I assume that one reason individual donations can be especially valuable is if they free FHI researchers up from writing grant proposals so they can spend more time doing actual research.

Correct.

In fact, it might be the best use of additional funding for FHI. An additional 10 hours of x-risk work (rather than grant-writing) from Nick Bostrom or Stuart Armstrong is hard to beat in terms of x-risk reduction purchased per dollar. (The other 'core' FHI researcher, Anders Sandberg, seems to do x-risk work less frequently than Nick and Stuart.)

Similarly, at SI we're always trying to find ways to spend money to "free up" Eliezer, since additional hours of x-risk work from Eliezer are also very hard to beat in terms of x-risk reduction purchased per dollar.