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Mysterious Charity Utility Functions July 15, 2007

Posted by David Bookstaber in Human Markets, Open Questions, Social Politics.

In regards to personal consumption I am rarely baffled by the choices people make: I may not agree with their priorities, but I can usually imagine some combination of values (and ignorance) that lead to, for example, spending into debt to acquire name-brand apparel that will only be used for a season.

But when it comes to large charitable donations I am often at a complete loss.  When someone has seven, eight, or nine figures to donate to any cause of their choosing I assume that they give careful thought to all of the possibilities and then select a subset that has the greatest utility to them.  But why do so many millionaires value things like sports, higher education, or the arts more than basic human welfare?

Michael Linton in the weekend WSJ explains that symphony orchestras are increasingly surviving — and thriving — primarily on the donations of patrons.  I previously wondered why the world needs more than a handful of performing orchestras.  This news also leaves me wondering why someone with substantial charitable capital would spend it to maintain a large group of perfoming musicians?

What leads someone to think that it is better to spend millions of dollars paying disciplined people to play instruments instead of say, building potable water infrastructure in Africa, providing basic education in the third world, or sequencing a genome?


1. federalist - August 5, 2007

Billionaire Bill Gross answers my question:

When millions of people are dying from AIDS and malaria in Africa, it is hard to justify the umpteenth society gala held for the benefit of a performing arts center or an art museum. A thirty million dollar gift for a concert hall is not philanthropy, it is a Napoleonic coronation.

2. federalist - September 12, 2007
3. federalist - July 17, 2008

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