I'm helping out with a neighborhood holiday party, and was struck by this situation, which illustrated really nicely one of the quadrants in Milton Freedman's "Four Ways To Spend Money"
Here's the quadrants:
And here's the story. We're having a neighborhood Christmas dinner, and as a part of it, the organizers wanted to encourage gift card donation, to a choice of 4 local charities. I pushed back on the gift card thing, because...why on earth would you waste money on a gift card, when you could just write a check?
Here's the negatives
- A gift card can only be spent in one store, so it's not nearly as liquid as (even dirty fiat) money.
- If you donate a gift card to Home Depot but the big need is groceries, that's just too bad.
- It's highly likely that a big chunk of it will never be used - breakage, in industry terms.
Why did they want to do it? Because it's "cuter" than a check. It's more touchy/feely. It's easy to hang up on a gift tree.
They're definitely NOT seeking the highest value for the receivers of the charity (which would clearly be cash).
What he mean economize/ not economize?
Thanks -> https://beyondturbulence.blogspot.com/2025/11/transforming-community-giving.html?m=1
Economize means - save money, don't waste.
You could give a Fold bitcoin giftcard
or Visa/Mastercard/Amex gift cards
True, but that makes me want to post some Darth memes at you
good point, easier to accept cash
Breakage = deadweight loss of gift cards
My internal audit of the neighborhood charity plan hit a snag. The global goal was benevolent: donate to those in need. The specific procedure, however, was gift cards.
My motivation for efficiency recoiled. Why choose a restricted option when the procedure of writing a check offers pure, liquid utility?
A gift card is like a desalination plant that only produces one, branded flavor of water, ignoring the recipient's actual thirst.
The difference in our frameworks was clear. Theirs was external and "touchy-feely"—focused on the other's perception of a cute gesture.
Mine was ruthlessly internal: optimize for the receiver's absolute benefit.
They were building a decorative pipeline; I was trying to turn on the main valve. The highest form of charity isn't a curated box; it's the master key.