First Gen American asks:
When giving, is it better to give one large lump sum or more frequent smaller quantities. I have opinions about this if the lump sum covers a big portion of a not for profit’s annual operating expenses.
Well, this depends on what your purpose in donating is for, and whose utility you are trying to optimize.
If you ask charities– they would like you to take the lump sum and turn it into a monthly payment that they know for sure they’re going to get each month. They say they would rather have a predictable monthly stream than unpredictable lumps of the same amount. I’ve seen an academic presentation on the topic. (I can’t remember the details though. It had something to do with spending and endowments and how to know how much to spend vs. save as a non-profit.) That said, some fundraisers don’t even bother with small donors because small donations are more expensive to process than are large lump sums.
If you’re talking about what is optimal for *you*, then if you’re donating to get a warm glow, frequent small quantities are going to give you more dopamine hits than just one will.
You also get to keep money longer and any interest that accrues on it if you do smaller frequent quantities. That said, you have to actually *remember* to donate and that you’re donating so if you have trouble balancing a monthly checkbook one lump sum is probably safer.
If you want to have a bigger say in what the non-profit does, a larger lump sum is more likely to attract their attention and their willingness to serve your wishes than are smaller quantities.
Grumpy Nation: Do you think it’s better to give one lump sum or prorated monthly amounts?