Giving your all: The math on the back of the envelope

Abstract

The author argues that individuals should concentrate their charitable giving on a single cause rather than diversifying their donations across multiple charities. This argument is based on the idea that individuals who truly care about the recipients of their donations will prioritize the cause they believe is most worthy. Diversification, the author argues, often stems from a desire to feel good about giving rather than a genuine concern for the recipients’ well-being. A thought experiment is presented to illustrate this point: if an individual plans to donate to both CARE and the American Cancer Society, their decision to donate to CARE first should not be altered by the knowledge that another individual is also donating to CARE. The author also employs a mathematical approach to demonstrate that concentrating donations on a single cause is the most efficient way to maximize the impact of charitable giving, especially when the donations are small relative to the size of the cause. – AI-generated abstract