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michaelcurzi comments on Seeking advice on a moral dilemma - Less Wrong
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Your answer is reasonable. I think I found a better one.
I found the money in a small purse. I removed the money, and left a note with my email address in it. I returned the purse to the front desk.
If I get an email, I can get the person the money - through PayPal, meeting at the hostel, or mail. This solution also eliminates the possibility of the hostel taking the money, unless someone from the hostel emails me impersonating the person who lost the money. On the off chance that I don't get an email, I will enjoy it, donate it, or do whatever I would do with my own money.
Thoughts?
You could also burn or shred the money to minimize conflict of interest.
Voted up :)