Marginal charity

Abstract

People often ask: where can I get the best bang for my buck in charity? The above diagram shows where. We make many choices, both as individuals and as organizations; we choose prices, qualities, locations, etc. We often make such choices to maximize some sort of private gain, shown in red. Such private choices also usually have effects on the gain of the rest of the world, shown in black. In general the social gain curve peaks at a different point than the private gain curve, because there are usually many market failures associated with our choices. (As the absolute curve heights are irrelevant, I’ve arbitrarily let them intersect where private gain peaks.)