Beyond the balance sheet, the act of giving generates a unique dividend for the investor.
In the conventional ledger of philanthropy, the accounts appear straightforward. Capital flows in one direction. Donors, whether individuals or institutions, allocate financial or human resources to a chosen cause.
The return on investment is tallied in social good: lives improved, ecosystems preserved, knowledge advanced. Any benefit to the giver is typically recorded as reputational enhancement or moral satisfaction.
This model, however, is incomplete. It overlooks a fascinating and powerful anomaly observed in the micro-dynamics of fundraising, particularly for causes with significant social externalities.
Author's summary: Strategic philanthropy generates unique dividends.