Investing in Good Deeds Without Checking the Prospectus

New York Times, June 15, 2006

Donors to charities, it seems, do not behave rationally. Increasing evidence shows that donors often tolerate high administrative costs, fail to monitor charities and do not insist on measurable results — the opposite of how they act when they invest in the stock market.

The charitable sector now represents more than 2 percent of gross domestic product in the United States. So, improvements could bring significant value to American higher education, religion and the arts, which have come to rely on donations.