by Jason1 min read20th Dec 202213 comments
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I started donations today to two smaller EA nonprofits, but noticed that both had seemed to set up donation platforms in a more expensive way than necessary. I wrote both organizations (which I won't name) and will complete donations to both. But I thought it was worth noting that optimizing fees could be low-hanging fruit. In addition to saving a few percent of donations, donors really don't like the idea that a non-trivial chunk of their donations will be consumed by credit card companies and platforms. 

Some options to consider in the US for organizations with 501(c)(3) status:

  • Meta doesn't charge platform fees or credit card fees for donations made in Facebook fundraisers or through Meta Pay, whatever that is. I believe those route through the Network for Good DAF. A small nonprofit I advise (which is not part of the EA community) keeps a link to a current Facebook fundraiser on its homepage for exactly this reason.
  • Paypal doesn't charge platform or card fees for donations made to its DAF through its Giving Fund, which routes funds through a DAF into the charity's coffers. TLYCS is set up with them, for instance. My understanding is that, even if you don't want to go that route, Paypal rates are somewhat lower for charities than the default rates if you get that set up.
  • I am less confident in -- and haven't recently researched -- the best solution for donors who don't want to go through Meta or Paypal. Donorbox is generally 2.3% for ACH transactions, 3.7% for cards, so that is worth checking as a benchmark against whatever an organization is using.

Although I'm sure various platforms offer various advantages to organizations and donors, my guess is that many EAs will be drawn to methods that reduce/eliminate fees if those do not involve any additional marginal work for the organization. My own reaction as a donor is to be impressed/pleased when an organization displays awareness about how to minimize transaction costs. (I am aware that I should be considering any extra cost to the organization, e.g., from handling paper checks, but it's not obvious to me that there would be any from the three options listed above.)

So even if an organization decides to use a more expensive platform on its website for features or other reasons, it may still make sense to sign up for something more efficient as a secondary pathway and promote that where appropriate (e.g., on this forum during giving season).

Strong upvoted mainly to incentivise accompanying the pointing out of a potential problem with i) acknowledgement of counter-considerations and ideally ii) some contribution to the solution.

https://www.every.org/ is another free platform I've found through this forum

Hot take: For posts not involving breaking news that may benefit from cooler reflection, the Forum should trial allowing a poster to petition the mods for a quiet period of 1 to 7 days before comments are allowed. This would need to be done pre-posting and a header would need to appear at the top of the post. For example, I think discussion on the Doing EA Better post would have benefitted from a quiet period.

I'm hesitant to extend the trial to breaking news because the risk of the delay being viewed as mods cutting off discussion is higher, and because I think people have a stronger interest in being able to promptly discuss stuff that happens externally to the Forum. Finally, no one "owns" breaking news, and the requirement for both the post author + a mod to concur is a safeguard against erroneous imposition of quiet periods.

I have thought about this, but concluded it had a big problem, which is commenters would just write their own top-level posts in response (rather than giving the original post a huge first mover advantage). I don't think recent drama would have been improved by a proliferation of top-levels.

Random thoughts on grants (inspired by some recent posts):

  • Do (m)any grantmakers offer participation grants for certain unsuccessful grant applicants who submitted grants in good faith, to (help) defray the time and expense of applying? I briefly floated this idea at the end of a discussion about grants in medium-income countries, and I think it ties into a recent discussion about compensating applications for work trials to some extent.The grant-seeker and the grant-maker are semi-cooperatively producing a joint product of sorts -- a good grant portfolio. Both incur costs to make that product happen. It seems that common practice is that the grant-seeker and the grant-maker both bear their own costs for unsuccessful grants, but I can't think of any a priori reason that should be case vs. a potentially more satisfactory allocation of the burden. 
  • And in the recent discussion about work tests, the consensus was that job applicants should be (and generally were) compensated for trial tasks that took a few hours -- even though many of those tasks are standardized and thus do not have any substantive value for the would-be employer. Rather, they only have value to the semi-cooperative joint product of hiring the best employee. Even though both candidate and employer benefit from that process, we have (correctly, in my view) decided that the employer should bear more of the costs of the matching process by compensating the candidate for work trials.
  • Providing some minimal compensation for most unsuccessful applicants would presumably encourage more grant applications among the group to whom the offer was extended. The initial suggestion was to presumptively give such compensation to applicants from low/middle-income countries for various reasons, but one could imagine other objectives for selectively boosting applications (e.g., trying to encourage more applications among groups underrepresented in EA).
  • In my field (law), the court can kick out your case-initating document in a few different ways. That can include "with prejudice" (i.e., there is a fatal flaw that you can't fix), "without prejudice" (i.e., you may be able to fix the weakness and can try again), or without prejudice to refiling after a certain event (e.g., you didn't follow the proper process at the administrative agency but can come back after you complete those). For grantmakers who don't want to offer more complete feedback, even knowing which of those categories a rejection generally falls into would be helpful, e.g.:
    • We just don't think this is a viable idea absent a significant change in circumstances. You should consider moving on to another one.
    • We don't think you are the right person for this idea. You should consider moving on to another one.
    • We think you need more experience. Consider reapplying once you have it.
    • There's nothing  wrong with this grant proposal, it just didn't quite clear the funding bar this year (although it might have in prior years and might in future years).

Re: participation grants - I don't know if I like the suggestion or not, but I want to point out that it's significantly different from compensation on work tasks, in that paid work tasks are not the first stage of a hiring process. So orgs have control over who gets to do the work task to begin with. This probably reduces the number of people only doing it for that compensation, if not eliminating those entirely. With participation grants, this is IMO a problem you'll encounter.

Agreed -- I tried to account for this with weasel words like "most," "good-faith," and "presumptively." 

I know at least one of the prize contests this year offered participation prizes for good-faith submissions (e.g., GiveWell awarded 39 $500 participation prizes). I would be curious whether the judges felt there were a bunch of submissions that seemed engineered to just garner one of those prizes. 

My hunch is the compensation-seeking problem is manageable if the grants are modest; it would be tricky for someone to figure out how to do enough to clear the good-faith/serious application bar while working quickly enough to make compensation-seeking an attractive approach. Presumably, there would be one participation grant per lifetime, unless the applicant was given specific encouragement to reapply on a prior round and reasonably addressed any suggestions given. Also, I wouldn't be opposed to the grantmaker compensating for somewhat less than the value of the applicant's time -- both as a means of discouraging compensation-seeking, and because it's not unreasonable for the would-be grantee to bear some of the costs of the joint product.

 

Edit: typo, should be not UNreasonable

Does anyone have a sense of the volume of EA donations made to funds in a non-tax-advantaged way?

I see GWWC's recommendation to generally give to funds even if not tax-advantaged, but I wonder if there is a better solution around the problem for everyone other than the government -- at least in Global Health & Development. (I don't know other cause areas well enough to opine.)

AMF is tax-deductible in a lot of places. All GWWC recommended GH&D funds are ultimately powered by GiveWell at their core. Even All Grants is expected to send 75% to one of the four top charities. Given AMF's status as a GiveWell top charity, it's safe to say that a lot of money will flow through GiveWell to AMF.

It would seem advantageous to have a simple way in which a donor could tell GiveWell and AMF: "I have $1000 that I would like to give to GiveWell Top Charities Fund (or whatever), but I am hereby giving it directly to AMF for tax reasons rather than only being able to afford $700 to GiveWell. Please compensate." GiveWell could then treat (say) $850 of those monies as akin to an advance grant payment to AMF, and reduce a future grant by that amount. (Alternatively, if it were seen as important for the money to go only to GiveWell-endorsed efforts, AMF could agree to park $850 of the donation in a safe investment until GiveWell "grants" that money as part of its normal grants process.)

The end result is that AMF is $150 better off than if the donor had given directly to GiveWell, as it received $1000 from the donor instead of $850 from GiveWell. The GiveWell fund is $150 better off too -- it lost a $700 contribution from the donor but got "credited" for an $850 grant to AMF, leaving $150 more to distribute to other organizations than in the donor-to-GiveWell scenario.

Whether the operations setup would be worthwhile depends on amount of tax-disadvantaged monies flowing into the GH&D funds.

(I am aware of the donation swap and actually have some active offers to swap at the moment to help out non-US donors. However, the approach above doesn't require finding compatible counterparties, and allows money flows to ultimately track the fund's allocation  that is what is desired. My example has an even split of the "surplus" between AMF and the fund, but that was for simplicity rather than an expression of my position. Finally, one could use a different charity as the partner, but I think AMF is the most widely-deductible GiveWell Top Charity and so would cover more donors for a fixed amount of work.)

Based on some recent discussions of "passive philantrophy," I am wondering if there are circumstances in which people spend money at cross purposes and might be agreeable to offset their monies and donate them to an effective charity instead. One possible example follows.

In any US political campaign where the candidates/parties have roughly equal funding resources, the utility of donating $1 to my preferred candidate is roughly equal to the utility of depriving the opposing candidate of $1. Stated another way, if I donate $100 to a SuperPAC boosting Candidate X, and you donate $100 to one boosting her opponent Candidate ~X, $200 gets essentially wasted because the donations' effect cancels each other out.

Would it be possible to develop a website that attempts to capture this "wasted" money and route it to an effective charity? Ideally, if X boosters committed $1200 and ~X boosters committed $1000, the website would send $200 to the SuperPAC boosting X and send the other $2000 to an effective charity. I wonder if there could even be a way to get a tax writeoff for the people whose money got send over to the effective charity (campaign contributions usually are not tax-deductible). 

Roadblocks/drawbacks: 

(1) Campaign finance law is complex, so no guarantees there! 

(2) Donors would have to feel confident that someone wasn't gaming the system. For instance, if I was indifferent to American politics but wanted to support the effective charity, I could basically double my donation by committing funds to the candidate who was behind on the website. I suppose that only netting 50% would solve that problem if no better solution could be found. Back to the hypo, X's SuperPAC would get $700, ~X's SuperPAC would get $500, and the effective charity would get $1000. 

(3) This could potentially backfire and lead to more money flooding into American politics, although my late-night ideas are usually not popular enough to have effects of that magnitude. :)

(4) To the extent that big donors contribute for influence rather than for ideological reasons, this probably wouldn't work (although maybe they get a certificate certifying that they destroyed/offset $Y of the opponent's funds that they could peddle for influence?)

Hadn't to my knowledge (but I can't rule out the possibility that I had seen it in previous forum lurking a while ago and just don't remember). One conscious trigger, at least, was hearing about how SBF and others at FTX gave tens of millions to different parties and shaking my head at the waste (this was before the origin of those funds was fully known).

Caveat: I am a lawyer but am not speaking with any real assessment of the merits beyond a skim of the FEC letter back in 2015. The viewpoint below is based on general principles of civil litigation strategy and is not something anyone should actually rely on without talking to a campaign-finance expert.

My initial reaction to the threat of legal challenges, if someone thinks there is enough potential value here, is to commit to funding this appropriately and just let them sue. If you were particularly worried about litigation, set it up the first time so that the only candidate pair is from the general-election presidential race. That should sharply limit the number of entities that have Article III standing to file a lawsuit, maybe just to the candidates and their campaign committees themselves. Make one of them risk the negative publicity of filing a lawsuit to shut down a non-profit website that was benefitting impoverished people in Africa. In any event, do not set up a pair in a House or Senate race where one of the candidates is a sure loser (who makes a good sacrificial lamb for a political party that wants the website shut down) or a clear winner (who can probably risk a reputational hit).

In a sense, this creates a bifurcation of risk -- there's a risk the website just doesn't catch on, and a risk of litigation, but probably a low risk of both at the same time. What rational candidate is going to commit money to litigation to secure an a small amount of additional funds for themselves when: (1) the amount isn't that much; (2) they alone bear optics/PR risk; (3) their opponent gets the exact same benefit they get without incurring any of the costs? For litigation to make sense, you'd either need to believe the amount of money coming through this site was going to be pretty significant, or would need to believe that the marginal benefit of an extra dollar to your campaign was much greater than for your opponent.

Next, any litigation would likely be -- like many election-related challenges -- only practically winnable in accelerated proceedings. With a favorable FEC opinion letter, few district judges would grant emergency relief to a litigant like a temporary restraining order. In ordinary litigation, the federal courts can take a while to get around to deciding whether to grant a preliminary injunction.  Would a judge be inclined to put this high on their priority list? Depends on the judge, but I think it would only get priority if pretty successful. The ship may well have sailed by then -- and note that a decision by a district court is often not a particularly effective weapon for other litigants who want to sue you in future elections. (For the lawyers, if there is a concern about offensive collateral estoppel, I think the solution is for the next attempt to be with a different, unrelated non-profit with whom the first non-profit is not in privity.)

If the court did grant a preliminary injunction, I would ask the court to (1) require the organization to pass through 100% of funds to both sides, but (2) require the opposing party to post an injunction bond in the amount lost to charity [at least to its own candidate]. Injunction bonds aren't required as often as I think they should be, but it would be worth a shot. Alternatively, you could ask that the organization be allowed to continue but required to lock up the money pending final judgment.

I'd also consider whether to stick a nice "poison pill" in the user agreement. Suppose that there were an adverse litigation outcome -- what should happen to the money? You could try adding a provision that it has to be returned to the donors, attempting to deprive the plaintiff of any concrete benefit from winning the suit in the first place. They would be no better off, unless and until their would-be donors chose to give them the money. And, if I were a candidate, I would be worried that some percentage of my donors would be annoyed at my litigation antics and that my opponent's donor re-gift rate would be higher.

I suspect Professor Zolt didn't move forward in part because (if I understand correctly) his for-profit entity was going to be funded by a tiny sliver of the funds flowing through the entity.  That's probably not enough revenue to justify defending this in litigation. On the other hand, if the monies were going to something like GiveDirectly (more legible) or AMF, the EA community "captures" the vast majority of the value of the offset funds. So the community should more willing to accept a quarter-million in expected litigation costs if the idea has upside to drive at least several times that to effective charities.

Finally, a less effective but potentially "safer" way to do something along the same lines would be to form a SuperPAC. I am reminded of the one Stephen Colbert did back in his Colbert Report days as a parody of the campaign-finance system. That's a much harder attack surface, as the main attraction of SuperPACs is that they are  . . . unregulated.

I would have to check whether a SuperPAC can donate to another SuperPAC, which would be an easy way of getting rid of the non-netted funds. Simply returning the non-netted funds might be another option. Actually running ads would be awkward. Colbert donated most of the proceeds of his super-PAC to non-political charities when he dissolved it, so shipping the netted funds to the chosen charit(ies) at the end of the election shouldn't be a problem. The biggest downside of this approach, in addition to probably being less legible to would-be donors, is that donations to a superPAC definitely are not tax-deductible (vs. I don't know if netted donations to something like I originally suggested would be).

Today's shower thought: When strong downvoting a post, one should be required to specify a reason for the strong downvote (either from a list, or through text entry if no pre-made reason fits). These reasons should be publicly displayed, but not linked to individual voters. [Alternative: They should be displayed to the commenter who is being downvoted only.] This is not intended to apply to strong disagreevotes.

Getting downvoted isn't fun, and I've seen a number of follow-up comments recently along the lines of "why am I being downvoted for this?" Right now, we generally don't provide any meaningful feedback for people who are being downvoted. In some cases (including some where I didn't vote at all), I've tried to provide feedback -- e.g., that particular language could be seen as  "premature and unfriendly without allowing [an organization] time for a response" -- which I hope has been sometimes helpful. But I'm wondering whether there is a broader way to give people some feedback.

The other reason that I think a reasons-giving requirement might make sense is that it serves as a tiny stop-and-think moment. It interrupts the all-too-human tendency to reach for the strong-downvote icon when one viscerally disagrees with a post, and reminds the user what the generally appropriate reason for strong downvotes are.