Opportunity to increase EA org funding by ~$200K/year if a couple hundred EAs take 1 minute on Giving Tuesday

by JSWinchell2 min read29th Nov 20209 comments

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[UPDATE] The Life You Can Save, The Against Malaria Foundation, Charity Entrepreneurship, Peter Singer and more have all called on @VISA to eliminate fees on charitable donations using the hashtag #NoFees4Charity. You can find them on Twitter, Facebook, and Instagram. I've put together an initial list of posts here to make them easier to find: https://docs.google.com/document/d/1r8MzseWPsKTLU2C6s5IPV_bJl_JwrLlcCZBzwNNBLRw/edit#

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On Giving Tuesday (December 1), The Against Malaria Foundation and The Life You Can Save are going to post #NoFees4Charity on social media asking @VISA to eliminate credit card fees on donations to registered charities. 

Our request: 

On Giving Tuesday, please retweet/share their posts using the hashtags #NoFees4Charity and the tag @VISA. Or, write your own using this guide. Please also sign our petition

No followers? That’s okay, if you tag @VISA and use the hashtag #NoFees4Charity, the VISA social media team will still register your post.

Not your style? Consider posting and then deleting a month later. 

Context: 

If you’re like me, you’ve donated by credit card and lost 1-3% of your donation to credit card fees. Based on EA Survey 2019 data, this loss likely amounts to hundreds of thousands of dollars each year.

We want this money to go to EA orgs instead of financial institutions, so we are launching a social media campaign on Giving Tuesday (December 1) to pressure VISA to eliminate their fees on donations to registered charities. 

If we are successful, we anticipate a number of benefits for EA orgs:

  1. Increased funding.
  2. Increased bandwidth for nonprofit staff (reduce the need for employees to process larger donations, as this process is designed to minimize fees).
  3. Increased unity across the movement. Increased funding for EA orgs is something that EAs from all cause areas can get behind and a successful show of unity could open doors to other larger projects that require movement-wide coordination.

In addition, this change would lead to billions more dollars for non-EA nonprofits.

Other ways you can help:

  • If you run a nonprofit, please have that nonprofit also retweet / share AMF and TLYCS’s posts, or write your own using this guide.
  • Please share this message in your local/topicalFacebook group or page to help get out the word
  • If you have experience with similar campaigns (e.g. animal welfare corporate campaigns) we would love feedback
  • If you can think of other groups that would be amenable to sharing, please share directly with them (e.g. philanthropy-oriented student groups)

We also have a facebook event here. Please invite your friends.

Thank you for your support,
JS

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9 comments, sorted by Highlighting new comments since Today at 8:16 PM
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This seems to have very low cost and a nontrivial chance of a very substantial positive effect. If nothing else, if you're on Twitter anyway it's probably worth the few seconds it takes to search for #NoFees4Charity and like a bunch of the tweets.

I'm happy to do this, but I want to note that it seems to me like you may be overselling the opportunity with your post title ("Opportunity to increase EA org funding by ~$200K/year if a couple hundred EAs take 1 minute on Giving Tuesday") since:

(a) VISA may very well not eliminate fees for payments to charity even if 200+ EAs do what you ask on Giving Tuesday, and

(b) The fraction of donations (made by EAs who filled out the EA survey) made using VISA credit cards may be substantially less than necessary to make the total fees amount to hundreds of thousands of dollars each year. ("EAs in the survey reported total donations of $16.1M USD in 2018." However, not all of this is donated by credit cards, and VISA has 50% of the credit card market by purchase transactions.)

So my questions for you are:

  • How likely do you think it is that VISA will do this conditional on 200 EAs fulfilling your request on Giving Tuesday?

  • What fraction of donations reported on the EA Survey do you estimate are made by VISA credit card donation? (Or what's the total amount donated to EA nonprofits using VISA credit cards each year?)

Thanks for your support William it's much appreciated! Please do repost on Giving Tuesday :)
 

(a) You're correct that they may not. We could multiply by a probability to get an expected value but IMO given it's a perpetuity it's definitely worth 1 minute. 

I estimate the probability to be ~40%. This may seem high but through my job I work with large companies and have seen them make changes because of a handful of people posting on social media. 


(b) When calculating the return my assumptions were (quick calculation here):

  • Small EA donors donate through credit cards, large EA donors do not
  • 3% average credit card fee
  • If VISA eliminates the fee, other card companies will follow suit 

Thanks for the reply! Sharing a couple other relevant thoughts just because I took the time to think them, but no reply is necessary.

(This is probably the sort of scenario where I should just spend the minute to tweet at VISA rather than spend several minutes trying to more precisely estimate the expected impact, but I only consciously thought of this after already spending a few more minutes thinking about the expected impact and writing out the following so I'm posting my thoughts anyway.)

Re:

(a) Naively I'd estimate that the counterfactual effect of 200 additional marginal EAs retweeting/sharing the relevant posts on Tuesday on the probability that VISA eliminates fees for nonprofits in the next year is roughly ~5% (and possibly much lower if I thought about it longer). I'd be shocked if this one push increased the probability by 40%, even though I do agree that sometimes (often?) large companies make changes because of a small number of people posting on social media.

(b) Adjusting your estimate with different more conservative assumptions -- a 2% average credit card fee, only donors <$10,000/year (rather than <$100,000/year) use credit cards to donate (i.e. $15.4% of the $16.1M/year rather than 43%), and assuming only the impact from VISA changing their fees -- then the direct impact would be closer to $24,800/year = (Your $207,690 estimate)(2%/3%)(15.4%/43%)*(0.5). The main direct impact this ignores is the fact that presumably many people who do not respond to the EA Survey donate to EA charities using VISA credit cards. The EA Survey VISA donors may represent a minority of VISA donors to EA charities.

Or you could just look at how much money goes to highly effective charities, since we're talking about abolishing fees for all donors, not just EAs. The AMF had donations totalling 36 million in FY2020, so, using your values of 2% credit card fees, 15.4% of money donated by credit card (though I suspect the real value to be much higher, especially when considering non-EA donors) and visa holding 50% of the credit card market, that's a total of 55'000$ for just one charity. Given that, I think it's perfectly reasonable to say that visa eliminating their fees would increase funding for the most effective charities by hundreds of thousands if not millions of dollars a year, though I disagree with JSWinchell's methodology

Because it's the sort of thing I do, I wrote a metaculus question on whether this will succeed. It would be cool to see the people discussing the potential success of this plan put numbers on their claims.

 

I like it! Good job finding a small one-time change that would add up to a big difference over time.

Visa, PayPal, and some others already have discounted credit card processing rates for charities. How do you plan to respond to a boilerplate reply saying they’re already providing a discount for charities? I’m concerned that the existing nominal discount will “check the box” for some people that the credit card processing companies “care”.

Do you have a plan for negotiating if you get an interested response? In my limited experience with vendor pricing negotiations at work, counterparties are usually more amenable to a narrowly limited ask that demonstrates you understand the value they are providing. “Can I get a discount on the oversize box fee?” or “Can I get a discount on these 7 standard items?” are easier to say yes to than changing a whole category multiplier, where they would have to actually do the math.

This might look like asking for

  • transaction fees to be waived on only Giving Tuesday
  • a specific, deeper discount that still covers their expenses for providing the service
  • a fee rebate program that could be. implemented separately from their payment processing

Also, if you target multiple processors, you might be able to play them against each other.

Good luck!

Thanks so much for your question Cienna!

The honest answer is that we are not approaching this project anticipating that it will end in a negotiation with VISA. My assumption (could very well be flawed as this is our first social media campaign) was that VISA would either change the fee or not, without negotiating externally. You may very well be right though so thank you for offering these tips, it's greatly appreciated!

The aim in targeting one processor was to maximize the pressure on a single company vs spreading ourselves thin across multiple. 

Thanks again!