How should a large donor prioritize cause areas?

Abstract

The article considers whether a philanthropic grantmaking foundation, particularly one with a large budget, should distribute its donations across many causes or focus on a small number of them. It argues that due to diminishing utility of money, concentrating resources on the most effective causes might look like a good idea; however, this is likely not the case, as even the most promising causes are unlikely to have such rapidly diminishing marginal returns. The article also argues that other possible reasons to diversify grants across many causes are nonsensical, unpersuasive, or can be dealt with in a better way. Thus, large foundations should prioritize a small set of causes that they believe are most effective, either by prioritizing causes that are clearly more effective, or by empirically determining the point of diminishing marginal returns for each cause. – AI-generated abstract.