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Comment by gertef | Hacker News Reader

The most important problem with advertising is that it is competive waste:

If firms A and B can create a product a cost $X that sells for $X+$Y firm B can create the same product for $X, then A and B will waste $Y on advertising in an attempt to win consumers for each other, for no benefit to anyone (except in any artistic/entertainment value in the advertising, and the possibly useful wealth-redistribution from firm's owners to advertising employees).

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I remember reading an article on marginal revolution about how wasteful are charities: The paying customers are scarce and the competition is so fierce that a big sum of the money you donate goes on advertising to gain new donors. In the worst cases most of the money goes into that ...

This is definitely a huge problem, especially with socially-competitive charities. Things like breast cancer awareness and helping the local needy around Christmas are so popular that they're locked into ugly advertising struggles. And if people don't do their homework, the most efficient fundraiser will be the charity that spends no money on the cause (or just enough to stay exempt).

This seems like a good time to plug Givewelll. Their entire goal is quantifying the good done by charities and promoting the most efficient. They compare globally, but even if you want to give to something specific like animal welfare or local homelessness, they have some good efficiency tips.

http://www.givewell.org/

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