The point is that the money can be used only once, so your money gets 88% of its value. A lender uses the money more than once, so they can provide more value from a donation.
Often money earned, lent or given to the least well to do has the highest velocity in changing hands, resulting in much more positive economic impact than if the money were given to people who were better off.
Then the 40% of inefficiency may turn our to be not as bad.