Why You Don't Want Impact = Profit

The author argues that Impact = Profit, a rule for retroactive public goods funding that pays a project extra until its net profit matches its measured impact, is unsuitable because profit can be gamed. Using a magic pizza shop example, the article shows that an owner who also controls a supplier can raise ingredient costs, lowering reported profit so the funder must pay more while the owner's takehome rises. The article proposes Impact = Funding as an alternative, where funders pay a set amount per unit of impact, which keeps incentives to minimize costs.