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paulgraham.com

289 pointsrazin284 comments

I worked in Accounting (the dept that did it, not the one that taught it) IT at a major public university for several years. Something like half of the software complexity was in keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on. Whether the source was the federal government, the state, corporate donors, or wealthy individuals, they all had strong opinions on what the money could be spent on. It was much easier to get money donated for a new building, than to maintain an old one, so you can have a situation in which new buildings are being built while old ones fall apart.

The most surprising thing to me was how small a percentage of the budget was under the control of the president of the university; it was only a tiny amount. Virtually all of the money was controlled by the source, not by the administration.

>complexity was in keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on. [...] they all had strong opinions on what the money could be spent on.

Understand your frustration but the public was outraged when $1 million of a librarian's donation was used for a football scoreboard.[1]

Yes, the university did comply to the exact letter of his will (only $100k was restricted for library and the rest was unrestricted) ... but the public thinks the spirit of his donation was ignored.

[1] https://www.google.com/search?q=librarian+donation+used+for+...

Universities are literally the sole specific institutional exception in the essay:

> There are a couple exceptions to this principle. One is when the nonprofit is an umbrella organization. It's reasonable to make a restricted donation to a university, for example, because a university is only nominally a single nonprofit.

The article doesn't say what to do when donating to a university or college. So, when donating to a university, do also donate in a relatively unrestricted way. But donate to:

1. a department (in small amounts),

2. a scholarship fund (in medium amounts),

3. an endowed professorship for a specific department/discipline (in large amounts), or

4. some important component of the physical plant (in "Gates/Allen" amounts).

Not to the university as a whole.

At least that's what I've witness as being effective.

Oh, and if you donate to scholarships, make sure the university/college plays ball. If they won't at least match 4% of the principle, just set up the scholarship an independent thing and let the kid choose where they go. Why donate a student scholarship to a specific school whose value is literally just the sustainable withdrawal rate? What's the point of that? Certainly not to help a student. Your donation will turn into a chair on the deck to be rearranged. But lots of donors get suckered into doing this.

I mean, when funds are unrestricted, they "should" become fungible; so, when I give unrestricted donations I also make it clear that I don't want them to try to tell me "we used your money to do X"... that way, I can look at anything I want on campus that was improved and think "I did that :)". If the university is spending money on bullshit, then probably they just don't deserve donations at all :/.

Every large org spends at least some money on bullshit, usually amounts that would shock the typical person.

It's just one of the many inescapable inefficiencies that happen when humans try to create a large organization.

True, but that doesn’t make it acceptable.

The problem with that is, in part, that they ignored the spirit of the donation, but also that the proper amount for a university to spend on a scoreboard is twelve dollars and thirty-seven cents.

OK, that's a bit unrealistic. I could build them one for a few hundred, though, and they could pay a student $50 to flip over the numbers during the game.

The proper amount to spend is zero. There’s no reason for universities to be running minor league football teams with unpaid labor. On the contrary that’s the exact opposite of “charitable”.

I mean, a few hundred for a score board seems right. Even a few thousand for a piece of infrastructure that can be used 20+ years for several different sports is not so unreasonable. Even rural middle schools will sometimes spend that much on scoreboards.

In University I participated in a club sport "funded" exclusively through the student government -- really more of a tax rebate than anything else since only 60% of what the climbing "team" paid in student fees we got back to buy ropes, biners, rent a van for outings. That sort of stuff.

College sports do serve a real community-building purpose. Just... a few hundred or maybe low thousands total per sport instead of a few tens of millions for the main sport.

Definitely. One of my modest proposals that will never happen is that colleges go back to teaching, and football and basketball become more like baseball, where they have minor leagues as a way of getting players. The jumbling together of college and professional-in-all-but-name athletics is absurd, and egregious exploitation of "student" athletes to boot.

Fundamentally, you're correct. However, when working for a university, I was well aware that private sector donations (and maybe even state funds) went up or down depending on how well the football team did. A losing record for the football team ought not to result in lower private sector donations towards scientific research or scholarships at that university, but apparently at most universities it does. Universities that ignore this fact do so at their peril.

I don’t expect universities to spontaneously do the right thing. I’m hoping the courts force them to at least stop exploiting the pro athletes that make them so much money.

So there should be no sports at all at schools? What about other extra curricular activities? No band, no drama club, nothing but academics?

I get not wanting to have a minor league football team with unpaid labor, but even rec league basketball needs a scoreboard.

In other countries, things not tied directly to a university's educational mission are still available, but as local community organizations. There are drama clubs, sports clubs, but available to the entire community, not just college students.

There is no reason why the state should spend its educational subsidies on funding auxillary recreational activities solely for the benefit of university students when a good GPA is not necessary to recreate, nor do university students have a greater need of recreation than anyone else.

I think most countries have some form of student sports as part of universities, just not the kind of professional ones like in the U.S. students study better if they have something else in their lives.

The problem is that it is really hard to know where to draw the line and the US as usual takes it fully to the extreme.

All that being said, I thought the big sports were a revenue driver for the schools that chose to participate in the bigger leagues?

Intramural, sure, you can organize some soccer games between adjacent dorms as part of the responsibilities of the dorm admin, but in terms of paid programs, no.

See, they evaded a recurring cost!

> I could build them one for a few hundred

No, you couldn’t.

It has to keep working for years/decades, be maintainable, survive bad weather conditions, etc. even if you made the scoreboard out of wood and painted it, it would have to be large enough so that the stadium could see, the paint would fade and it would take weeks to make it, etc.

So rebuild it every time as necessary. It will take a long time to eat into $1MM

> The most surprising thing to me was how small a percentage of the budget was under the control of the president of the university; it was only a tiny amount. Virtually all of the money was controlled by the source, not by the administration.

I consider that good news, actually, because it makes restricted donations meaningful.

I always assumed that restricted donations were pointless, because if I donated $x of restricted donations to cause A, the organization would simply take $x of unrestricted donations that it was planning to spend on cause A and instead spend them on other causes. All of my money technically went to cause A, but de facto it didn't.

I still assume that's the case for regular, non-university charities.

If you expect that someone just wants to steal your money (and I am not saying such expectation is always wrong), perhaps you just shouldn't give them any.

On the other hand, if you trust that someone wants to do a good thing, they probably have more information about the topic than you do, so you should give them freedom to actually act on that information. Like, maybe you think "X is way more important than Y", but maybe the lack of Y is actually what prevents them from doing X efficiently, so your restriction to only use the money for X is not helpful, even from the X-maximizing perspective.

Like, sometimes your mission is to distribute food to starving kids in Africa, but you can't organize your volunteers until you buy a new computer, because the only one you had just broke. Then someone gives you a paycheck with big letters "only use to buy food, I don't want to see you wasting money on computers". Yeah, thanks a lot, dear condescending saint.

> If you expect that someone just wants to steal your money (and I am not saying such expectation is always wrong), perhaps you just shouldn't give them any.

This is indeed the approach I've been taking with some climate change charities: most of them have an "advocacy" component, and while I'd like to support effective emissions reduction projects, I'm not willing to contribute to the preaching for individual asceticism.

I have no issue giving to "some project + a proportionate share of central/overhead costs".

Unfortunately, it's often extremely hard to find a charity that is tax deductible where you live, part of employer matching programs, effective in running projects you want to support, and not performing activities you specifically don't want to support.

‘Advocacy’ is very broad. I hope you’re not discounting donating to places because you think it can only mean one thing!

The word itself isn't the problem, and in general I don't have an issue donating to organizations that also tackle the problem on a political level.

With climate change specifically, if I can't reasonably rule out the risk that the org will spend the money to tell me that I can't have an air conditioner, meat, or travel (or worse, lobby my government to ban me from having these things), they're not getting any money.

I'm OK with taking some risk that the org will use money in a way that I consider non-optimal, but I draw the line where I see a risk that the money may be used directly against my own interests. "Don't feed the mouth that bites you", I guess.

In particular, drawing on an example from OP, advocacy sometimes includes things like "doing the legwork to be part of employer matching programs".

Now all cases like this, many nonprofits have multiple independent projects

Like Mozilla foundation, which has a number of separate "initiatives"

Or Wikimedia, which partially works on Wikipedia.org website, but also works on a number of projects not directly related to the main website.

Exactly the two charities I was thinking of!

Sometimes there is only one charity that covers a certain topic so if they also do other things you don't want to support the only choices are to make a restricted donation or to not donate at all.

Of course, if the charity itself encourages you to choose, then it's perfectly okay.

This is true, unless there isn’t $x of unrestricted budget to move around.

Reminds me of the story about the Yale donor who wanted a cathedral, but Yale wanted a gym, so they built a gym that looked like a cathedral. https://www.gpsmycity.com/attractions/payne-whitney-gymnasiu...

Yup. They're really into the medieval aesthetic there -- the Hall of Graduate Studies was built in the 1930s IIRC, and they splashed the stone walls with acid and purposefully cracked some of the stained glass windows to make it all look that much more Oxbridge-y....

> It was much easier to get money donated for a new building, than to maintain an old one, so you can have a situation in which new buildings are being built while old ones fall apart.

That seems logical enough to me.

I mean, if every new building is an unprofitable drag on university finances, they wouldn't be building more of them. At the very least a building should pay for its own upkeep, if not its original construction costs.

And given that the fundraising department will surely want to tell rich donors that buildings are good for the university, simultaneously saying that the previous buildings were all bad for the university would be a very confusing message.

> if every new building is an unprofitable drag on university finances, they wouldn't be building more of them.

No, you then need a steady supply of new buildings to provide funding to fix the old ones/replace the old ones.

I'd love to hear insider stories about how misaligned fundraising department metrics can end up being for the university.

Regarding donating buildings in general, Andrew Carnegie seemed to get a lot of prestige leverage when he funded thousands of public libraries by paying for the buildings while requiring the locals to pay the upkeep and operation.

The problem is even worse than that: The desire for fiscal accountability within universities is so high, there is little room for trust.

My documentation and compliance burden was as high for a $5 purchase as a $5k purchase. My estimate of the salary cost (neglecting overhead) of approving a single purchase (my approval, electronic documentation, paper documentation, front-office approval, and PI oversight) was ~$80. That doesn't account for the impact of lost time on other tasks. For a $5 purchase.

The true accountability -- If I consistently spent money on something contrary to the aims of the lab? I'd be either out of a job or deprived of tools necessary to get the work done.

> keeping track of each dollar's origin, and making sure that it was spent on only what the source approved it to be spent on

Why not just keep a separate fund for each purpose and as these donations come in you route out the portions to the desired fund? If that is what's done then what's the difficult part that I'm missing?

Part of it was that each source wanted to be able to audit _their_ money, and have traceability. So in some sense it was just what you say, but that roughly doubles the amount of work done for accounting software. It also meant that most private-sector software was insufficient for the task.

Not only that, but many nonprofits must force their employees and even volunteers to use annoying time tracking software!

These kind of problems might be a good soil for some blockchain based things to reach actual utility. It pains me to see how difficult giving can be (even if it's justified) and having a solution to make it leaner would be very much welcomed.

Over the years my opinion of non-profits has become less, shall we say, “charitable”; society has a tendency to glorify non-profits because they “don’t have shareholders” but, in reality, a lot of non-profits give peanuts to those at the bottom (with some even working for free) while executives get far more than a living salary. And whether you’re an educational institution, an insurance provider, or an NGO, being an executive comes with lots of perks like travel, entertainment, lavish offices, etc. So while “no shareholders” is often a selling point for supporting a non-profit, there are still people getting an oversized benefit out of non-profits, who in some disturbing cases are the founders and their family members.

If I wanted to donate a large amount of money to a non-profit, I would structure it as a zero-interest loan, and would just keep deferring the repayment of the loan as long as the org stays true to its mission, compensates executives in reasonable proportion to regular employees, etc. Brian Acton (who co-founded WhatsApp, and later left Facebook) is supporting the Signal Foundation with tens of millions in deferrable, interest-free loans. I think it’s absolutely genius, and wish more people would follow his example.

> If I wanted to donate a large amount of money to a non-profit, I would structure it as a zero-interest loan, and would just keep deferring the repayment of the loan as long as the org stays true to its mission, compensates executives in reasonable proportion to regular employees, etc.

Not sure if I'm missing something, but this sounds totally ridiculous to me.

You give 1M to someone you think is going to spend it well, and they do; why isn't that the end of the transaction? Why do you forever have a gun to their head?

Maybe you've got all the best intentions about what would cause you to call the loan back. But after they've taken donations of this sort, why would anyone continue donating to them? They've built up liabilities to 3rd parties, I'm not interested in potentially paying off their loans instead of doing good work if some of those 3rd parties change their mind.

No organization would accept a donation of this form. If the size of the donation was large enough to be compelling, it would also put the organization at risk. Having a looming loan of millions of dollars at risk if you upset someone isn't viable, especially given that the implication is that this would last indefinitely. A nonprofit that took loans like this over time would very quickly end up with potential debts much, much greater than they could ever hope to repay.

Op mentions sunset provisions in a sibling, but at that point the difference between this and a recurring donation is marginal.

Just donate a smaller amount on a recurring basis. You reduce your risk that the nonprofit will upset you, without making their existence tenuous.

Agreed, if a non-profit takes enough of these that any one loan (or any group of loans) makes up a majority of their assets/income, they've implicitly taken on a new board and are more beholden to the "money board" than to their actual board.

Right, in practice this would result in either the nonprofit giving you a board seat, them refusing your money, or increased overhead either via some kind of insurance policy that they pay into that would cover you recalling the loan, or them just refusing to spend your money until the deferment period expires. But those last two probably result in you recalling your donation because the premiums on that insurance would be ridiculous, so they wouldn't be effectively using your donation.

The problem is you have a huge principle-agent problem with these non-profits. In a standard corporate structure, shareholders elect members of the board who can replace the management. But who elects the board of a non-profit? Why not those who donate to them? There has to be some reliable mechanism to impose accountability by those who give funds.

Now lacking a mechanism for accountability, people give funds with all sorts of strings attached. But wouldn't it be better to give funds with a voting interest attached to the board instead?

It’s very common for the board members of a nonprofit to be its largest donors.

Having access to money doesn't qualify someone to help do whatever the organization does.

In any sizable nonprofit, the vast majority of the board is not involved in actually carrying out the work of the organization. They are there for oversight and political capital.

There could be sunset provisions (e.g. if a loan is deferred for 10 consecutive years, it is cancelled), this would encourage continued giving rather than massive one-off donations.

Year 5 the president embezzled 800k and ran away leaving the non-profit effectively broken, now you are pissed and want your 1 MM back. I think you should go for a walk and meditate this better.

This is even worse than a restricted donation. The nonprofit will live in fear of a loan being called and they'll respond to that risk by spending lots of time appeasing the donor at the expense of using their time helping people, which is likely the opposite of what everyone wants.

On top of this, how could a nonprofit make commitments to people (often people in very vulnerable situations) knowing their funding might get called at any moment? If a donor wants this much control over a nonprofit, they should just start and fund one themselves.

In terms of nonprofits taking too large of salaries, I'd trust beneficiaries to decide what's appropriate. I often feel like some donors care more about low salaries than they care about how much the people being paid are helping others. I'd happily pay a CEO $1M to create $100M in impact over paying a CEO $100k to create $500k in impact, the latter being much more common imo.

This flies totally in the face of Paul's post. His point is to donate unrestricted to non-profits you _trust_. If you can't trust the organization or need to put controls in place to prevent them from doing something bad, you should find another organization to donate to or need to check your ego.

I don't think it's so black and white. The leaders at the organization could change and they certainly aren't going to give you your money back.

So plan to give $x/N per year for N years, and stop donating if you don’t get the results you want.

I don’t see a reason to make things complicated; every bit of overhead reduces the net impact your dollars are going to have.

What if the complication keeps them moving in the direction you want? That may make your dollars have additional impact rather than less.

See Paul’s fine article. If you don’t trust the management at a nonprofit to do the right thing, then don’t give them your money.

One of the biggest challenges nonprofits face is donors who think they get to micromanage them because they give money. Any decent nonprofit has a development head who will politely but firmly tell donors to butt out, and hand them their check back if they don’t.

Right, that is the exact line of thinking that TFA is arguing against. It's a pretty short piece as it is, but if you're looking for a TL;DR then this is as good a sentence as any:

> If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all.

Though see TFA for some (corner-) cases where this might not apply.

Open to your thoughts on why TFA is wrong on this point - but I think you need to flesh your case out a bit more to at least address the arguments presented therein.

A lot of what you see in nonprofits and public agencies is about signaling: https://seliger.com/2012/03/25/why-fund-organizations-throug...

If I were any of the half dozen non-profits I've worked with, I would be unwilling to accept that loan because it is a completely unreasonable amount of risk to be beholden to some untrustworthy random person for any important sum of money, and a completely unreasonable amount of work to be beholden to some untrustworthy random person for any unimportant sum of money.

Start your own foundation and manage your own money. This isn't genius, it's ignorance.

Is there any way to do this easily from a legal and contractual perspective? The other piece here is that if it's a loan you miss out on tax deductions, thereby potentially reducing the total amount you could give. That also limits the more tax-advantaged ways you can give money (e.g. long term appreciated stock if you're in the US).

I imagine someone donating millions is using a donor advised fund to do the lending. By using a fund, they can recognize the donation for tax purposes while lending the money to a separate non-profit.

I'd be surprised if any donor-advised fund could or would do this. You don't have control over that money once you donate it, you can only ask for it to be granted to a nonprofit.

People get very bent out of shape over execs at non-profits getting paid market-rate compensation. The issue is, if someone has a choice between running a 100-person non-profit and being a VP or even CEO at a company, they might be willing to take a 50% pay cut, but they’re probably not willing to take an 80% pay cut. Now scale that to something like the Red Cross or United Way, where you’re dealing with thousands of employees and millions in donations. Or Mozilla Foundation, where people were mad that the CEO was making a few hundred thousand dollars a year in SF, where that’s the same salary a mid-level manager at a tech company pulls down.

If you want competent people to lead your nonprofit, you have to pay them.

55 million USD just in salaries at Wikipedia per year, that's plenty of money to swim into :)

Yeah, and they keep asking for donations as if Wikipedia was in constant danger of being wiped out. Pretty screwed up.

But the non-profit is spending the money, and is not earning any money. If you decide to ask for repayment, how could they pay you back?

Invest the money with non-zero interest, return the original money, and use the extra to... realistically, pay the salary of the person who did the investing.

Yeah, if I had a non-profit, I would just plainly refuse.

Absent anyone else willing to pay for whatever it is they're doing, they can't and would go bankrupt. That's the point.

I doubt someone who wants a pet foundation to succeed would ask for repayment unless they really dropped the ball. Of course, this assumes the person doesn’t anticipate needing the money, which in the case of the WhatsApp co-founder is true.

I'm uncertain of the reality of deferable interest free loans, but I agree for the need for checks and balances when it comes to non-profits.

I think the key would be clarity of mission.

It might be as simple as maintaining a letter-grade of B or above on charitywatch.

I would hope it would be something with more teeth though, like requiring signal to be end-to-end encrypted (for real, not like zoom)

Giving an interest-free loan would not come with the tax benefits of a donation to a 501(c)(3). Often times, gifts are made with appreciated shares to reduce the giver's tax liability. I agree with the problem you point out, but I'm unsure of the practicality of the solution for high net worth individuals.

Perhaps donating 1.4x not tax free but structured in a way that meets the donors other goals offsets the net cash differential from the tax shield in their “evaluation function”.

Shareholder return and the wages of skilled labor/management are very different things! No one is getting rich off a nonprofit merely for putting capital into it, is the point. Nonprofits still buy things that are expensive, including the efforts of skilled and effective people.

> efforts of skilled and effective people.

This has been a truism for more than 100 years and has been mocked for as long it exists. There are entire "Yes Minister" episodes about "we use the usual formula: comparison with wages of industry leaders" (they use chairmen of BP and IBM for comic effect).

Also highly recommended is the episode where Sir Arnold leaves the civil service and looks for a suitable successor who will put jobs his way ... sorry, ask him to undertake the jobs.

Excerpt:

  Sir Arnold: Also, I would like to be chairman of the
              Anglo-Caribbean Association, which would
              give me an opportunity ...

  Sir Humphrey: ... to be of service.

  Sir Arnold: Precisely, especially during the winter months.

How do you understand law firm partnerships in this wages vs capital model?

That’s a good question. I think it’s one of the few ways to convert labor to (meaningful) capital, comparable to being a founder or early employee.

The CEO of a nonprofit may be a well paid associate, but he is still just an associate. The kind of excess revenue that would flow to a partner’s profit sharing check has to be reinvested in the mission instead of disbursed to somebody in cash just because.

Does it? I know hospital system CEO’s get performance pay. Maybe if the numbers were sufficiently egregious and a newspaper (if a local one still exists) decided to do an expose the attorney general would intervene but I think in general some of these non profits are better modeled as perpetual partnerships run for the benefit of partners than they are as mission driven organizations.

Performance with respect to what goals?

Profit or close proxies for profit.

>but, in reality, a lot of non-profits give peanuts to those at the bottom (with some even working for free)

and more often than not, peanuts to those they supposedly help too -- when they're not directly tax scams, covert foreign influence operations, or merely scams...

>while executives get far more than a living salary.

This is the trope that non-profits should essentially be run by volunteers. Which is fine to a degree, but does not scale well (that I've seen, anyway).

Anybody who's discussing the quite unique tax situation around charity in the US, should give Dark Money by Jane Mayer a read. This uniqueness isn't by accident, and only is called charity as a minor, inconvenient side effect.

What uniqueness would that be?

The role and scope of it, as well as its function in tax evasion and political control. The book is worth a read if you're interested.

I think that's a really interesting middle ground. Do you think it can fall into the same trap as mentioned in the article, where it can become "sub-optimal" due to not being as expert as the non-profit?

It's exactly the problem in the article, taken to a ludicrous extreme. If you want to be able to decide how a nonprofit should spend their money, go take a seat on the board (or staff).

I think it’s less prone to that problem if you take a holistic approach when evaluating whether a loan should be repaid, rather than applying very narrow criteria such as “must be spent on a new building”.

Zero-interest deferrable loans are an amazing idea. I suppose you'd have to be a substantial investor in order to get the non-profit to accept such a deal.

Not so sure since as others have pointed out, the non-profit would have to repay the loan. Plus a lot of non-profits' "business models" aren't tailored around repaying donations.

Think of some of the performing arts, dance and music programs in some of the largest cities that are structured as non-profits and charge $20 in ticket fees. If they lost their donors, they would have to charge $100 to $200 in ticket fees just to break even.

And that would happen if they got zero-interest loans as well, since they would be on the hook for paying back the loans and have to cover those.

> the non-profit would have to repay the loan

Only if they ever strayed from their mission. That ought to put a limit to how much corruption they think they can get away with.

This is ridiculous. How would this even work in practice?

Say I am a charity who feeds the homeless. You like that, so you I’ve me a $1 million dollar interest free loan to further my cause, but say you can demand repayment if we strayed from our mission.

Ok... so what is the charity going to do with the money? They are going to spend it on stuff.. so they spend the million dollars either on things that are good for the charity mission or not, but either way they are spending the money.

If afterward you say “that isn’t right, I demand you pay back the loan!”.... how are you going to collect? They already spent the money. The loan wasn’t backed by anything you can take back. You could take the charity over, I guess, but it will be a name with no assets.

Even if a charity had assets to take, how do we know the DONOR won’t ‘stray from their mission’ and suddenly demand repayment years later after the money is spent? Who decides if the charity has strayed from their mission and the money is eligible to be taken back? What if the donor suddenly needs money and claims the charity drifted off mission even though they didn’t?

This is one of those ideas that sounds good unless you think about it.

That means on their most difficult time? You are not thinking this well at all. Maybe the person corrupt was just one member who ran away, maybe the "corruption" was simply an unwise investment, maybe they were scammed by a third part, maybe they dont agree with you on the nature of the investment(say raising the minimum wage of their employees to 15 USD/h).

There's a huge fallacy where people believe that non-profits are supposed to be inherently more equitable and nicer than for-profit companies. And people who believe this fallacy get upset by executive pay at non-profits and turn to sites like Charity Navigator to find charities where 99 cents of their dollar goes to charity.

But the fact of the matter is that paying salaries to people who bring in more money than they make is a good strategy for everyone, that's why non-profits do it. Even if MegaCharity A only spends 60 cents of its income on charity but MiniCharity B spends 99 cents of its income on charity, MegaCharity A is still doing better for humanity if their annual income grows every year due to the strength of their marketing. MegaCharities can raise awareness exponentially and actually change the outcomes of some of the problems in our worlds because they have the power to raise enough money in one place with one cohesive plan to actually fight these things.

I grew up next to St. Jude Children's Hospital. Everyone has heard of them. They bring in billions every year. They have an entire marketing wing and a well-compensated C-Suite (compared to other non-profits). They have way way way more impact because of all these things than most other medical charities for children. No other non-profit in the world can offer completely free medical care to children from anywhere in the world and fly their families to live near them while they're cared for without spending the kind of money they do on marketing and executives.

Non-profits need executives, and people with the credentials to be executives have to choose between non-profit jobs that pay 1/8 of what for-profit jobs do. Sure they make more than a living salary while their employees struggle to make ends meet, but that's true of every type of organization. And in the end, they won't join non-profits at all if the money they sacrifice to do so is too high.

While I get this argument, it does leave out some details that might not make the value calculation as cut and dry. One, sure, your particular charity might be able to spend more on actual charity by increasing marketing, but what is the opportunity cost? If there is a person who donates $100 after you spend $60 convincing them to donate to you, it might seem like that is a good use of the $60... you have $40 extra!

As a business, that calculation is certainly correct. But as a charity, you have to think about what the donor would have done otherwise... maybe your $60 in marketing actually just caused the person to switch their $100 donation from some other charity to yours. Now instead of charity B getting $100, charity A only gets $40 after expenses.

Even worse, you can start an arms race. Now charity B has to spend marketing money to try to win back the donor who switched their donation to charity A, and now they spend $70 to get them to switch back (still worth it from charity B’s perspective, $30 in gain)... now we have two charities spending $130 for $100 in donations.

There is always an opportunity cost.

The money a charity raises doesn’t come out of thin air. It comes from the hard work of the people who donate. Charity A may do more, but it’s taking a lot more money from people to do it.

> can raise awareness exponentially

Is there anyone left that isn’t aware of breast cancer? What is more awareness spending getting anyone at this point (aside from non profit executives)?

Is anyone left that isn't aware of the coca cola brand?

It's the same for charity.

Coca Cola advertisement is as much about making sure you don't spend on Pepsi. Should a cancer charity try to divert your environmental charity donations?

The call to action for a Coca Cola commercial is go out and buy Coca Cola. What’s the call to action for NFL players wearing pink gloves?

I think there are different parts to this though. Paying large salaries to personnel that do fund raising can be frustrating as a donor because to an extent this is a zero sum game: funds for one NGO mean less funds for another, in many cases. So it doesn’t feel like you’re paying for social good. Another is that while, sure, it makes sense to pay good people well, another part of the discussion is that others among the employees are underpaid. Not-for-profits are to an extent expected to stay outside of harmful side effects of capitalism/economics (I’d say it’s even in the name) and cutting costs on part of your labor seems somewhat in conflict with that.

Of course all of this is the result of pragmatism and a focus on whatever it is that’s being optimized for (some aggregate impact measure which is unlikely to include employee welfare to a large extent).

He didn't mention the little problem of the fungibility of money. If a school gets two $100k donations, and one comes with a "no stem cell research" restriction, then it usually isn't a problem to spend the other donation on that, and the restricted one on the road maintenance that would have been done anyway. So a restricted donation is really only effectively restrictive if it significantly outweighs the rest.

Indeed, that happened in the state where I grew up. When they started the state lottery, it was with the promise that the money would be spent on "education." Sure enough, the lottery money went to the education fund, and the contribution from the general fund was reduced by the same amount.

I agree that fungibility is a hugely under-appreciated (or cynically de-emphasized) concept when it comes to funding governments via special taxes. (Great example.)

The concept also applies to non-profit donations more broadly, but only under the assumption that the size of the donation is small enough that it doesn't exceed the total amount that the non-profit would have spent on that cause anyway.

If you're donating a large amount that exceeds the current budget for your chosen cause, then your donation does make a difference -- but it's not quite as large as it seems. It might only be the difference between the previous spending level and the new level (after your donation and after some budget refactoring).

To use your example, if the state was spending $1B on on schools previously, then donating less than $1B doesn't necessarily make a difference to school funding -- they can just push money around. But if you donate $1.2B, then you have made a difference -- of $0.2B.

If you're donating to a small non-profit, though, then maybe it's easier to find targets in which you could dwarf the existing spending on your topic of choice. (Not to say that you should, though. I agree with Graham's argument.)

> contribution from the general fund was reduced by the same amount.

which sucks - but it points to a problem of under-specifying the "rules".

The original intend is to ensure that the proceeds of the lottery added to the education fund. But the wording of the rule only specified where the lottery money got spent, rather than specifying the desired outcome (that schools got $X more funding).

Are you from Texas?

Michigan.

Interesting. It seems to be a similar story in multiple states. I oppose state funded gambling, and this is one reason.

Almost every state I know of with a state lottery passed it under the proviso that the profits would fund “education”. Almost every state then proceeded to gut the education budget and replace it with lottery funds.

If the alternative is more taxes or worse service isn't taxing gambling a good option?

The lottery is effectively a regressive tax. I would prefer increasing taxes in a progressive or at least proportional scheme.

The lottery is a choice. No one is forcing anyone to play. People are going to gamble though, so the state might as well take a cut as a way to discourage it.

> The lottery is a choice. No one is forcing anyone to play.

That effectively makes it a tax on the innumerate.

People are going to gamble though, so the state might as well take a cut as a way to discourage it.

It's fairly well established that rather than discouraging gambling, the result of government endorsement and taxation is a net increase in gambling.

I think I've also seen some analysis that after about a decade, the increase in gambling behavior is also correlated with less taxable income from citizens, higher consumption of alcohol, etc., which amplifies the regressive effects.

The state doesn’t discourage it, they promote it. That’s the problem. Gambling is entertainment for people who don’t understand statistics. It’s a tax on the poor.

It can also be an addiction.

I wouldn't donate to universities in general. The have growing endowments which they don't spend. It also adds the income inequality in the US, you are essentially donating to the education of rich people.

Note that PG talks about non-profits not schools.

Universities are probably the main mechanism we have for economic mobility in the US. There’s almost no where else in the US where the government will give a kid from a poor family thousands of dollars to invest in their long-term well being (and that kid will wind up repaying in taxes their education anyways.)

I don't disagree with what you've said, but your Note is wrong.

PG in the article specifically uses a University donation as an example.

But it says that universities are the exception. It's more of a counterexample.

It really depends on the university. Many do not have substantial endowments. Many educate a disproportionately high number of first generation or low income students.

Many universities are non-profits.

Schools like Harvard and Stanford give away free tuition to students whose families make less than 120,000. This is directly from their endowments.

> only ... if they significantly outweigh the rest.

Or if it causes over-investment into a specific cause (e.g. $100k must go to roads, when the non-profit only wanted to allocate $50k to that), which fungibility of money can't address.

The more specific the restriction is, the less fungibility is able to provide an out.

Fungibility can add inefficiency even if it doesn't make a huge difference in the totals spent.

For example, a friend of mine used to work for an environmental agriculture non-profit. A large donation had been made that could only be spent buying trees to plant. Now, they planted a lot of trees as part of their work anyways so this seems reasonable.

The problem was that it did not cover the labor of planting the trees, tools for planting the trees, or many related costs. In practice, it took them many years to spend all this money across many projects, when an unrestricted donation would have probably had more positive effects sooner.

Moreover, they had to track how much was spent on trees separately for every project so that it could be properly accounted for against this restricted donation, which of course added administrative overhead.

This also illustrates how unrestricted donations are much more useful to the nonprofit. Funds that can be spent as needed are very flexible, and so can fill gaps left by restricted funds.

A lot of restricted donations are more specific than "no stem cell research", which I agree is going to be manageable for most organizations.

It's a great reason against donating restricted, but wouldn't help his overall argument that you should trust the non-profit.

Right, or if funds are earmarked across the board to some adequate degree.

Yeah, but...

You don't want a situation like tips and doordash either.

Ok so everybody learned a new word this week: fungibility.

I've done a fair amount of volunteering for nonprofits, one in particular[1], and I will say that nonprofits are full of the most overworked, underpaid, and passionate people you will meet anywhere. They need every penny they can get, and very often people mistake nonprofits spending money on essential activities like marketing or event planning as "overhead", when such expenditures generate multiples of revenue for every dollar spent. Wouldn't you rather the $1 you donate generate leverage in new donations?

One thing that PG doesn't mention here is fungibility: if you restrict your donations, nonprofits will still route unrestricted funds to where they need to be spent. It's still sub-optimal, obviously, but people who donate restricted don't always understand that they don't have as much control as they think they do over where funds will be spent, and that's a good thing.

[1] Liberty in North Korea is the best way you can contribute to the wellbeing and success of the North Korean people directly...one $ donated to resettle refugees can return 100% ROI after just 2 years: https://www.libertyinnorthkorea.org/

> Wouldn't you rather the $1 you donate generate leverage in new donations?

No, because donations are a zero-sum game. They're not "generating" leverage, they're convincing people to give money to them as opposed to giving money to other causes and/or spending it for themselves.

I've heard that people tended to give a fixed amount every year and charities just competed for that amount; I've never seen any evidence that aggressive marketing leads people/organizations to donate a higher percentage of their income overall. And even if it did, I think the principled thing to do would be to convince people to donate more money overall, ideally to high-effectiveness charities, not for specific causes to compete for getting people's money.

Overall I think 99% of marketing is a blight upon humanity, a disgusting morass of callousness and amorality, and a huge waste of resources. Any money given for charity that ends up going into it should be considered overhead.

> because donations are a zero-sum game

What? No, they are not. Because you never saw evidence, it is true?

I worked for 4 years convincing millionaires to start doing large donations that they simply weren’t doing before. I myself started donating a larger amount recently (because I am earning more in a new job).

You want to think it’s all ” a disgusting morass of callousness and amorality”, so you decide to think this way.

> Wouldn't you rather the $1 you donate generate leverage in new donations?

It depends on where the money is coming from. Suppose I donate $100 to a cystic fibrosis charity and using that money they convince 10 people to donate money to their charity instead of the muscular dystrophy foundation. I wouldn’t consider that an effective use of my donation. On the other hand I have no idea how you’d measure that.

It's measured as overhead and/or donation acquisition expenses. It's never 100%. You can assume some percent of that money goes to such expenses vs actual research (which I guess is where you'd want the money to go, or maybe to outreach or supporting individuals with cf).

That’s not quite what I’m getting at. A marketing dollar that brings in two dollars that would have otherwise been spent on coke is good, a marketing dollar that brings in two dollars that would have otherwise been spent on a different decent charity is not good.

An additional complication: according to the Centre for Effective Altruism, charities vary hugely - several orders of magnitude - in their ability to turn dollars into benefit.

I think the question above is whether nonprofits are playing a zero-sum game - if donors have set aside some budget, and you "acquire" a donation by competing another equally worthy non-profit (instead of competing against the donor's savings account), it's not clear that this is good for the high-level goals of society.

In the long run, it will turn into the same arms race as political donations. At the end of the day, every candidate is trying to win over the same voters, so the net effect of Party X spending $100 million on ads and Party Y spending $50 million isn't terribly different from Party X spending $10 million on ads and Party Y spending $5 million - it certainly does not yield an election that is ten times better at reflecting the voters' preferences. And it may well yield an election that's about how well the parties can market themselves and not how well they can govern.

If cystic fibrosis is a problem that needs ten times the spending of muscular dystrophy, but the muscular dystrophy folks are ten times better at fundraising, the effect of that is to divert funds from cystic fibrosis into getting them to be one hundred times better at fundraising than they used to be.

(I don't have an answer here, any more than I have an answer to how to curtail campaign spending.)

I volunteered for the last few months. One thing that surprised me just a bit is how motivated I could be even without any money benefits. Also that charity warehouse was better equipped than my previous gig at a truck disassembly plant at some very large truck renting company. In the former we had a whole fleet of powered pallet trolleys or fenwicks, the latter had 2 busted manual pallet jacks and 1 fenwick. Go figure.

I would also suggest donating only to non-profits that make everything they do as open/transparent/public domain as possible.

In my limited experience there seems to be a correlation between an organization's productivity in solving their existential problem and how open the org is.

The more secretive the organization (and the less public domain content it produces) the more likely it spends a significant amount of its resource on fundraising and cushy salaries for its management.

Allen Institute, Wikimedia, Internet Archive, are examples where $1 in inputs leads to $100 in public domain output.

Wikimedia? last time they were on HN there was a discussion about how only a tiny fraction of their donations go to Wikipedia and the rest is used for other pet projects most people wouldn't necessarily care about. I think the conclusion was that wikimedia exists to grow bigger and ask for more donations not necessarily to be good stewards of said donations.

Otherwise wouldn't they be trying to create an endowment that keeps the lights perpetually on at Wikipedia without Jimmy needing to beg every year?

Wikimedia used to produce an amazing amount of value with only a tiny budget.

Lately it's budget has gone up by a factor of 100x, and its usefulness/impact has stayed pretty much the same.

Either is was amazing value for money before, or it's a waste of money now. Or both.

> Either is was amazing value for money before, or it's a waste of money now. Or both.

Maybe it's a sin wave? I find it more valuable than ever, but would agree that it's rate of improvement seems to be constant or declining. If they payoff their technical debt, and move to better DSLs, they could kick things into high gear again.

In the US, you can look up every single non-profit's finances.

The 990 form has almost everything you would want, though, not line-item level of detail.

https://www.irs.gov/charities-non-profits/tax-exempt-organiz...

I'm not aware that Wikimedia is producing public domain output. Wikipedia and wiktionary for example are under CC BY-SA 3.0 license which is kind of '(L)GPL'.

Ah you're right. That's a mistake. They should fix that.

It's probably the only thing protecting Wikipedia's existence.

You should never let the risk of losing your organization stop you from doing the right thing.

> Which means a restricted donation is inherently suboptimal

Maybe so, but maybe it's a compromise as well. If not, no funding at all would have been given which maybe would be a net-loss long-term. Receiving money to do research might not always include research you want to do, but you'll gain more experience overall and do better once you get to the research you want to do.

I'm thinking from the perspective that if I got to choose where my taxes went to. If I could decide which areas 50% the money goes towards, I think I would have been more happy paying taxes and maybe would add more, in order to fund efforts I believe in personally.

At least in AZ, we have several tax credits that allow you to donate to organizations in certain categories. Unfortunately it’s a fixed dollar amount and not a percentage of liability.

I agree, it would be nice to control where more tax money was directed.

Elections are how you control where your tax money goes.

Micro-earmarks by voters would create enormous imbalances. Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded.

> Micro-earmarks by voters would create enormous imbalances

How sure are you about this? Would love to see some research into how things would work if taxes were more "crowd-fund" oriented.

> Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded.

Maybe in some places today it would go like that, and in others to opposite. Considering the huge wave of "defund the police and fund social work" in the US today, I think the balance would be the other way.

>Police get so much money for equipment that they can’t spend it all, while public defenders go unfunded.

Isn't that true today?

The donations are categorized: organizations the at help the working poor, schools (woefully underfunded in AZ), foster and adoption organizations.

Right, but that's why the article is telling donors not to restrict their donations, as opposed to telling charities to prohibit restricted donations.

Very true. I've been running non-profits to help the security of journalists and human rights defenders for years (https://www.secfirst.org). One of the big issues is that donors often only want to fund projects which means core costs (accounting, IT or whatever) often are not covered or are only partly covered.

To an extent project specific funding also means that some organisations have to make sacrifices or do projects that aren't central to their mission. Mission creep can happen with some NGOs. Without core costs covered it's also a lot harder to develop new concepts as there isn't really much room essentially for R&D.

Core costs in general also become a bit of a barrier to entry for new non-profit ideas and organisations. Core costs usually are only granted by big donors and usually will only be granted to big organisations. It's very very hard as a small org to get core costs paid for so it's hard to scale a lot of things. Collaboration in the NGO field is very varied, a lot of big orgs talk about it but when it comes down to it, often are very lacking. This leads to lots of inefficiency, overlap and duplication.

Also the project based funding tends much more towards new ideas rather than maintenance. Maintenance and sustaining projects just doesn't get the same level of funding. For example we built our open source Umbrella App for learning about security with project specific funding. Nearly all of which gets spent specifically on that project. It's very hard for us to find donors willing to fund the ongoing maintenance of the apps. The rest of our core costs has to come from our training and consultancy work with organisations. That's tricky as we love doing it but it means we can't focus as much on our core tool building.

Because of the core cost issues, the non-profit space is often very inefficient. It doesn't really have the same culture of startup, mergers, takeovers etc. To extent what you often get is zombie NGOs which become big and inefficient but soak up the donor money and keep smaller/better organisations out of the market. The way big donors work, many are very slow and risk adverse. So that means for example a lot of the big funders will never find any organisation that hasn't been around for at least three to five years. Imagine a VC not finding any company that hasn't been around for more than three to five years!

This. 100% this.

Having spent many years volunteering for various nonprofit, and having been deeply involved in fundraising and budgeting, I cannot upvote this enough!

Restricted donations add overhead while making it harder to fund important things like bookkeeping, rent for an office, and staff salaries. If you believe in the nonprofit's mission, just let them figure out what to do with the money!

On the same note, you are better off making a few large donations instead of spreading a bunch of small ones around that get eaten up by overhead.

The one restriction I insist on is that they leave me off their mailing list! I get it, the odds are good that a previous donor will donate again, but especially for small donations it ends up feeling like all I accomplished was to purchase a bunch of spam & kill some trees!

The article mentioned the Gates foundation which has terrible records in education initiatives:

- The big failure in small schools initiative: https://marginalrevolution.com/marginalrevolution/2010/09/th...

- The big failure in teacher evaluation initiative: https://www.businessinsider.com/bill-melinda-gates-foundatio...

- The big failure in Common Core initiative: https://www.washingtonpost.com/news/answer-sheet/wp/2016/06/...

Now it is funding anti-racist math: https://equitablemath.org/

Most startups fail, and we often talk about how that's a good thing. Absent capital constraints, why is that different for charitable initiatives?

Gates is devoting resources towards nuclear (Terrapower) and nuclear has a terrible track record in effeciency (LCOE) and generation as a total percent of fleet capacity. Should he stop trying there? I would argue it isn't. I would argue the same for trying to improve education.

Not the same.

Try failed engineering wouldn't harm anybody (except wasting money).

Try bad social policy, could harm people you experimented on. It also has broad impact on the society.

Quote: "..., there is nothing inherently wrong with trying a reform and having it fail. The key is learning from failure so that we avoid repeating the same mistakes. It is pretty clear that the Gates effective teaching reform effort failed pretty badly. It cost a fortune. It produced significant political turmoil and distracted from other, more promising efforts. And it appears to have generally done more harm than good with respect to student achievement and attainment outcomes."

https://www.educationnext.org/gates-effective-teaching-initi...

Therac-25? There are so many other examples, this comment is just wildly wrong.

Trying things has some inherent risk of failure, but that doesn’t mean it’s not worth working on hard problems. It just means you do the best you can to account for that risk (and learning from it to not make the same mistakes again).

Edit: You added the quote which I don’t disagree with in sentiment (I don’t know specifics of the policy in question).

If you care about education reform, I guess you must have heard of the Common Core. In the field of education reform, almost nobody thinks a national standard is critical / essential to the education reform in the country. It created huge huge political turmoil for many years. Both left and right were against it, but it got pushed through. Now it is gone, nobody cares. Imagine the resource wasted on this meaningless effort which could have been used for something else.

Bill Gates made all of that money by destroying Netscape, Be, and countless other companies. His dog shit software like Windows 2000 and Internet Explorer set internet security back by about ten years. As far as I'm concerned he is a force for evil in the world and he should shove his resources up his ass. He doesn't deserve to be a part of the solution to the world's problems with energy, education or anything else. He isn't allowed to "buy" being a good person. He isn't one.

I think the world was a worse place when Bill Gates was heading Microsoft. I think it's a better place now that he's heading a massive charitable foundation.

Life is complicated. People are complicated.

Successful schooling involves a parental component. We probably need a way to pay parents to help their kids with school.

The other thing I noticed with the pandemic and distance learning is that kids do really well in small groups (2-4 kids) and extremely well 1:1. This is a tutelage model. I felt that the classes that went best for my kids incorporated the small group style. In this model, the general education itself can be recorded and the small groups live which work really well.

I think this is the future but there's a lot of push back on that.

> We probably need a way to pay parents to help their kids with school.

Check this great interview: Glenn Loury & Roland Fryer https://www.youtube.com/watch?v=RL1peNBAnns

That was a great interview. I wonder if we could engage college grads and college students with tutoring jobs that reduce their student loans at the national level. You could do some amount of tutoring and get a credit reduction. This way you don't have to do a Teach for America type job or work for a nonprofit but maybe get a little help paying things down.

Maybe a good idea, if combined with vouchers / education savings credit.

What do vouchers and education savings credit do?

Give money back to families to spend on education, but how to spend it is their own choice.

> The other thing I noticed with the pandemic and distance learning is that kids do really well in small groups (2-4 kids) and extremely well 1:1.

Small group learning has been a standard part of education for a few decades.

It is way too early to make claim that the pandemic version of this has improved things. Anecdotes thus far have pointed to some kids doing well in pandemic small groups and 1:1 while others are doing terribly, but data about the effects has not even been collected yet, much less analyzed or conclusions drawn.

It's always way too early or way too late in the let's do nothing world.

The tone of these articles is really unfortunate.

Very much positions the donors as bad guys, their own admission of failure as proof that they’re bad guys, and that the problems are fundamentally unsolvable and that we shouldn’t do anything.

It’s fine to note programs that don’t work; but schadenfreude in fully-funded experiments with the goal to help children is counter-productive.

Well, Gates is a bad guy. He was a robber baron who decided that stealing a whole lot of money makes him the world's leading expert on everything. He has no training in pedagogy, epidemiology, sanitation, or really anything else relevant to the missions of his organization, yet he seems to actually believe he's a Great Scientist Using Evidence-Based Approaches to Save the World. He lives in a $200 million house yet has funded a billion-dollar propaganda campaign to convince people he's generous.

I laugh at Elon Musk when he thinks getting fired from Paypal means he knows how to run a car company. I also laugh at Bill Gates when he thinks stealing the worst desktop operating system makes him a doctor.

We can't overthrow our masters. At least let us make fun of them.

> He has no training in pedagogy, epidemiology, sanitation, or really anything else relevant to the missions of his organization

I'm confused by this statement. It only counts as training if you did it around age 20? Or what makes you think that someone who is spending this much time, effort and money on a given topic would not arrange for appropriate (or rather, excellent) training on it?

Or is this something you conclude by starting from the assertion that Bill Gates must be a bad guy?

You can certainly make the argument that he was a bad guy, but I don't know if I can continue to draw that conclusion. He built that house over 30 years ago for $60M. While that is certainly excessive, its not like he just bought a $200M house while trying to be philanthropist. At least $45B in charitable contributions, so the house is worth 0.4% of that. Is the house really relevant?

Isn't it possible he has changed since then? What you call a "billion-dollar propaganda campaign" I call billions of dollars worth of charitable contributions. He may not have formal training any any of those things, but he can pay people with the training to advise him and make the decisions. Do you think he is just making all of them in a vacuum? Money can buy you a lot of experts to consult.

What would you prefer him to do with the money, if not attempt to do some good with it?

>What would you prefer him to do with the money, if not attempt to do some good with it?

Pay his employees more, charge less, and pay more in tax. Basically not have $60 billion dollars.

Clearly he's not out there doing the surgeries himself; he hires people to do that.

>yet has funded a billion-dollar propaganda campaign to convince people he's generous

And let's not forget the scummy secondary benefit of Gates donating tons of money into soneth education. It undoubtedly is going to have some influence on what computers they use and teach, further entrenching Microsoft as place.

>Now it is funding anti-racist math: https://equitablemath.org/

In my limited experience, a lot of students seem to have specific weaknesses with the subjects that are traditionally taught in middle school. Manipulating fractions, applying the distributive property consistently, and simply understanding how to dereference a variable by inserting an equivalent number or expression -- I have multiple students messing these up pretty much every week.

With that said, this website is extremely discouraging. There are five "steps" on the front page but no specifics, and buzzwords everywhere, suffused with no-duh filler content and paraphrased repetition.

https://equitablemath.org/wp-content/uploads/sites/2/2020/11...

I dug in a bit and found that and... as progressive as I would like to think I am, I'm 100% confused as to how "focus on getting the 'right' answer" and "independent practice is valued over teamwork" is... 'white supremacy' showing up in math.

HN may not be the place to discuss this, but... am I missing something obvious?

>I'm 100% confused as to how "focus on getting the 'right' answer"

In my opinion, there is a problem here, but it's being expressed wrong. The complaint should be: "focus on getting the right 'answer'", with 'answer' called out, i.e., that writing a number or expression that satisfies the problem setup is the primary goal. But this tends to teach students to take shortcuts when we need to teach fluency in reading and writing mathematical notation, particularly, as I mentioned, basic notation: fractions, parentheses, variables and exponents.

Is this "racist"? Not per se, but it happens within a system where the higher-class students go to schools that have highly qualified teachers and innovative methods (e.g. IB) while the unnecessariat are consigned to schools which have only "proven their worth" through standardized test scores and which teach students to pass the same; what is unfair is that this substandard understanding is mostly taught to the already-disadvantaged.

But the whole site is written like this: the recommendations of the experts have been filtered through seven proxies of PR teams, not all of whom seem to be trying to offer comprehensible and reassuring explanations.

> HN may not be the place to discuss this, but... am I missing something obvious?

The Gates Foundation are likely giving money to these efforts so as to balance out the heavy "learn to code" focus of most other SV-tech educational efforts. It's the anti-white-supremacy equivalent of buying carbon offsets for your dirty energy use.

You are so right and it’s sad to see.

A number of these things are just good general advice. Others a bit less so.

The explainer on "focus on getting the 'right' answer" (page 65) is actually pretty okay. For example it encourages to "Engage with true problem solving" such as "What are some strategies we can use to engage with this problem?". That seems pretty good to me. It goes on to say that "teaching math isn't just about solving specific problems. It's about helping students understand the deeper mathematical concepts so that they can apply them throughout their lives". Again, this seems fairly on-point to me for middle/high-school math.

People seem to have taken this part in particular a bit out of context and ran with it. They mostly mean "having students than semi-mindlessly solve equations to get the right answer isn't really teaching them all that much about math". I think most here would agree with that.

I find the explainer for "Independent practice is valued over teamwork or collaboration" (page 61) really weird though: "it reinforces individualism and the notion that I’m the only one. This does not give value to collectivism and community understanding, and fosters conditions for competition and individual success". At some earlier point there was also a swipe against "capitalism".

Overall, I found it mostly good with some bad mixed in.

But ... I'm from a region in the Netherlands with a fairly homogeneous white population, and attended a school where almost everyone was white; my class certainly was. I can confidently say my math classes sucked, for quite a number of the reasons listed in that article.

But was this because of "white supremacy culture"? I don't think so. That seems like a really narrow view on things. Sometimes bad teaching is exactly that: bad teaching. Nothing more, nothing less.

I'd initially missed 'explainer' pages - I was clicking what looked like links, but they weren't initially working.

Even after reading some of these pages, things still don't make much sense. If there's a link to 'racism', I'm still not seeing it.

Another weird one was "teachers enculturated in the USA teach math the way they were taught math". But... I was under the impression that we'd been using 'common core' stuff for the past 10+ years, and a big complaint is that teachers can't teach it because it's not how they learned.

Very little of these explainers seem to make any attempt to connect the racism angle, which is disappointing.

As you pointed out, bad teaching can just be bad teaching, and doesn't have to have any other explanation.

A few others I saw:

"Have students create mathematical definitions in their own words in groups, and bring the groups together to co-construct mathematical definitions as a class."

Unless there are agreed-on definitions up front, how would you determine if anyone is correct or not?

"Let’s get into partners and do a thinkpair-share. We will incorporate everyone’s ideas and try to synthesize them."

I had 'group work' 30+ years ago. It sucked. It assumes that everyone even cares, or cares enough at the same level.

"How do I dismantle power structures in the classroom?"

Classroom Activity: Flipped learning, where students teach concepts to other students.

That's just creating other power structures.

The good things you found in there have nothing to do with race. Also they are well known in math education. It's not like the authors discovered / created those pedagogical insights. They are using those pedagogical insights to push their political agenda.

Since seeing the original comment I have spent the last 2 or 3 hours reading about this. I started on the website and with that document and was confused myself. I also didn't notice the explainers later in the document (the links didn't work for me either).

I watched a webinar linked from the website which covered the material in the document, but the presenters didn't cover a 'what is and what isn't racist in the maths classroom' checklist, rather they showed how to use the document in your teaching/preparation. They did note at the beginning that a level of awareness about antiracism is required, and at the end linked to several sources regarding racism in the curriculum and racism in the math classroom (and beyond).

I had seen a meme recently about 'math is racist' and I didn't get the reference at the time, I'm guessing it's about this foundation. Everybody knows that math is not racist and nobody is claiming it is. The problem is that governments are racist, institutions are racist and classrooms can be racist.

There is a mind view that many people hold which automatically assigns people of colour a lower expectation of academic achievement. The government announces new educational reforms citing statistics that people of colour achieve less academically. These reforms pay for additional teaching time or 'interventions' which amount to a few to a dozen hours of extra teaching which is supposed to achieve something that the five year old was unable to learn in the 36000 hours they've lived so far and 'level the playing field'. Teacher evaluation bars people of colour entry to eighth grade math though they have the grades. Math questions as recent as this decade ask you how many plants of cotton can 400 slaves pick in 120 days or how many slaves can you fit in a slave ship with x and y dimensions.

There is nothing in the brain of people of any race (or gender - maths is sexist too!) that stops them from comprehending mathematics. So why do white boys do math more good? Then go on to earn the good STEM degrees and high-paying STEM jobs disproportionately?

Math focusing on the right answers in the classroom is discouraging for anybody who is already discouraged. Similarly, having a hard time understanding and being afraid not only to get something wrong, but to question the authority can be scary, especially when you are growing up in an environment where questioning some authorities can incite conflict.

As another comment suggested, it is generally good advice for any math teaching. The same goes for teamwork over individual work - being able to explore and approach the problem as a group, and work through it vocally with others as a collective can be encouraging and is also a good opportunity to learn from other perspectives. From the perspective of race, I would agree with the guide which mentions the problems of 'individualisation' in the classroom, how this can lead to competitiveness and further discouragement of those who are struggling.

Most of the principles in the guide seem like best practice to me for any group of young mathematicians. Especially those who do not feel like they can be mathematicians or have any place doing mathematics. Despite its diverse history, success in mathematics in popular culture is associated with white men. That is my view at least, and whether that view has been developed because of my own internal racism or because that is how mathematicians were depicted to me in TV and cinema I don't know.

I think there is a lot to unpack here, I am happy that some discourse on the subject has started here. I am looking forward to learning more about this topic and about myself and those around me and thank the original commenter for bringing it to my attention, though I think they realise themselves that racism in the classroom is a problem which NEEDS to be tackled.

I made a HN account for this so I am sorry if I have missed any commenting conventions. I am on mobile so do not have any citations but would be happy to provide them when I can.

HN is unfortunately the extremely wrong place to discuss this :( Language like that can be used by bad-faith folks here to push the (false and ridiculous) idea that the Equitable Math people don’t care about mathematical rigor or logical reasoning.

The idea is that those attitudes encourage hypercompetitiveness among children and inappropriately reinforce the idea that math grades are a measure of “inherent ability.”

- “Independent practice is valued over teamwork” encourages a classroom where the “best students” come from families who can afford private tutoring

- “focus on getting the right answer” means that teachers don’t get an appropriate sense of where students are actually struggling, and again incentivizes the affluent privately-tutored student who doesn’t have to worry about explaining their answer.

It is not that either of these are inherently “white supremacist,” but they are inherently poor measures of mathematical understanding. The racism connection comes in by the fact that these are measures which can be “juked” by affluence, and that students from rough backgrounds are unfairly penalized. Given that racism in US teachers is also a big problem, it can lead to ugly situations like “Jimmy is dumb at math and can’t do Algebra II” rather than “Jimmy makes a lot of dumb sign errors and needs specific practice.”

In particular: these are (nominally) race-neutral criticisms of US public education with especially acute impact for black students, but also affect white students from tougher backgrounds.

You are exaggerating lots of things here.

- The link between “Independent practice is valued over teamwork” to "private tutoring" is very weak.

- The link between “focus on getting the right answer” to "private tutoring" is very weak.

- No. Those measures do not particularly unfairly penalize students from rough backgrounds. No matter what other measures you propose, affluent students can benefit more.

- No. Racism in US teachers is not a big problem.

- Focusing on right answers and using standardized tests actually help students from tougher backgrounds. Not the other way around.

Racism in US teachers is in fact a big problem, as is racism among doctors and bankers[1]. And focusing on standardized test scores almost always hurts poor students because it rewards families who can afford private test preparation[2]. These are scientific facts with a great deal of evidence - evidence which is considerably more compelling than “it sounds good to Hacker News.”

You are just wrong. You cannot just make things up because they are ideologically convenient. And I am so sick of having the same zombie arguments with people who are recklessly indifferent to the facts at hand.

> In this sample, we found no significant association between occupation and level of bias (see Table 4). That is, teachers held levels of implicit bias, explicit bias as operationalized using a feel- ing thermometer, and symbolic racism that were not statistically different from the levels of nonteachers. This result persisted through all five models. That is, this lack of relationship held despite controlling for demographic factors (Model 2), educa- tion (Model 3), political preference (Model 4), or all of these characteristics combined (Model 5).

> In conclusion, we have found that teachers’ [anti-Black and pro-White] bias levels are quite similar to those of the larger population. These findings challenge the notion that teachers might be uniquely equipped to instill positive racial attitudes in children or bring about racial justice, instead indicating that teachers need just as much sup- port in contending with their biases as the population at large.

> Researchers, including those who work for the test companies, have known wealth is strongly correlated with outcomes on standardized tests for years. There are several reasons why. Wealthy students attend higher ranked schools within more financially resourced districts. Richer families can afford more tutoring, test prep and enrichment activities. The College Board never claimed that test prep could improve scores until it was available for free online, at which point the evidence of improvement came rolling in. Standardized tests are better proxies for how many opportunities a student has been afforded than they are predictors for students’ potential. Consequently, tests weed out budding low-income students instead of creating equitable access to institutions that help build wealth. This is why many colleges have abandoned using standardized test altogether.

[1] https://journals.sagepub.com/doi/pdf/10.3102/0013189X2091275...

[2] https://www.brookings.edu/blog/the-avenue/2019/05/17/student...

> And focusing on standardized test scores almost always hurts poor students because it rewards families who can afford private test preparation.

All the other measures (extra-curricula, projects, presentations, reports, etc.) benefit richer family much more. Standardized test is the only thing poor students can work hard on without needing much help / resource from parents. The solution in the article [2] you cited is giving money to kids.

> Racism in US teachers is in fact a big problem,

Your own fucking quotes contradict that.

> teachers held levels of implicit bias, explicit bias as operationalized using a feel- ing thermometer, and symbolic racism that were not statistically different from the levels of nonteachers.

> In conclusion, we have found that teachers' [anti-Black and pro-White] bias levels are quite similar to those of the larger population.

At least put in the effort to find citations that don't directly admit that the claim you're making is false.

I think that you have missed the point. It is implied in his argument that if the level of racial bias in teachers is no different than in the larger population, then there is a problem with racism in US teachers (as a result of their being a problem with racism in the US).

> if the level of racial bias in teachers is no different than in the larger population, then there is a problem with racism in US teachers (as a result of their being a problem with racism in the US).

And if the level of murder in teachers is no different than in the larger population, then there is a problem with murder in US teachers (as a result of there being a problem with murder in the US).

Even under the grossly unsubstatiated assumption that there is particularly a problem with murder in the US - rather than some specific murderers (or white supremacists, as the case may be) who know perfectly well who they are and will not respond to 'raising awareness' about 'anti-murderism' - presenting that as "Murder by US teachers is in fact a big problem." is at best ridiculous cherry-picking.

Replace "teachers" with "police" and you do get a reasonable argument. In a situation where someone has outsized authority and influence, even a baseline level of <bad thing> is worse than normal. If you're looking to affect outcomes most significantly, reducing "racism" amongst teachers is probably going to be more impactful per $ than reducing it amongst the general population.

> Replace "teachers" with "police" and you do get a reasonable argument.

Not really. I'm fine with a baseline level murder by police (at least to the extent that I'm fine with where that baseline is in the first place, which is admittedly not a given), provided there is also a baseline level of punishment for said murder. The problems with police tend be either that there is a higher level of murder by police than the general population, or that there is a lower degree of punishment for it.

Also, of course, I don't grant that there is a problem with racism in the general population in the first place, since white supremacists and social justice warriors combined are substatially in the minority. You might be able to make a credible case that racial bias is a (minor but worth addressing) problem, but noone's done so lately, and you'd need to start by making it clear that the thing you're talking about is fundamentally distict from a explicit belief that one race is inherently better or worse/more or less valuable than another, as white supremacists and social justice warriors believe.

We aren't talking about simply a baseline level of murders, but murders due to (or influenced by) racism. Even if you're okay with a baseline level of murders by police, whatever that level is, I hope you'd have problems with a distribution where the victims are solely black people (or to be more real-world, where murders of black people are punished less severely and less often, thus giving greater incentive [or equivalently, less disincentive] to kill people of a certain race).

In such a situation, the same "amount" of racism/discrimination/implicit bias has an outsized impact due to who wields it.

The same applies to teachers. If a random person believes that black people are predisposed to academic failure, that's bad sure, but won't negatively affect many black children. If a teacher who teaches black students holds that belief, that will influence how that teacher teaches those students.

> social justice warriors belive

This is a mischaracterization of what anyone I know who would consider themselves a "social justice warrior" believes, so I think at least some of your objection is due to a misrepresentation of the statements being made by these people.

No it doesn’t, the specific point is that racial bias is just as bad among teachers as it is every other profession. I never said teachers were more racist than other people, in fact I very specifically said:

> Racism in US teachers is in fact a big problem, as is racism among doctors and bankers[1].

If you want to argue that racist doctors and bankers aren’t a problem then feel free. But don’t project your problems with reading comprehension onto me.

> In my limited experience, a lot of students seem to have specific weaknesses with the subjects that are traditionally taught in middle school. Manipulating fractions, applying the distributive property consistently, and simply understanding how to dereference a variable by inserting an equivalent number or expression -- I have multiple students messing these up pretty much every week.

Yeah, this is a frustrating one.

I've been catching up my little brother on some math stuff, and I can see him slowly getting better with distributivity, but it's tough.

The frustrating thing is I have a really good sense of what error he's likely to make and why, but I also know that when I try to explain it it's just going to confuse him and he's going to think "your explanation makes sense to me, but my explanation also made sense to me and apparently it was wrong, so how the hell am I supposed to know how to solve this?"

I feel like this is a problem that could be solved with technology, but existing solutions are really terrible at it. I looked at Brilliant, but it does the same "explain complicated mathematical concepts with words that sound logical (and pictures) so the next time the kid tries to understand a complicated thing they'll come up with their own logical-sounding explanation and be completely wrong and get stumped" thing.

EDIT: I think something like an equivalent of Human Resource Machine, except for proof solvers, would be really nice.

I imagine that it will turn out to be a mixture of a few valuable insights, and a lot of politically motivated bullshit. The insights will be used as an excuse to push the politics.

It would be nice if someone could extract the good insights and publish them separately, maybe just on one page of paper. For example, here are some ideas that come to my mind:

* For minority students, make sure that the language itself is not a major obstacle. Maybe in a perfect world everyone would get a teacher who speaks their preferred language. But a simple useful thing you can do here and now is to print a dictionary of words you are going to use in the following lecture. Like "triangle = el triángulo", except this is of course a stupid example, but there are probably also good ones. So the student doesn't get stuck merely because you used a word they didn't understand. Depending on how much work you want to spend here, you could even provide a short summary of the lecture. (Review it with someone who speaks the language and understands your subject, don't just use whatever Google Translate throws at you. If you don't know such person, you could probably find someone on Facebook.)

* Do not assume everyone has an access to internet. If it is important, print it on paper and give the paper to kids.

* Check whether your examples are not culturally foreign to the students. Again, a silly made-up example, but don't use "two apples and two apples equals four apples" as an example for kids from a culture that doesn't know apples (or even might have a taboo against apples); just use oranges or whatever. Or just make sure you use a wide enough range of examples.

* Try to get some insight into what their culture expects from your students. Maybe asking questions is considered impolite, or trying to answer a question unless you are 100% sure, or admitting that you know something that your classmates don't know, or admitting that you don't understand something. Try to find a workaround; discuss your solution with people from given culture.

On the other hand... I have downloaded some documents from that website and the language they use is horrible. Bad faith assumed everywhere, there is no such thing as an innocent mistake or ignorance, everything is "racism" and "supremacism". Come on; if you are trying to tell people they should be more empathetic and helpful to each other, the least you can do is stop being an aggressive asshole towards them. Calling someone a racist twenty times in a day, just because they e.g. teach math using the traditional methods, that definitely is not a way to make friends with anyone who has a shred of self-respect. (Yeah, it's not about making friends, it's about signaling being "holier than thou".)

You are 100% correct. It is critical race theory (CRT) decorated with a few pedagogical insights. Those pedagogical insights have been well known. They can stand alone and do not need those CRT BS at all. Also, they are never a major issues in math education.

Never? Really? That's a strong claim.

Interestingly, its still their money, and still their choice where to use it.

Yes. Even when they are probably doing more harm than good.

We learn. That's not harm.

At the expense of others. That is.

Not so much? Hard to do worse than we already are :)

Money that you've earned honestly and paid your fair share of taxes on is yours free and clear. Profits from an illegal monopoly that you've avoided tax on via a 503c not so much.

Unbelievable.

Rather than diminishing the efforts of others, you could start helping by describing your own efforts to improve education (in order to qualify your ability to assess the mentioned and other efforts to improve education and learning)

In context to seed and series funding for a seat on a board of a for-profit venture, an NGO non-profit organization can choose whether to accept restricted donations and government organizations have elected public servant leaders who lead and find funding.

Works based on Faust: https://en.wikipedia.org/wiki/Works_based_on_Faust

I work at a non-profit, and, anecdotally, I think it is more complicated as there might be 3 areas of funding concentration:

1. Areas that are overfunded because restricted donations tend to concentrate there.

2. Areas that leadership want to fund, and would direct unrestricted donations to.

3. Areas that neither restricted donations nor leadership want to fund and thus tend to be chronically underfunded (e.g. payroll and staffing in certain departments)

I think thoughtful restricted donations have a place then, but a key is understanding of the industry and transparency in operations

Kudos to MacKenzie Scott for helping bring this issue to light with her massive unrestricted giving.

She really is an inspiration. Here's her announcement of the gifts and a list of the organizations. https://mackenzie-scott.medium.com/384-ways-to-help-45d0b9ac...

I recently helped to found DigLit.ca, and non profit that helps build technology for other nonprofits. What we've found when dealing with nonprofits is that a lot of the smaller organizations are, suprise suprise, struggling to survive. They're trying to carryout their general missions, but unless they have some kind of consistent funding model, a lot of their energy is turned towards keeping the organization alive. I don't think there's anything wrong with that, it's just the nature of the nonprofit game. But our organization acts a bit like a technology donor, and we've definitely had to restrict the nature of our services to mission facing purposes. Aside from the technical challenges of contributing to the survival of an organization, we've also found that developers want to help with problems directly.

I once had an interview where one of the questions asked was whether I was on working on non-consumer facing products.

They apparently had past hires be angry about doing so.

This article touches on non-profits, but I feel it comes from a deeper well. We are wired in our culture around how we give donations.

We only give money to people who we think would spend it most wisely. We walk past all the people in San Francisco on the street because we know that if we give them money it will only go to more drug use. We drive past the person on the left turn lane because we don't want to encourage him to be there.

When I spent 2 years traveling by motorbike all over Vietnam, Cambodia and Laos, I saw first hand what donations do from birth... little kids in the middle of nowhere would run up to me and say hey DOLLAR, give me DOLLAR. They were trained for that.

> little kids in the middle of nowhere would run up to me and say hey DOLLAR, give me DOLLAR. They were trained for that.

And why not? It seems like rational behavior on the part of the kids/families given their circumstances and their incentive systems.

My point is that some other foreigner drove past them before me and gave them money. Just like the person sitting on the left turn lane learned it from somewhere. I wasn't arguing that the behavior is rational or not. I'm talking about how we are wired in our culture around giving donations and it isn't just about how donors dictate how non-profits spend their money.

I mean, the real problem with Vietnam, Cambodia, and Laos is the illegal war the US fought there to maintain the value of the dollar.

Charitable donations are by definition a response to a failure of society in one way or another (regardless of whether your political views consider it a failure of the market, a failure of government, or some of both). Even in the ideal case, they exist because some problem is so bad that someone feels morally compelled to give their spare money to try to solve it. We donate to provide water to certain places in Africa (or Michigan) because there isn't reliable infrastructure there, but we don't need to donate to provide water to San Francisco. We donate to specific medical research goals because the funding system for medical research (again, whether it's government-backed or market-backed) isn't investing in some problem, and we think throwing a bit of money at it might cause us to happen on a cure, and at the same time we complain about how other medical costs for different problems are out of control. We donate to legal activism nonprofits because, bluntly, we believe our justice system will fail to be just without that intervention. We donate to Mozilla because there's no money to be made in selling web browsers thanks to the various vertically-integrated competitors but we think independent web browsers are still valuable. And the Gates Foundation donates to Vietnam, Cambodia, and Laos because the kids there quite frankly will never grow up to be Bill Gates without rebuilding some infrastructure first.

(Or, of course, charitable donations are PR - a way for the Andrew Carnegies of the world to deflect questions about whether they've quietly caused more failures of society than they're currently loudly fixing.)

The reason that your town needs a food bank is that there are people in your town who can't just afford food and need to rely on the whims of people who believe in private charity in order to not starve to death. Running the food bank is great, and I'm glad that there are people with those whims, but making it so that nobody in your town has that problem would be even better. It doesn't matter if your answer is "more taxes to support welfare" or "more teaching people to fish," either of them is more sustainable.

I'm not saying we shouldn't donate to worthy causes. I do, quite a bit, and I think those of us who make tech-industry salaries do in fact have a moral obligation to do that for as long as these failures of society exist. But let's admit that it's a second-class approach.

Donations cannot solve problems. They can at best soothe the effects of a problem. There isn't really any fundamental difference between the guy with a sign on 101 asking for a dollar every day, the kid in Vietnam asking for a dollar every day, and the New York Public Library emailing me to ask for many dollars every day. Or, ultimately, even the beloved local for-profit business with a Kickstarter to save them from shutdown asking for a (hopefully) one-time pile of cash to make rent. All of them feel like their best shot is to hope for donations. Let's figure out where they should be getting funds from instead.

I stopped donating (with a few exceptions) because of the general lack of transparency in where your money really goes, and the stories of fraud, absurd salaries of CEOs/management and cold-calling which turns out to be so expensive that the first 1 or 2 years you are effectively paying for the call center. Etc. etc.

My wife and I have given reasonably large donations to various groups and told them we're not interested in getting push communication from them. We'll donate again if and when we can.

The orgs that don't respect that (Medecins sans Frontieres comes to mind--multiple glossy mailings per year) get removed from the list. It's kind of harsh, but there are plenty of deserving orgs to support who are compatible with this stance. I understand why, in general, such outreach makes sense, but in my specific case, I find it annoying and it doesn't motivate me.

I've found the Against Malaria Foundation to be stellar in this regard. They were very responsive in getting set up to accept Canadian stock when I inquired about it. They did one unexpected followup communication, but it wasn't a solicitation. Instead, they were considering changing how stock donation would work in Canada in order to minimize their fees, and wanted feedback on whether it would be a good or bad change from the perspective of a donor. They were explicit that the feedback was optional, and that they weren't soliciting a donation, just effectively doing market research.

You should examine the nonprofit's Form 990 if you have concerns or look at their page on Guidestar.

As a board member of two nonprofits, I STRONGLY agree with pg. Restricted donations are not only an administerial headache, they strain the donor/recipient relationship and lead to suboptimal spending.

> Usually the way the donor wants the money spent is not the way the nonprofit would have chosen. [...] If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all.

The situation might not be "understand", but "choose". The donor's interests in donating might not be 100% aligned with the effective mission of the charity.

For one example, I imagine the donor might have a particular problem they want addressed, and that overlaps incompletely with the activity of the charity, but the charity otherwise seems the best vehicle for addressing that particular problem.

For a less admirable example (but still perhaps beneficial to society), I imagine a donation might have PR or social status value for the donor, and a donation for a particular cause/effort sounds better than some of the less-fashionable work of the nonprofit. Or the donor might want the PR/status of their name on a center, and want to make sure that the center has funds to keep paying PR/status dividends.

Oh, it’s good to be back enjoying a PG essay! :) Even if it is just a short message rather than a grandiose statement (maybe that’s the reason I like it).

I worked with nonprofits (and philanthropy advice in particular) for a long time and this is a great message to send. I don’t think it will change things much, as I don’t think PG has as much influence in the nonprofit world as he has in the startups world, but worth the shot.

And yet a constant theme I keep hearing on HN and other places is that “I would only donate if I could support X initiative at Y foundation”

Mozilla comes to mind here. People often claiming they would donate if they could support only specific parts of the organization.

This article shows there is much more nuance to think about here than just supporting a specific part of an organization

With Mozilla it's more that there is no way to donate money in a way where any of it will ever help the initiative (Firefox) you care about. Mozilla the foundation does not work on Firefox, Mozilla the corporation works on Firefox. Money flows from corp to foundation, not the other way around. So it's more of an issue of there being no non-profit that supports Firefox development. Or another way of saying it is that people don't like the current Mozilla mission statement and if it were different then they'd donate.

> People often claiming they would donate if they could support only specific parts of the organization.

I think this may simply reflect lack of faith in Mozilla as a nonprofit. People don't trust them to use an unrestricted donation in a way that they think is good.

This highlights an issue that the article doesn't touch: how to choose trustworthy donation targets?

It implies you should not to trust places with your money if you don't trust them to allocate it, which is correct, but how to know who to trust?

I generally stick near-exclusively to GiveWell as a result.

https://www.givewell.org/

Each year they use a small fixed percentage of donations to research the most human benefit per dollar spent, and then use the remainder on that one single thing, maximizing the positive impact per dollar. The only thing the donor needs to know is that they have it handled. Any money you give them will go 100% to the thing they have determined is maximum impact that year. (One year recently it was mosquito netting, to prevent malaria, if I recall correctly.)

This might sound like an ad but I'm not affiliated in any way, just a happy donor who is glad they exist.

I second this. I've been giving to GiveWell's top-recommended charities for about 10 years now (10% of my income - see Giving What We Can).

Please give your money to charities that are cost-effective - ones that have research-proven ways of helping others (and thus help the most per dollar given). Rather than doing your own research, it's worth trusting GiveWell (with their 10+ years of focus on finding the most cost-effective charities).

Wow. A Paul Graham essay I completely agree with. Will wonders never cease? :-)

Am mid-founding a startup which will give 5% of its profits to charity from day 1. Customers won't have a choice about this - either the amount or the charities chosen - so this will be intrinsic to doing business with us. Trade with us if you like that, don't if you don't. Will be on a tiny scale compared to the donations PG refers to, but customers (who are donating indirectly) will have to trust us, while we trust the charities we give to. There's no meddling or options to choose from, by design, for the same reasons PG describes.

"Unfortunately restricted donations tend to generate more publicity than unrestricted ones. "X donates money to build a school in Africa" is not only more interesting than "X donates money to Y nonprofit to spend as Y chooses," but also focuses more attention on X."

Seems like you could arrange the donation, get the charity to tell you what it would be for, and then use that as the announcement. You might get less attention getting descriptions, but I feel like it would still be net-moral to get a little creative with how you described it.

> Many donors may simply never have considered the distinction between restricted and unrestricted donations. They may believe that donating money for some specific purpose is just how donation works. And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors.

In other words they smartly are thinking they don't want to kill 'the sale'. When businesses sell products do they typically list all the potential downsides or defects in their product or service when doing so might discourage the purchase?

Maybe as I said in my other comment they realize that less money would come in because they would rain on a parade going on in someone's mind.

Example let's say someone wants for vanity purposes (an entirely valid reason) to have a building named after them. The non profit (could be a school or some research institution) then says to them 'well you know we can do that but why don't we put the money toward this cause instead after all why does it have to be about you and your family name being perpetuated!!!?'.

That's an exaggeration sure (in terms of how the words would go. However principle is that the person donating would then have a negative ie 'the wrong reasons' attached to what they were convincing themselves was a selfless act.

"And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors."

Nonprofits can be realistic about this without being cynical about it. I worked with a very good nonprofit that had the fundraising mantra "don't give until it hurts, give until it feels good." As in, recognize that donors give because giving makes them feel better about themselves and the world they live in, and that's OK and something to encourage -- you just have to connect it to the mission.

That means, yeah, you have to take restricted funds and do benefit dinners and other partially-wasteful stuff, and you have to emphasize the photogenic parts of your work more than others. But more importantly, you have to clearly tell the story about your theory of change to your donors, so you're attracting the right donors and educating them to support your mission. They're the "right" donors because the more they learn about how and why you're spending their money, the better they feel about themselves and the world. That sets up a virtuous cycle where you're adequately funded and you're incentivized to do better at your actual mission so you have more to share back.

If you get _that_ wrong, and your donors feel good about their donations for fundamentally different reasons than what you're actually spending them for, that's when you end up with funding undercutting the mission.

Here is an essay showing how women's higher education in the U.S. was boosted by restricted donations to universities: https://www.jamesgmartin.center/2021/02/feminist-college-fun... .

Nice counter-example from 1890 from article (condensed and paraphrased by me):

Johns Hopkins University wanted a medical school. It could not afford it, but had said they needed $500k.

Garrett, a lesbian, collaborated with her partner, M. Carey Thomas, and they successfully raised $100k and offered it to Hopkins on the condition that the medical school admit women “under the same terms as men.”

Hopkins’ trustees accepted the gift and the conditions the donors imposed and said they would invest the money until the rest of the $500k was sourced.

Hopkins president Daniel Coit Gilman then frantically tried to return the money. Although he never explicitly said so, Johnson suspects that was because he wanted the medical school to only admit men. “You do not realize Mr. Gilman’s grim determination,” Thomas wrote to Garrett, “it is with him a death struggle & money means nothing to him.”

In December 1892, Garrett made a second offer. She noted the fund given in 1890 had risen to $200k, and said she would donate the remaining $300k, provided the school would admit women on the same terms as men.

In 1893, the Hopkins trustees caved and accepted Garrett’s donation unconditionally. The Johns Hopkins medical school became a national model.

I like to donate when I know a person involved. I find it hard to trust an organization or title. I donate cash to the local food bank, which is run by neighbors. I donate to my son's college student organization, run by folks he knows. I donate to a guy I see on the street frequently, who has been camping since he became homeless in 1985.

It's wonderful that you're already donating non-trivial amounts. Would you have more trust if an independent charity evaluator spent over a decade vetting charities - picking only ones transparent enough that can be scrutinized, and then choosing only the most cost-effective?

See GiveWell for their research. When giving internationally, you can multiply the positive impact a thousand-fold (because it's much more expensive to help anyone in the richest country in the world).

I'm sure others are doing that. For my part, I take care of my neighbors. Because if we are never careful to do that, then it may never happen at all.

100% this.

SO much of what is considered "non-profit dysfunction" is a direct result of funders restricting donation utilization.

Only X% for opex, y% for capex, z% for comms, where x+y+z == around 5% of funds donated.

Can't run an organization like that well.

This is why billionaire philanthropy is such a scam. It's just a tax-free way for oligarch to create societal infrastructure that further entrenches their hegemony.

"If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all."

Years ago, I had a startup that was building software for non-profits. We spent a lot of time around them, talking to them, etc.

This problem of incompetence that PG briefly touches on is rampant to a degree that most would never realize. Most large NPs are more inefficient than you could possibly imagine with their money (if you don't believe me, go look at how much of their money goes to administration and how much the people at the top are paying themselves). The SMB NPs (the group my startup served) were typically run either by narcissists who's real goal was to look good to other people, or they were very non-business/money savvy and driven by passion (in a negative way). Both of these lead to poor decision making, one way or the other.

The narcissists tended to do everything they could to look good while doing almost nothing (think: hosting galas to raise "awareness" or finding ways to be involved with big important people, without actually furthering their mission). They looked great in the public eye most of the time and could flaunt their "goodness" while secretly treating their employees like trash behind closed doors.

Example: the director/founder of one NP I know of that had a mission of helping pregnant women in crisis forced her 8 months pregnant employee to walk for miles through DC and do manual labor for her. She chewed her out in front of the whole team for saying she wasn't physically capable and made her cry, demanding that she do something that was technically her (the director's) responsibility.

The non-business/money savvy person who is driven by passion at least has good intentions, but they let that passion run wild without tempering it. This leads to knee-jerk reactions and doing things just to do them, without taking the time to play the long game or even determine if the action they're taking is helping or hurting. It's the classic "give a man a fish vs. teach a man to fish" problem, where they don't slow down to look closer, and so find themselves perpetually addressing the crisis instead of the underlying issue, or creating sustainable solutions.

The NPs that manage to avoid these are so exceedingly rare in my experience that it has turned me into a cynic. I just assume that there's incompetence at play, and even outright abuse.

Anyway, I agree with PG, I just had to expand on that point because it almost felt like a footnote when IMO it is a huge part of the problem: finding good NPs to donate to unrestricted. Otherwise, you have to settle for incompetence and restrict that incompetence.

> Example: the director/founder of one NP I know of that had a mission of helping pregnant women in crisis forced her 8 months pregnant employee to walk for miles through DC and do manual labor for her. She chewed her out in front of the whole team for saying she wasn't physically capable and made her cry, demanding that she do something that was technically her (the director's) responsibility.

That sounds Dickensian to the point of parody. I would do whatever I could to raise awareness of that insanity to the board of any non-profit, were I to witness something like that.

A way of dealing with this issue that I've seen in the jewish community (I only have extensive experience there), is to provide sponsorship opportunities: a way for the donor to restrict the usage of their money and a way for the organization to get it where it's needed. While it doesn't cover everything, it can really help reduce the requirement for having donations that can be used for anything.

> If restricted donations do less good than unrestricted ones, why do donors so often make them? Partly because doing good isn't donors' only motive. They often have other motives as well — to make a mark, or to generate good publicity

Bottom line is this: It's a net loss for non-profits if there is a stigma that is attached to people who donate for in part 'the wrong reasons'.

Can't a non-profit say something like:

"Of course we can restrict your donation to X. But we're also happy to listen to what's most important to you and work yith you to develop a plan based on our expertise, and how ot fits into a larger story."

The hidden mesaage in there is not just "we know best" but also, "we can help you with the PR story or legacy or whatever you want".

Also important: donate regularly.

Ad-hoc donations make it difficult for a nonprofit to plan their budget. It forces them to spend a lot of that money to solicit more donations.

My friend made a tool to donate anonymously and regularly to non-profits: https://sublimefund.org/

Less spam, better for the non-profits. It's a good combination.

I help direct about $2.4 million each year to various parts of the world. We often receive inquiries about donating to a specific need or geographic location and we tell them no thank you.

If people believe in our mission and leadership, then they give without any qualifications to what it shall be used for. We provide accurate records, and reports of what the money goes to.

As a donor, I would appreciate that. It will help me decide whether to give money to charity A vs. charity B. There will always be someone willing to accept the donation.

PS: AFAIK, Religious institutions in USA are exempt from Form-990 so a donor wouldn't anyway know where the money is going.

Agree 100%. I wrote a short essay [1] about the problem why charitable donations cannot achieve the intended effect.

[1] https://snmishra.wordpress.com/2016/03/11/why-tax-deduction-...

Notably, certain types of organizations (i.e. CA public school PTAs) only accept unrestricted donations for some of these reasons.

The third restriction is 'purpose gifts' i.e. build a stadium and put my name on it, which seems entirely fair to me.

Build state capacity, pay taxes.

Yes, but until then, the dam is still leaking like a sieve, and any hole that can be plugged needs to be plugged.

Well I do pay taxes, but your strategy does raise the question of how well the state spends money. There are many people in the world who, for good reasons, neither trust their government to spend the money well, nor feel they have any realistic chance at improving the problems in their government. Government money is often a big target for corruption, and just as malware tends to get written for the software with the biggest market share, corruption tends to accumulate wherever the most money is.

Not so long ago the author warned that non-profits are a "magnet for sociopaths" because "their defining feature is to make no profit" and there's "no intrinsic accountability". (https://twitter.com/paulg/status/1124254508232663040?lang=en). I thought this was an odious and wrong thing to say for many reasons and it made me think that while he clearly has a lot of experience with non-profits of a certain kind or scale or connection to tech VC, maybe it's not so broad-based. And it's hard for me to square this attitude with this new blog post: If there's no intrinsic accountability, then how do unrestricted gifts help? Shouldn't gifts provide some of that accountability? The best interpretation I can come up with is "Apply very strict conditions to where you decide to donate, but when you do, do it unconditionally".

One of the reasons I give big cash envelopes as gifts to be deployed as recipients see fit. I do offer symbolic gifts, or small cute things, but when the monetary value of the gift is large, I give cash.

When I worked in gift cards one of their benefits was a way to give to people with destructive habits without enabling them. Though hardcore addicts would just sell the cards for cash anyway.

This is basically correct. Restricted donations are a goddamn pain in the ass. If you trust a charity is doing stuff you like, just trust them to spend the money doing stuff you like.

As a corollary if you feel like you want to make a restricted donation to a particular organization, don’t donate to that organization. Find one that’s better aligned with your values.

Better yet, re-align your values towards "help as many individuals as much as possible with the limited funds available". It's often the case that there are more cost-effective ways of helping people.

Preventing people from getting malaria costs very little - so much cheaper than trying to cure a single individual from cancer (for example). Suffering is suffering, and it shouldn't matter whether it happens in your country or another. Help as many as you can by being cost-effective (see GiveWell for research).

Wow, P.G. almost gets it. The most unrestricted donation is paying your damn taxes. Get rid of the philanthropy loophole, raise the taxes, and lets invest our surplus democratically.

the nassim taleb heuristic here comes in handy:

When solicited for charity funding on the literal street, usually by a young person, he always asks the that young person

"are they paying you to work here?"

If yes, he won't donate. The simple logic is, if the charity's mission is strong enough, someone will volunteer his/her own time to solicit donations. Being paid to stand there is a signal (a filter) that the cause is not strong enough. Therefore, you pass.

Restricted donations can keep the nonprofit from changing is focus. For instance, the ACLU is wavering in it's defense of free speech - if I were to give money to them, it wiuld have to be structured to support the defense of all speech regardless of content.

Why does he write like an SAT reading comprehension passage

It's called an essay, my good man.

I strongly disagree with this. If I were donating a large sum to a non-profit that helps poor children, I would absolutely earmark it with a stipulation that it must be used to help poor children who grew up as I did (poor, no opportunities for other aid/scholarships because, well we all know why).

In any nonprofit or mentorship situation, I always make sure to reach the children who grew up like me because they truly have no means of assistance.

Aren't you already choosing to donate to a non-profit that is focused on this mission? If they're mission-focused, they presumably know how to best spend their money to support that mission.

No, because there are literally no organizations that would have helped children like me. Not a single one.

Sorry if I sound harsh, but I wonder if such a donation will be purely to satisfy one's ego. We give donation because we believe in the cause and feel good by donating. When I give donation, I give it unrestricted and sometimes even if it is not tax deductible.

From the outside, it really looks like it's more about you than it is about helping anyone else.

But the end recipients are getting the money, so who cares?

Are they? Or is it sitting there in an account labelled "children named Tom who live in a town of between 10,000 and 11,000 people and got a C in math in 2003"?

Because the charity knows how best to spend it, not you (as explained in the essay).

They don't though, they just think they do. Their goals are largely motivated by current politics.

I would agree with this. In my youth experience as well, politics in relation to non profits determined if you were housed/fed.

Would nudging tax rates a little higher on the highest income brackets and Congress taking steps to close the many tax loopholes that companies exploit to avoid paying their fair share of corporate taxes in this country not also help fix this vexing problem?

As usual, the question boils down to whether or not you prefer monopolists like Bill Gates who "beat the charges" back in 2002 or polluters like the Koch brothers deciding what "good work" gets done ... or the brilliant intellectuals that we elect to Congress like this beauty:

https://www.thenation.com/article/archive/aoc-republicans-li...

Tough choices for sure.

This assumes that the nonprofit has the same goals as the donor so it’s not always true. Maybe that would be covered by the umbrella organization bit, but sometimes there’s no organization that cares so donors need to leverage existing ones to fund what they want.

Most people let companies donate with their money... i.e.: Mcdonald boxes at the cash register...

So, let's unwrap this.

You make some money. Which is taxed in various ways. The pie gets bigger, the state (and the People) are getting a cut.

Then you are told you should do more. And you also think, well, why not help the world?

Then you are told: but don't waste your time volunteering at a shelter -- better work and donate your money instead.

OK, so you don't get the satisfaction of seeing the humans you help but you know that at least your donation helps, maybe, the same humans you want.

A restricted donation gives you some agency into improving the world. You are still abstracted away, you don't really see the humans you are supposedly helping, but at least the money only goes into improving the world into some dimension that needs improving and that you consider relevant.

But no, what you must do is just donate unrestricted. That is, have no agency, have no interaction with actual humans in need, be just a wallet that helps, maybe, something as defined by the entity that receives the money. Your only choice is who spends it and how much to give them.

At this point, how about we bring this to the logical conclusion that THERE SHOULD BE NO NONPROFITS. Clearly, if those with the already taxed money can't have an opinion, why should those nonprofits know what's what? You know who could spend the money: the State!

So, abolish non-profits, and make the State as the sole decider of how things get spent. Then you can donate unrestricted to the State or just push for some taxes being raised.

> but don't waste your time volunteering at a shelter -- better work and donate your money instead.

Bad advice.

Volunteering is vital. I'm not sure why anyone would argue otherwise.

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