Suppose I have some money that I don't want to spend, and I'm sure I'll never want to spend it. Should I give it to charity now, or put it in an index fund and bequeath it to charity in my will? Here's my argument in favor of charitable procrastination. The typical recipient of charity does not have access to the kind of investment opportunites (e.g., low cost U.S. mutual funds) that I have, and his other investment opportunities usually have a lower (perhaps even negative) rate of return. Charitable organizations are legally forced to spend a certain percentage of their assets per year, so they can't invest the money indefinitely either. By holding on to my money, I'm actually increasing the present value of the gift from the perspective of the recipient. Can anyone find a flaw in this argument?
Typical charity recipients also do not have access to borrowing opportunities that are as efficient as the ones available to you. So yes you could help them by delaying charity to people who would like to save, and borrowing money yourself to give money to people who would like to borrow (and then not giving them as much later). But unless you have a way to tell which charity recipients fall into which class, it is hard to see how to help them overall.
Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323
