In the future I'll probably want to donate to a UK charity (Humane Slaughter Association). Some people in the UK probably want to donate to a US charity like GiveWell or MIRI. Rather than both donating to foreign charities, we should trade donations so that we can both get tax deductibility / Gift Aid for our donations.
Trading doesn't have to occur only between matched countries. There's a benefit to trading so long as just one side gets tax deductibility / Gift Aid where it didn't exist before. For example, if a UK donor was going to give to a Spanish charity, and if a US donor was going to give to a UK charity, the UK donor should give to the UK charity to get Gift Aid, while the US donor gives to the Spanish charity (without tax deductibility). Trading like what I just described even works for those in the US who have already donated 50% of their income and so can no longer get tax deductions in the current year from further US donations.
We should set up a marketplace for trading donations. According to Tom Ash, trading donations is completely legal.
I created an extremely low-tech platform for donation trading in this Google spreadsheet. Feel free to add your info there, keeping in mind that it's shared publicly on the web.
If something like this gets traction, perhaps we can create a website for the service, not just for EAs but for all donors around the world. I haven't been able to find any existing website for this. I'm not sure if that's because large-scale coordination of donation trading is frowned upon or whether it's just because no one has scooped up this opportunity yet. I'm normally skeptical of startup ideas, but this one seems promising to me.
(See also an earlier post by Robert Wiblin about donation trading. Giles recommended a system like I'm proposing here.)
I am mildly worried that connecting strangers to make honor-system donation trades could lead to a dispute. There are going to be more and more new faces around if the various EA growth strategies this year pan out. The fact that donation trading has been going on smoothly until now means folks might get overly relaxed, and it only takes one publicized dispute to really do damage to the culture. Even if no one is outright dishonest, miscommunication could lead to a someone thinking they have been wronged to the tune of thousands of dollars.
I don't think that communication between the donors, as Brian mentions, is fully satisfactory. Even if everyone promises to send receipts afterwards, you still have Byzantine generals' problems. One idea is that we find someone at CEA who, at the least, can be listed as an email contact to which two donors can send their agreement before they execute, just so there's a records and so the CEA person can point out any obvious confusion. I think this could be a very efficient use of CEA time, especially if it increases trust and therefore makes more trades possible.
From the discussion I gather that we're facing the following challenges:
These challenges could be resolved by a global network of EA organisations who offer donation trading (and, if possible in their legislation, donation regranting). Trust and professional communications and management seems easier to achieve with organisations who stick around longer-term than with individuals.
At GBS Switzerland, we already have some of the technical and legal components needed for this (we're tax-deductible in several countries, can regrant donations, have a significant amount of donors who don't pay taxes, and have some nice spreadsheets). Making progress in this direction is not a top priority for us at the moment, but if you're interested in one of the things I've mentioned, please get in touch with me (and also Tom Ash, as he mentions below).
Agreed, doing it through organisations is probably better. Brian, how about putting people who fill in the spreadsheet in touch with the relevant organisations? Right now that'd be GBS for Switzerland and the countries listed at http://effectivealtruismhub.com/actions/donating/europe plus Charity Science for Canada - plus any other organisations that are willing to participate.
Looks like Jonas entered GBS into the Google Doc. Would you like to add Charity Science for Canada to it?
I think the people besides me in the GDoc already have their charity of choice tax-deductible and only added themselves as possible trading partners.
My impression is that trading through organizations only works for a restricted set of charities? It possible in theory to create an org that can donate to any charity in a set of countries? I guess that's what TIDES, Charities Aid Foundation, etc. do, but there's overhead to set that up. If so, there's still value in trading among individuals.
Done.
Yes, it's restricted for us and GBS has a restricted list named on their site. And yes, it'd be a lot of overhead to register a whole new charity just for this. I have been setting up an EA donation routing mechanism in the US which might be able to do this though.
Brian, would you (or someone you find) be happy to be the arbiter?
In the near term I'd be glad to do that, since I don't expect a high work load. In the longer term, if trading picks up steam, we can find something more permanent.
It seems good to have an arbiter...
Great point! Normally such problems are handled by an escrow, but that won't work here, since the individual donors need to make the donations, not a third party.
In theory, one solution for minimizing risk would be to donate incrementally, e.g., only $1K at a time, so that the maximum loss would be $1K. But it would be burdensome to do so many small donations and share receipts after each one.