What it looks like
Consider a donor paying for a clinic they do not use. The people served may know about its accessibility and quality, while the donor relies on reports. If their experience and the measured outcomes do not reach funding decisions, a feedback loop is missing. This example illustrates a mechanism; it does not measure how often it occurs.
Why it happens
In many purchases, the buyer can use and assess the service. In donor-funded services, the payer and the person served can be different people. The legal scholar Henry Hansmann named the general version of this “contract failure”: the people paying can’t easily see what they are paying for. Charitology’s hypothesis is that this gap can make visible signals, such as stories or cost ratios, more influential than harder-to-observe results.
Charitology treats this as a central mechanism in its Diagnosis. The claim that it causes the other conditions remains a hypothesis.
No one is to blame
The question is how reporting, listening and funding rules work together. It is about the design of those rules, not anyone’s character.
What we don’t know yet
How much money would move if results reached donors as clearly as prices reach shoppers? And what mechanism could let the people served send a signal that moves money? Those are Open Problem 5, Closing the Feedback Loop, and Open Problem 4, the Counterfactual Problem.
Results travel back to givers as clearly as prices travel through a market, and the people served can send a signal that moves money.