Asymmetrical Information

This is why rand hated the cult of altruism so much.

I bet the net economic effect of that "charity" on the lives of children in afghanistan is negative-- I bet they do far more damage than good, in part because they don't understand economics, and in part because helping children in afghanistan is not the purpose of the organization (its their excuse.)

Out of idle curiosity, what does it take to donate securities? Just a form that they're not used to filling out, or is it something more exotic?

I'll keep your answer in mind until the late nineties repeat themselves, thus allowing me to have appreciated securities again. =)

if you're really, really interested in how donations of all kinds work from the receiving end, i would recommend subscribing to this listserv:

http://hermes.case.org/cgi-bin/wa.exe?SUBED1=fundsvcs&A=1

or at least check the archives. i had no idea so much went in to it.

This is why rand hated the cult of altruism so much. I bet the net economic effect of that "charity" on the lives of children in afghanistan is negative-- I bet they do far more damage than good, in part because they don't understand economics, and in part because helping children in afghanistan is not the purpose of the organization (its their excuse.)

Actually, Rand (I recall from reading her in my younger, more naive days as a rightist) felt that altruism moved resources from the deserving to the undeserving, punishing people unfairly while making society work less effectively in the process. Her criticisms had little to do with incompetency in execution of the altruism itself, and rightly so. This is irrelevant, unless there is some reason that altruistic organizations automatically attract poor organizers, planners, ground workers, etc.. There is little reason to believe this, though there is lots of reason to believe that in a capitalist society, these organizations are going to have trouble paying high salaries, and therefore are going to have trouble recruiting talent.

In American and other western societies governments attempt to offset the financial disadvantage by providing grants, for foreign aid, community development, artistic endeavors, and so on. In America they also provide grants for small businesses (the SBIR program), incidentally. This all seems to be a good idea, though Rand made it clear that she was categorically against such things (illustrating, however, only with extremes, which are sadly uninformative for real world cases). However, as highlighted by much criticism, explicit or implied, of charities and also organizations like the UN on this blogboard, they don't always work. This could be seen as an argument for simply abolishing these organizations, or for finding out whether there is something wrong in how the money is given out, and seeking alternate means to for such organizations to operate and perpetuate themselves.

The CD-selling guy "Leif", who operates from 213.114.30.59, has had his comment deleted and the IP banned.

Matt- in case you were serious:

The charity doesn't have to do much. They can have the securities moved to their own brokerage account and liquidate them (most do this) or they can have the sending broker liquidate them through a "gift disposal account". They then have to write a letter confirming the proceeds. As a matter of course every year I move my gifts to a disposal account (thereby getting them out of my control), contact the charities and ask them whether they want proceeds (net of brokerage) or the securities themselves. Either way, the mean value on the date the securities left the donor's control is the contribution value.

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