Agreed about nobody saying they prefer local art over thousands of lives, but I don't think that means their revealed preferences are more representative of what they really want, I think it just shows how irrational they are. Most people don't sit down and think about what they want most and construct a plan to achieve that, so it shouldn't be surprising that they end up doing such drastically sub-optimal things as donating a lot of money to a museum when someone asks them to. It seems like a good thing to do, so they do it. They don't consider whether it's what they actually most prefer.
Agreed about the importance of making sure you donate to the right charities, which is why I was disappointed to read this: "And, to begin, they have sprinkled $1 million on Silicon Valley nonprofits that focus on everything from urban forestry to homeless families."