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Eliezer_Yudkowsky comments on Money: The Unit of Caring - Less Wrong
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Did you just prove that in the absence of trustworthy auditors believed to be trustworthy, the Dark Side always wins because it invests more resources into future growth?
Auditors are only one of the ways that the Light Side Charity can distinguish itself.
I think this is a signalling problem; the Light Side Charity needs to find a visible activity that it can do more cheaply than the Dark Side Charity, and invest sufficient effort into that activity to distinguish itself.
wasn't that obvious?
It is never obvious that the Dark Side wins.
If we're talking about replicators versus fun theorists, then in this circumstance the rational fun theorist will grow as fast as possible (since it is possible) up until exponential growth hits a barrier, and only then begin devoting any resources to fun. It still loses to the replicator but not by much.
Among humans the Light Side will use generally different tactics and will seek other advantages.
In this particular case, the Light charity is like a bacteria that you've engineered to produce a desired protein that you want that is not needed for its own survival. When you put these bacteria in a bioreactor, mutations inevitably take some back to the wild type, which don't make that protein but put all their energy into reproduction. They quickly take over the bioreactor and drive the "altruistic" bacteria into extinction. This is not a PD case where some equilibrium arises between exploitation and cooperation. Without some countervailing force not specified here, exploitation wins.