Fanaelialae
Legend
IME, it just doesn't work as well. Give the PCs an option to help build the library and they'll typically balk on the grounds that they have more pressing matters to attend to.If you have no other use for the money, and you are "investing' it, that means you are basically using money as a player coupon for "give me Plot X that I want to engage with". Why not just give the players those anyway, without connecting it to currency?
We could look to designs like Gloomhaven uses - it has cash the party can use for buying stuff it needs, but it also has Prosperity for the area that player actions impact.
Give them the option to donate an absurd sum to build the same library, and many players are happy to throw gold at the problem with no more return on that investment than a case of the "warm and fuzzies".
In fact, I've noticed the same tendencies from myself, when I'm a player.
As for why not give it away for free? It just doesn't have the same impact. There's a more visceral sense of investment if the player donates the money to the orphanage, rather than if the townsfolk are simply thankful to the PCs because they chased the bugbears away and allowed the villagers to rebuild the orphanage (but without a monetary investment from the players). If you give it away for free it loses most of its value.