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. However, this model is incomplete, as it overlooks a fascinating and powerful anomaly observed in the micro-dynamics of fundraising, particularly for causes with significant social externalities.
The return on investment is tallied in social good: lives improved, ecosystems preserved, knowledge advanced.
Author's summary: Strategic philanthropy generates unique dividends.