Two issues are at play here:
Risk of ruin. Diversifying is a good idea as an investor because if all of your investments fail, you are ruined. If you're a philanthropist, you aren't ruined if all your donations fail to do good things.
Negative correlation of returns. Hedges are a good idea if you know two vehicles are likely to move in opposite directions- that way, by picking both you'll go up in more situations than if you just picked one.
I'm not sure the second is a strong issue for charities.
Note that the risk of charitable assistance not helping can also matter to the giver when they would have been among those helped - for example, when considering asteroid deflection charities, or disease research charities.
As I understand it, the psychology of charitable giving means that this is quite often the case in practice - people tend to support charities whose work also happens to benefit them, their sick relatives, their pets, their gender - or whatever.
Related: Purchase Fuzzies and Utilons Separately
We genuinely want to do good in the world; but also, we want to feel as if we're doing good, via heuristics that have been hammered into our brains over the course of our social evolution. The interaction between these impulses (in areas like scope insensitivity, refusal to quantify sacred values, etc.) can lead to massive diminution of charitable impact, and can also suck the fun out of the whole process. Even if it's much better to write a big check at the end of the year to the charity with the greatest expected impact than it is to take off work every Thursday afternoon and volunteer at the pet pound, it sure doesn't feel as rewarding. And of course, we're very good at finding excuses to stop doing costly things that don't feel rewarding, or at least to put them off.
But if there's one thing I've learned here, it's that lamenting our irrationality should wait until one's properly searched for a good hack. And I think I've found one.
Not just that, but I've tested it out for you already.
This summer, I had just gone through the usual experience of being asked for money for a nice but inefficient cause, turning them down, and feeling a bit bad about it. I made a mental note to donate some money to a more efficient cause, but worried that I'd forget about it; it's too much work to make a bunch of small donations over the year (plus, if done by credit card, the fees take a bigger cut that way) and there's no way I'd remember that day at the end of the year.
Unless, that is, I found some way to keep track of it.
So I made up several jars with the names of charities I found efficient (SIAI and VillageReach) and kept a bunch of poker chips near them. Starting then, whenever I felt like doing a good deed (and especially if I'd passed up an opportunity to do a less efficient one), I'd take a chip of an appropriate value and toss it in the jar of my choice. I have to say, this gave me much more in the way of warm fuzzies than if I'd just waited and made up a number at the end of the year.
And now I've added up and made my contributions: $1,370 to SIAI and $566 to VillageReach.
A couple of notes:
Let me know if you start trying this out, or if you have any suggested improvements on it. In any case, may your altruism be effective and full of fuzzies!
ADDED 12/26/13: I've continued to use this habit, and I still totally endorse it! A few addenda: