I agree with much of this post, but find a disconnect between the specific criticisms and the overall conclusion of withholding funds from SI even for "donors determined to donate within this cause", and even aside from whether SI's FAI approach increases risk. I see a couple of ways in which the conclusion might hold.

1. SI is doing worse than they are capable of, due to wrong beliefs. Withholding funds provides incentive for them to do what you think is right, without having to change their beliefs. But this could lead to waste if people disagree in different directions, and funds end up sitting unused because SI can't satisfy everyone, or if SI thinks the benefit of doing what they think is optimal is greater than the value of extra funds they could get from doing what you think is best.
2. A more capable organization already exists or will come up later and provide a better use of your money. This seems unlikely in the near future, given that we're already familiar with the "major players" in the existential risk area and based on past history, it doesn't seem likely that a new group of highly capable people would suddenly get interested in the cause. In the longer run, it's likely that many more people will be attracted to work in this area as time goes on and the threat of a bad-by-default Singularity becomes more obvious, but those people have the disadvantage of having less time for their work to take effect (which reduces the average value of donations), and there will probably also be many more willing donors than at this time (which reduces the marginal value of donations).

So neither of these ways to fill in the missing part of the argument seems very strong. I'd be interested to know what Holden's own thoughts are, or if anyone else can make stronger arguments on his behalf.