6y ago
> only ... if they significantly outweigh the rest. Or if it causes over-investment into a specific cause (e.g. $100k must go to roads, when the non-profit only wanted to allocate $50k to that), which fungibility of money can't address. The more specific the restriction is, the less fungibility is able to provide an out.
ma2rten 6y ago
I wouldn't donate to universities in general. The have growing endowments which they don't spend. It also adds the income inequality in the US, you are essentially donating to the education of rich people. Note that PG talks about non-profits not schools.
- freedomben 6y ago
  I don't disagree with what you've said, but your Note is wrong. PG in the article specifically uses a University donation as an example.

capableweb 6y ago

> Which means a restricted donation is inherently suboptimal Maybe so, but maybe it's a compromise as well. If not, no funding at all would have been given which maybe would be a net-loss long-term. Receiving money to do research might not always include research you want to do, but you'll gain more experience overall and do better once you get to the research you want to do. I'm thinking from the perspective that if I got to choose where my taxes went to. If I could decide which areas 50% the money goes towards, I think I would have been more happy paying taxes and maybe would add more, in order to fund efforts I believe in personally.

jonhohle 6y ago
At least in AZ, we have several tax credits that allow you to donate to organizations in certain categories. Unfortunately it’s a fixed dollar amount and not a percentage of liability. I agree, it would be nice to control where more tax money was directed.
- pavlov 6y ago
  Elections are how you control where your tax money goes. Micro-earmarks by voters would create enormous imbalances. Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded.
  - jonhohle 6y ago
    The donations are categorized: organizations the at help the working poor, schools (woefully underfunded in AZ), foster and adoption organizations.
  - capableweb 6y ago
    > Micro-earmarks by voters would create enormous imbalances How sure are you about this? Would love to see some research into how things would work if taxes were more "crowd-fund" oriented. > Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded. Maybe in some places today it would go like that, and in others to opposite. Considering the huge wave of "defund the police and fund social work" in the US today, I think the balance would be the other way.

maxerickson 6y ago

Build state capacity, pay taxes.

splitrocket 6y ago
Yes, but until then, the dam is still leaking like a sieve, and any hole that can be plugged needs to be plugged.
rossdavidh 6y ago
Well I do pay taxes, but your strategy does raise the question of how well the state spends money. There are many people in the world who, for good reasons, neither trust their government to spend the money well, nor feel they have any realistic chance at improving the problems in their government. Government money is often a big target for corruption, and just as malware tends to get written for the software with the biggest market share, corruption tends to accumulate wherever the most money is.

breck 6y ago

I would also suggest donating only to non-profits that make everything they do as open/transparent/public domain as possible. In my limited experience there seems to be a correlation between an organization's productivity in solving their existential problem and how open the org is. The more secretive the organization (and the less public domain content it produces) the more likely it spends a significant amount of its resource on fundraising and cushy salaries for its management. Allen Institute, Wikimedia, Internet Archive, are examples where $1 in inputs leads to $100 in public domain output.

londons_explore 6y ago
Wikimedia used to produce an amazing amount of value with only a tiny budget. Lately it's budget has gone up by a factor of 100x, and its usefulness/impact has stayed pretty much the same. Either is was amazing value for money before, or it's a waste of money now. Or both.
- breck 6y ago
  > Either is was amazing value for money before, or it's a waste of money now. Or both. Maybe it's a sin wave? I find it more valuable than ever, but would agree that it's rate of improvement seems to be constant or declining. If they payoff their technical debt, and move to better DSLs, they could kick things into high gear again.
splitrocket 6y ago
In the US, you can look up every single non-profit's finances. The 990 form has almost everything you would want, though, not line-item level of detail. https://www.irs.gov/charities-non-profits/tax-exempt-organization-search https://www.irs.gov/charities-non-profits/tax-exempt-organiz...
umvi 6y ago
Wikimedia? last time they were on HN there was a discussion about how only a tiny fraction of their donations go to Wikipedia and the rest is used for other pet projects most people wouldn't necessarily care about. I think the conclusion was that wikimedia exists to grow bigger and ask for more donations not necessarily to be good stewards of said donations. Otherwise wouldn't they be trying to create an endowment that keeps the lights perpetually on at Wikipedia without Jimmy needing to beg every year?

splitrocket 6y ago

100% this. SO much of what is considered "non-profit dysfunction" is a direct result of funders restricting donation utilization. Only X% for opex, y% for capex, z% for comms, where x+y+z == around 5% of funds donated. Can't run an organization like that well.

tims33 6y ago

Kudos to MacKenzie Scott for helping bring this issue to light with her massive unrestricted giving.

NelsonMinar 6y ago
She really is an inspiration. Here's her announcement of the gifts and a list of the organizations. https://mackenzie-scott.medium.com/384-ways-to-help-45d0b9ac6ad8 https://mackenzie-scott.medium.com/384-ways-to-help-45d0b9ac...

amelius 6y ago

I stopped donating (with a few exceptions) because of the general lack of transparency in where your money really goes, and the stories of fraud, absurd salaries of CEOs/management and cold-calling which turns out to be so expensive that the first 1 or 2 years you are effectively paying for the call center. Etc. etc.

cldellow 6y ago
My wife and I have given reasonably large donations to various groups and told them we're not interested in getting push communication from them. We'll donate again if and when we can. The orgs that don't respect that (Medecins sans Frontieres comes to mind--multiple glossy mailings per year) get removed from the list. It's kind of harsh, but there are plenty of deserving orgs to support who are compatible with this stance. I understand why, in general, such outreach makes sense, but in my specific case, I find it annoying and it doesn't motivate me. I've found the Against Malaria Foundation to be stellar in this regard. They were very responsive in getting set up to accept Canadian stock when I inquired about it. They did one unexpected followup communication, but it wasn't a solicitation. Instead, they were considering changing how stock donation would work in Canada in order to minimize their fees, and wanted feedback on whether it would be a good or bad change from the perspective of a donor. They were explicit that the feedback was optional, and that they weren't soliciting a donation, just effectively doing market research.
Kevin_S 6y ago
You should examine the nonprofit's Form 990 if you have concerns or look at their page on Guidestar.

bradleyjg 6y ago

As a corollary if you feel like you want to make a restricted donation to a particular organization, don’t donate to that organization. Find one that’s better aligned with your values.

yboris 6y ago
Better yet, re-align your values towards "help as many individuals as much as possible with the limited funds available". It's often the case that there are more cost-effective ways of helping people. Preventing people from getting malaria costs very little - so much cheaper than trying to cure a single individual from cancer (for example). Suffering is suffering, and it shouldn't matter whether it happens in your country or another. Help as many as you can by being cost-effective (see GiveWell for research).

purple_ferret 6y ago

I work at a non-profit, and, anecdotally, I think it is more complicated as there might be 3 areas of funding concentration: 1. Areas that are overfunded because restricted donations tend to concentrate there. 2. Areas that leadership want to fund, and would direct unrestricted donations to. 3. Areas that neither restricted donations nor leadership want to fund and thus tend to be chronically underfunded (e.g. payroll and staffing in certain departments) I think thoughtful restricted donations have a place then, but a key is understanding of the industry and transparency in operations

temp8964 6y ago

The article mentioned the Gates foundation which has terrible records in education initiatives: - The big failure in small schools initiative: https://marginalrevolution.com/marginalrevolution/2010/09/the-small-schools-myth.html https://marginalrevolution.com/marginalrevolution/2010/09/th... - The big failure in teacher evaluation initiative: https://www.businessinsider.com/bill-melinda-gates-foundation-education-initiative-failure-2018-6 https://www.businessinsider.com/bill-melinda-gates-foundatio... - The big failure in Common Core initiative: https://www.washingtonpost.com/news/answer-sheet/wp/2016/06/02/gates-foundation-chief-admits-common-core-mistakes/ https://www.washingtonpost.com/news/answer-sheet/wp/2016/06/... Now it is funding anti-racist math: https://equitablemath.org/ https://equitablemath.org/

JoeAltmaier 6y ago
Interestingly, its still their money, and still their choice where to use it.
- temp8964 6y ago
  Yes. Even when they are probably doing more harm than good.
  - JoeAltmaier 6y ago
    We learn. That's not harm.
    - pfortuny 6y ago
      At the expense of others. That is.
      - JoeAltmaier 6y ago
        Not so much? Hard to do worse than we already are :)
- ramraj07 6y ago

sneak 6y ago

This highlights an issue that the article doesn't touch: how to choose trustworthy donation targets? It implies you should not to trust places with your money if you don't trust them to allocate it, which is correct, but how to know who to trust? I generally stick near-exclusively to GiveWell as a result. https://www.givewell.org/ https://www.givewell.org/ Each year they use a small fixed percentage of donations to research the most human benefit per dollar spent, and then use the remainder on that one single thing, maximizing the positive impact per dollar. The only thing the donor needs to know is that they have it handled. Any money you give them will go 100% to the thing they have determined is maximum impact that year. (One year recently it was mosquito netting, to prevent malaria, if I recall correctly.) This might sound like an ad but I'm not affiliated in any way, just a happy donor who is glad they exist.

yboris 6y ago
I second this. I've been giving to GiveWell's top-recommended charities for about 10 years now (10% of my income - see Giving What We Can). Please give your money to charities that are cost-effective - ones that have research-proven ways of helping others (and thus help the most per dollar given). Rather than doing your own research, it's worth trusting GiveWell (with their 10+ years of focus on finding the most cost-effective charities).

no_wizard 6y ago

And yet a constant theme I keep hearing on HN and other places is that “I would only donate if I could support X initiative at Y foundation” Mozilla comes to mind here. People often claiming they would donate if they could support only specific parts of the organization. This article shows there is much more nuance to think about here than just supporting a specific part of an organization

autarch 6y ago
> People often claiming they would donate if they could support only specific parts of the organization. I think this may simply reflect lack of faith in Mozilla as a nonprofit. People don't trust them to use an unrestricted donation in a way that they think is good.
marcinzm 6y ago
With Mozilla it's more that there is no way to donate money in a way where any of it will ever help the initiative (Firefox) you care about. Mozilla the foundation does not work on Firefox, Mozilla the corporation works on Firefox. Money flows from corp to foundation, not the other way around. So it's more of an issue of there being no non-profit that supports Firefox development. Or another way of saying it is that people don't like the current Mozilla mission statement and if it were different then they'd donate.

soneca 6y ago

Oh, it’s good to be back enjoying a PG essay! :) Even if it is just a short message rather than a grandiose statement (maybe that’s the reason I like it). I worked with nonprofits (and philanthropy advice in particular) for a long time and this is a great message to send. I don’t think it will change things much, as I don’t think PG has as much influence in the nonprofit world as he has in the startups world, but worth the shot.

deleted 6y ago

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Bostonian 6y ago

Here is an essay showing how women's higher education in the U.S. was boosted by restricted donations to universities: https://www.jamesgmartin.center/2021/02/feminist-college-funders-and-the-problem-of-donor-intent/ https://www.jamesgmartin.center/2021/02/feminist-college-fun... .

robocat 6y ago
Nice counter-example from 1890 from article (condensed and paraphrased by me): Johns Hopkins University wanted a medical school. It could not afford it, but had said they needed $500k. Garrett, a lesbian, collaborated with her partner, M. Carey Thomas, and they successfully raised $100k and offered it to Hopkins on the condition that the medical school admit women “under the same terms as men.” Hopkins’ trustees accepted the gift and the conditions the donors imposed and said they would invest the money until the rest of the $500k was sourced. Hopkins president Daniel Coit Gilman then frantically tried to return the money. Although he never explicitly said so, Johnson suspects that was because he wanted the medical school to only admit men. “You do not realize Mr. Gilman’s grim determination,” Thomas wrote to Garrett, “it is with him a death struggle & money means nothing to him.” In December 1892, Garrett made a second offer. She noted the fund given in 1890 had risen to $200k, and said she would donate the remaining $300k, provided the school would admit women on the same terms as men. In 1893, the Hopkins trustees caved and accepted Garrett’s donation unconditionally. The Johns Hopkins medical school became a national model.

JoeAltmaier 6y ago

I like to donate when I know a person involved. I find it hard to trust an organization or title. I donate cash to the local food bank, which is run by neighbors. I donate to my son's college student organization, run by folks he knows. I donate to a guy I see on the street frequently, who has been camping since he became homeless in 1985.

yboris 6y ago
It's wonderful that you're already donating non-trivial amounts. Would you have more trust if an independent charity evaluator spent over a decade vetting charities - picking only ones transparent enough that can be scrutinized, and then choosing only the most cost-effective? See GiveWell for their research. When giving internationally, you can multiply the positive impact a thousand-fold (because it's much more expensive to help anyone in the richest country in the world).
- JoeAltmaier 6y ago
  I'm sure others are doing that. For my part, I take care of my neighbors. Because if we are never careful to do that, then it may never happen at all.

gist 6y ago

> If restricted donations do less good than unrestricted ones, why do donors so often make them? Partly because doing good isn't donors' only motive. They often have other motives as well — to make a mark, or to generate good publicity Bottom line is this: It's a net loss for non-profits if there is a stigma that is attached to people who donate for in part 'the wrong reasons'.

mengledowl 6y ago

"If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all." Years ago, I had a startup that was building software for non-profits. We spent a lot of time around them, talking to them, etc. This problem of incompetence that PG briefly touches on is rampant to a degree that most would never realize. Most large NPs are more inefficient than you could possibly imagine with their money (if you don't believe me, go look at how much of their money goes to administration and how much the people at the top are paying themselves). The SMB NPs (the group my startup served) were typically run either by narcissists who's real goal was to look good to other people, or they were very non-business/money savvy and driven by passion (in a negative way). Both of these lead to poor decision making, one way or the other. The narcissists tended to do everything they could to look good while doing almost nothing (think: hosting galas to raise "awareness" or finding ways to be involved with big important people, without actually furthering their mission). They looked great in the public eye most of the time and could flaunt their "goodness" while secretly treating their employees like trash behind closed doors. Example: the director/founder of one NP I know of that had a mission of helping pregnant women in crisis forced her 8 months pregnant employee to walk for miles through DC and do manual labor for her. She chewed her out in front of the whole team for saying she wasn't physically capable and made her cry, demanding that she do something that was technically her (the director's) responsibility. The non-business/money savvy person who is driven by passion at least has good intentions, but they let that passion run wild without tempering it. This leads to knee-jerk reactions and doing things just to do them, without taking the time to play the long game or even determine if the action they're taking is helping or hurting. It's the classic "give a man a fish vs. teach a man to fish" problem, where they don't slow down to look closer, and so find themselves perpetually addressing the crisis instead of the underlying issue, or creating sustainable solutions. The NPs that manage to avoid these are so exceedingly rare in my experience that it has turned me into a cynic. I just assume that there's incompetence at play, and even outright abuse. Anyway, I agree with PG, I just had to expand on that point because it almost felt like a footnote when IMO it is a huge part of the problem: finding good NPs to donate to unrestricted. Otherwise, you have to settle for incompetence and restrict that incompetence.

macintux 6y ago

autarch 6y ago

Having spent many years volunteering for various nonprofit, and having been deeply involved in fundraising and budgeting, I cannot upvote this enough! Restricted donations add overhead while making it harder to fund important things like bookkeeping, rent for an office, and staff salaries. If you believe in the nonprofit's mission, just let them figure out what to do with the money!

quercusa 6y ago
On the same note, you are better off making a few large donations instead of spreading a bunch of small ones around that get eaten up by overhead.

buss 6y ago

As a board member of two nonprofits, I STRONGLY agree with pg. Restricted donations are not only an administerial headache, they strain the donor/recipient relationship and lead to suboptimal spending.

latchkey 6y ago

This article touches on non-profits, but I feel it comes from a deeper well. We are wired in our culture around how we give donations. We only give money to people who we think would spend it most wisely. We walk past all the people in San Francisco on the street because we know that if we give them money it will only go to more drug use. We drive past the person on the left turn lane because we don't want to encourage him to be there. When I spent 2 years traveling by motorbike all over Vietnam, Cambodia and Laos, I saw first hand what donations do from birth... little kids in the middle of nowhere would run up to me and say hey DOLLAR, give me DOLLAR. They were trained for that.

danans 6y ago
> little kids in the middle of nowhere would run up to me and say hey DOLLAR, give me DOLLAR. They were trained for that. And why not? It seems like rational behavior on the part of the kids/families given their circumstances and their incentive systems.
- latchkey 6y ago
  My point is that some other foreigner drove past them before me and gave them money. Just like the person sitting on the left turn lane learned it from somewhere. I wasn't arguing that the behavior is rational or not. I'm talking about how we are wired in our culture around giving donations and it isn't just about how donors dictate how non-profits spend their money.
geofft 6y ago
I mean, the real problem with Vietnam, Cambodia, and Laos is the illegal war the US fought there to maintain the value of the dollar. Charitable donations are by definition a response to a failure of society in one way or another (regardless of whether your political views consider it a failure of the market, a failure of government, or some of both). Even in the ideal case, they exist because some problem is so bad that someone feels morally compelled to give their spare money to try to solve it. We donate to provide water to certain places in Africa (or Michigan) because there isn't reliable infrastructure there, but we don't need to donate to provide water to San Francisco. We donate to specific medical research goals because the funding system for medical research (again, whether it's government-backed or market-backed) isn't investing in some problem, and we think throwing a bit of money at it might cause us to happen on a cure, and at the same time we complain about how other medical costs for different problems are out of control. We donate to legal activism nonprofits because, bluntly, we believe our justice system will fail to be just without that intervention. We donate to Mozilla because there's no money to be made in selling web browsers thanks to the various vertically-integrated competitors but we think independent web browsers are still valuable. And the Gates Foundation donates to Vietnam, Cambodia, and Laos because the kids there quite frankly will never grow up to be Bill Gates without rebuilding some infrastructure first. (Or, of course, charitable donations are PR - a way for the Andrew Carnegies of the world to deflect questions about whether they've quietly caused more failures of society than they're currently loudly fixing.) The reason that your town needs a food bank is that there are people in your town who can't just afford food and need to rely on the whims of people who believe in private charity in order to not starve to death. Running the food bank is great, and I'm glad that there are people with those whims, but making it so that nobody in your town has that problem would be even better. It doesn't matter if your answer is "more taxes to support welfare" or "more teaching people to fish," either of them is more sustainable. I'm not saying we shouldn't donate to worthy causes. I do, quite a bit, and I think those of us who make tech-industry salaries do in fact have a moral obligation to do that for as long as these failures of society exist. But let's admit that it's a second-class approach. Donations cannot solve problems. They can at best soothe the effects of a problem. There isn't really any fundamental difference between the guy with a sign on 101 asking for a dollar every day, the kid in Vietnam asking for a dollar every day, and the New York Public Library emailing me to ask for many dollars every day. Or, ultimately, even the beloved local for-profit business with a Kickstarter to save them from shutdown asking for a (hopefully) one-time pile of cash to make rent. All of them feel like their best shot is to hope for donations. Let's figure out where they should be getting funds from instead.

gist 6y ago

> Many donors may simply never have considered the distinction between restricted and unrestricted donations. They may believe that donating money for some specific purpose is just how donation works. And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors. In other words they smartly are thinking they don't want to kill 'the sale'. When businesses sell products do they typically list all the potential downsides or defects in their product or service when doing so might discourage the purchase? Maybe as I said in my other comment they realize that less money would come in because they would rain on a parade going on in someone's mind. Example let's say someone wants for vanity purposes (an entirely valid reason) to have a building named after them. The non profit (could be a school or some research institution) then says to them 'well you know we can do that but why don't we put the money toward this cause instead after all why does it have to be about you and your family name being perpetuated!!!?'. That's an exaggeration sure (in terms of how the words would go. However principle is that the person donating would then have a negative ie 'the wrong reasons' attached to what they were convincing themselves was a selfless act.

rossdavidh 6y ago

I worked in Accounting (the dept that did it, not the one that taught it) IT at a major public university for several years. Something like half of the software complexity was in keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on. Whether the source was the federal government, the state, corporate donors, or wealthy individuals, they all had strong opinions on what the money could be spent on. It was much easier to get money donated for a new building, than to maintain an old one, so you can have a situation in which new buildings are being built while old ones fall apart. The most surprising thing to me was how small a percentage of the budget was under the control of the president of the university; it was only a tiny amount. Virtually all of the money was controlled by the source, not by the administration.

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jasode 6y ago
>complexity was in keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on. [...] they all had strong opinions on what the money could be spent on. Understand your frustration but the public was outraged when $1 million of a librarian's donation was used for a football scoreboard.[1] Yes, the university did comply to the exact letter of his will (only $100k was restricted for library and the rest was unrestricted) ... but the public thinks the spirit of his donation was ignored. [1] https://www.google.com/search?q=librarian+donation+used+for+football+scoreboard https://www.google.com/search?q=librarian+donation+used+for+...
- xirbeosbwo1234 6y ago
  The problem with that is, in part, that they ignored the spirit of the donation, but also that the proper amount for a university to spend on a scoreboard is twelve dollars and thirty-seven cents. OK, that's a bit unrealistic. I could build them one for a few hundred, though, and they could pay a student $50 to flip over the numbers during the game.

amznbyebyebye 6y ago

Why does he write like an SAT reading comprehension passage

bmn__ 6y ago
It's called an essay, my good man.

kevmo 6y ago

This is why billionaire philanthropy is such a scam. It's just a tax-free way for oligarch to create societal infrastructure that further entrenches their hegemony.

danans 6y ago

Notably, certain types of organizations (i.e. CA public school PTAs) only accept unrestricted donations for some of these reasons.

jmkd 6y ago

Am mid-founding a startup which will give 5% of its profits to charity from day 1. Customers won't have a choice about this - either the amount or the charities chosen - so this will be intrinsic to doing business with us. Trade with us if you like that, don't if you don't. Will be on a tiny scale compared to the donations PG refers to, but customers (who are donating indirectly) will have to trust us, while we trust the charities we give to. There's no meddling or options to choose from, by design, for the same reasons PG describes.

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JackC 6y ago

"And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors." Nonprofits can be realistic about this without being cynical about it. I worked with a very good nonprofit that had the fundraising mantra "don't give until it hurts, give until it feels good." As in, recognize that donors give because giving makes them feel better about themselves and the world they live in, and that's OK and something to encourage -- you just have to connect it to the mission. That means, yeah, you have to take restricted funds and do benefit dinners and other partially-wasteful stuff, and you have to emphasize the photogenic parts of your work more than others. But more importantly, you have to clearly tell the story about your theory of change to your donors, so you're attracting the right donors and educating them to support your mission. They're the "right" donors because the more they learn about how and why you're spending their money, the better they feel about themselves and the world. That sets up a virtuous cycle where you're adequately funded and you're incentivized to do better at your actual mission so you have more to share back. If you get _that_ wrong, and your donors feel good about their donations for fundamentally different reasons than what you're actually spending them for, that's when you end up with funding undercutting the mission.

jariel 6y ago

The third restriction is 'purpose gifts' i.e. build a stadium and put my name on it, which seems entirely fair to me.

donate12301923 6y ago

So, let's unwrap this. You make some money. Which is taxed in various ways. The pie gets bigger, the state (and the People) are getting a cut. Then you are told you should do more. And you also think, well, why not help the world? Then you are told: but don't waste your time volunteering at a shelter -- better work and donate your money instead. OK, so you don't get the satisfaction of seeing the humans you help but you know that at least your donation helps, maybe, the same humans you want. A restricted donation gives you some agency into improving the world. You are still abstracted away, you don't really see the humans you are supposedly helping, but at least the money only goes into improving the world into some dimension that needs improving and that you consider relevant. But no, what you must do is just donate unrestricted. That is, have no agency, have no interaction with actual humans in need, be just a wallet that helps, maybe, something as defined by the entity that receives the money. Your only choice is who spends it and how much to give them. At this point, how about we bring this to the logical conclusion that THERE SHOULD BE NO NONPROFITS. Clearly, if those with the already taxed money can't have an opinion, why should those nonprofits know what's what? You know who could spend the money: the State! So, abolish non-profits, and make the State as the sole decider of how things get spent. Then you can donate unrestricted to the State or just push for some taxes being raised.

macintux 6y ago
> but don't waste your time volunteering at a shelter -- better work and donate your money instead. Bad advice. Volunteering is vital. I'm not sure why anyone would argue otherwise.

chabad360 6y ago

A way of dealing with this issue that I've seen in the jewish community (I only have extensive experience there), is to provide sponsorship opportunities: a way for the donor to restrict the usage of their money and a way for the organization to get it where it's needed. While it doesn't cover everything, it can really help reduce the requirement for having donations that can be used for anything.

ralmidani 6y ago

Over the years my opinion of non-profits has become less, shall we say, “charitable”; society has a tendency to glorify non-profits because they “don’t have shareholders” but, in reality, a lot of non-profits give peanuts to those at the bottom (with some even working for free) while executives get far more than a living salary. And whether you’re an educational institution, an insurance provider, or an NGO, being an executive comes with lots of perks like travel, entertainment, lavish offices, etc. So while “no shareholders” is often a selling point for supporting a non-profit, there are still people getting an oversized benefit out of non-profits, who in some disturbing cases are the founders and their family members. If I wanted to donate a large amount of money to a non-profit, I would structure it as a zero-interest loan, and would just keep deferring the repayment of the loan as long as the org stays true to its mission, compensates executives in reasonable proportion to regular employees, etc. Brian Acton (who co-founded WhatsApp, and later left Facebook) is supporting the Signal Foundation with tens of millions in deferrable, interest-free loans. I think it’s absolutely genius, and wish more people would follow his example.

stephen_greet 6y ago
I think that's a really interesting middle ground. Do you think it can fall into the same trap as mentioned in the article, where it can become "sub-optimal" due to not being as expert as the non-profit?
- ralmidani 6y ago
  I think it’s less prone to that problem if you take a holistic approach when evaluating whether a loan should be repaid, rather than applying very narrow criteria such as “must be spent on a new building”.
- lazyasciiart 6y ago
  It's exactly the problem in the article, taken to a ludicrous extreme. If you want to be able to decide how a nonprofit should spend their money, go take a seat on the board (or staff).
elcomet 6y ago

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mcguire 6y ago

Wow. A Paul Graham essay I completely agree with. Will wonders never cease? :-)

dougb5 6y ago

Not so long ago the author warned that non-profits are a "magnet for sociopaths" because "their defining feature is to make no profit" and there's "no intrinsic accountability". (https://twitter.com/paulg/status/1124254508232663040?lang=en https://twitter.com/paulg/status/1124254508232663040?lang=en). I thought this was an odious and wrong thing to say for many reasons and it made me think that while he clearly has a lot of experience with non-profits of a certain kind or scale or connection to tech VC, maybe it's not so broad-based. And it's hard for me to square this attitude with this new blog post: If there's no intrinsic accountability, then how do unrestricted gifts help? Shouldn't gifts provide some of that accountability? The best interpretation I can come up with is "Apply very strict conditions to where you decide to donate, but when you do, do it unconditionally".

kjjjjjjjjjjjjjj 6y ago

I strongly disagree with this. If I were donating a large sum to a non-profit that helps poor children, I would absolutely earmark it with a stipulation that it must be used to help poor children who grew up as I did (poor, no opportunities for other aid/scholarships because, well we all know why). In any nonprofit or mentorship situation, I always make sure to reach the children who grew up like me because they truly have no means of assistance.

santoshalper 6y ago
From the outside, it really looks like it's more about you than it is about helping anyone else.
- remote_phone 6y ago
  But the end recipients are getting the money, so who cares?
  - randomsearch 6y ago
    Because the charity knows how best to spend it, not you (as explained in the essay).
    - kjjjjjjjjjjjjjj 6y ago
      They don't though, they just think they do. Their goals are largely motivated by current politics.
      - jayzalowitz 6y ago
        I would agree with this. In my youth experience as well, politics in relation to non profits determined if you were housed/fed.
  - lazyasciiart 6y ago
    Are they? Or is it sitting there in an account labelled "children named Tom who live in a town of between 10,000 and 11,000 people and got a C in math in 2003"?

neilv 6y ago

> Usually the way the donor wants the money spent is not the way the nonprofit would have chosen. [...] If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all. The situation might not be "understand", but "choose". The donor's interests in donating might not be 100% aligned with the effective mission of the charity. For one example, I imagine the donor might have a particular problem they want addressed, and that overlaps incompletely with the activity of the charity, but the charity otherwise seems the best vehicle for addressing that particular problem. For a less admirable example (but still perhaps beneficial to society), I imagine a donation might have PR or social status value for the donor, and a donation for a particular cause/effort sounds better than some of the less-fashionable work of the nonprofit. Or the donor might want the PR/status of their name on a center, and want to make sure that the center has funds to keep paying PR/status dividends.

dantheman 6y ago

Restricted donations can keep the nonprofit from changing is focus. For instance, the ACLU is wavering in it's defense of free speech - if I were to give money to them, it wiuld have to be structured to support the defense of all speech regardless of content.

satya71 6y ago

Agree 100%. I wrote a short essay [1] about the problem why charitable donations cannot achieve the intended effect. [1] https://snmishra.wordpress.com/2016/03/11/why-tax-deduction-for-charitable-contributions-is-bad/ https://snmishra.wordpress.com/2016/03/11/why-tax-deduction-...

mattr47 6y ago

I help direct about $2.4 million each year to various parts of the world. We often receive inquiries about donating to a specific need or geographic location and we tell them no thank you. If people believe in our mission and leadership, then they give without any qualifications to what it shall be used for. We provide accurate records, and reports of what the money goes to.

codecutter 6y ago
As a donor, I would appreciate that. It will help me decide whether to give money to charity A vs. charity B. There will always be someone willing to accept the donation. PS: AFAIK, Religious institutions in USA are exempt from Form-990 so a donor wouldn't anyway know where the money is going.

Black101 6y ago

Most people let companies donate with their money... i.e.: Mcdonald boxes at the cash register...

Ericson2314 6y ago

Wow, P.G. almost gets it. The most unrestricted donation is paying your damn taxes. Get rid of the philanthropy loophole, raise the taxes, and lets invest our surplus democratically.

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rdiddly 6y ago

The one restriction I insist on is that they leave me off their mailing list! I get it, the odds are good that a previous donor will donate again, but especially for small donations it ends up feeling like all I accomplished was to purchase a bunch of spam & kill some trees!

ALittleLight 6y ago

"Unfortunately restricted donations tend to generate more publicity than unrestricted ones. "X donates money to build a school in Africa" is not only more interesting than "X donates money to Y nonprofit to spend as Y chooses," but also focuses more attention on X." Seems like you could arrange the donation, get the charity to tell you what it would be for, and then use that as the announcement. You might get less attention getting descriptions, but I feel like it would still be net-moral to get a little creative with how you described it.

l2silver 6y ago

I recently helped to found DigLit.ca, and non profit that helps build technology for other nonprofits. What we've found when dealing with nonprofits is that a lot of the smaller organizations are, suprise suprise, struggling to survive. They're trying to carryout their general missions, but unless they have some kind of consistent funding model, a lot of their energy is turned towards keeping the organization alive. I don't think there's anything wrong with that, it's just the nature of the nonprofit game. But our organization acts a bit like a technology donor, and we've definitely had to restrict the nature of our services to mission facing purposes. Aside from the technical challenges of contributing to the survival of an organization, we've also found that developers want to help with problems directly.

MattGaiser 6y ago
I once had an interview where one of the questions asked was whether I was on working on non-consumer facing products. They apparently had past hires be angry about doing so.

DC1350 6y ago

This assumes that the nonprofit has the same goals as the donor so it’s not always true. Maybe that would be covered by the umbrella organization bit, but sometimes there’s no organization that cares so donors need to leverage existing ones to fund what they want.

temuze 6y ago

Also important: donate regularly. Ad-hoc donations make it difficult for a nonprofit to plan their budget. It forces them to spend a lot of that money to solicit more donations. My friend made a tool to donate anonymously and regularly to non-profits: https://sublimefund.org/ https://sublimefund.org/ Less spam, better for the non-profits. It's a good combination.

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selfishgene 6y ago

Would nudging tax rates a little higher on the highest income brackets and Congress taking steps to close the many tax loopholes that companies exploit to avoid paying their fair share of corporate taxes in this country not also help fix this vexing problem? As usual, the question boils down to whether or not you prefer monopolists like Bill Gates who "beat the charges" back in 2002 or polluters like the Koch brothers deciding what "good work" gets done ... or the brilliant intellectuals that we elect to Congress like this beauty: https://www.thenation.com/article/archive/aoc-republicans-lies-climate/ https://www.thenation.com/article/archive/aoc-republicans-li... Tough choices for sure.

davidgerard 6y ago

This is basically correct. Restricted donations are a goddamn pain in the ass. If you trust a charity is doing stuff you like, just trust them to spend the money doing stuff you like.

IG_Semmelweiss 6y ago

the nassim taleb heuristic here comes in handy: When solicited for charity funding on the literal street, usually by a young person, he always asks the that young person "are they paying you to work here?" If yes, he won't donate. The simple logic is, if the charity's mission is strong enough, someone will volunteer his/her own time to solicit donations. Being paid to stand there is a signal (a filter) that the cause is not strong enough. Therefore, you pass.

chmod600 6y ago

Can't a non-profit say something like: "Of course we can restrict your donation to X. But we're also happy to listen to what's most important to you and work yith you to develop a plan based on our expertise, and how ot fits into a larger story." The hidden mesaage in there is not just "we know best" but also, "we can help you with the PR story or legacy or whatever you want".