[0d311]

Re: your first point

I don't think it's an attempted solution to a problem of efficient wealth transfer, I think it's an attempt to solve the issue of marketing a charity. Any charity's argument is essentially 'give us your wealth so we can do something good with it for people who do not have wealth'. Being able to reduce the cost for donators to something as low as the cost of electricity and the simplicity of downloading and running an app seems like a viable strategy for targeting a much wider audience of donators.

That's not to say it will succeed, or that there aren't other issues with this idea. But I do think that it is a good idea to try to target people who wouldn't be making a direct donation anyways.

[smallnamespace]

The problem is the extreme inefficiency of the trade-off. That electricity is probably being converted to Bitcoin at a much worse exchange rate than a large miner would get, so we are essentially wasting electricity in order to give the donor a better story than giving directly.

[dragonwriter]

Charity donations are driven by lots of things that are inefficient but provide a better story. The inefficiency is, in effect, part of the cost of marketing a charity.

Charity fundraising is about maximizing net donations, not maximizing donation efficiency. There may be some causes where the potential donor pool is such that the latter is important to the former, but, irrational as it may be, it's generally not.

[smallnamespace]

> Charity fundraising is about maximizing net donations, not maximizing donation efficiency.

In any other domain, I would agree with you, but charities are at least theoretically about maximizing total gain to society, not just the narrow interests of the charity organization itself.

Doing the equivalent of the broken window fallacy in order to capture a larger share of nonprofit donations is literally the definition of organizations turning parasitic and no longer serving their original purpose.

This is why competent nonprofits are judged by metrics like administrative efficiency nowadays.

[dragonwriter]

> In any other domain, I would agree with you, but charities are at least theoretically about maximizing total gain to society,

No, they aren't. That is government.

Charities are organized for a specific identified charitable purpose and are generally not, even in theory, any less narrowly focussed on that identified purpose than a for-profit firm is on serving the common, usually financial, interests of it's stockholders.

> This is why competent nonprofits are judged by metrics like administrative efficiency nowadays.

The administrative efficiency measures used by outlets like Charity Navigator are feel-good metrics that favor unevaluated, uncontrolled funnelling of money in the hope of achieving the notional objective. A real charity efficiency measure would measure its cost-effectiveness at achieving outcomes that are its charitable purpose, not administrative vs. program funding measures (and, as a consequence, would probably only be directly comparable within the same domain.) Administrative efficiency is used because it's cheap, easy, and portable across domains, not because it's even remotely meaningful.