While I get this argument, it does leave out some details that might not make the value calculation as cut and dry. One, sure, your particular charity might be

While I get this argument, it does leave out some details that might not make the value calculation as cut and dry. One, sure, your particular charity might be able to spend more on actual charity by increasing marketing, but what is the opportunity cost? If there is a person who donates $100 after you spend $60 convincing them to donate to you, it might seem like that is a good use of the $60... you have $40 extra! As a business, that calculation is certainly correct. But as a charity, you have to think about what the donor would have done otherwise... maybe your $60 in marketing actually just caused the person to switch their $100 donation from some other charity to yours. Now instead of charity B getting $100, charity A only gets $40 after expenses. Even worse, you can start an arms race. Now charity B has to spend marketing money to try to win back the donor who switched their donation to charity A, and now they spend $70 to get them to switch back (still worth it from charity B’s perspective, $30 in gain)... now we have two charities spending $130 for $100 in donations. There is always an opportunity cost.