A simple idea for making donation matching counterfactual
Donation matching is often dismissed in EA because the counterfactual impact is unclear. The matching funder would typically have donated anyway, so the match isn’t causing any counterfactual donations. But what if we could design matching programs where counterfactual impact is clearer?
The basic scheme: a funder locks crypto in a smart contract that releases the funds to a specific charity only if a match is found within some timeframe. If no match is found, the contract sends the funds to a null address, permanently destroying them.[1] This creates a credible commitment where the charity receives funds if and only if a matcher steps in. So the matcher can be confident that their donation actually caused the charity to receive the funder’s contribution.
When would this beat a direct donation? Assuming risk-neutrality, the expected value exceeds a direct donation if the probability of finding a match, multiplied by the total funds received (the original commitment plus counterfactually new money from the matcher), is greater than the committed amount alone. Thus, for a 1:1 match where the matcher is fully counterfactual, the probability of finding a match must exceed 50%.
There might be potential negative second-order effects though. In my proposed scheme, the funder is essentially holding charitable value hostage to extract more donations, which could be seen as adversarial behavior. Overall though, I’d be excited for some funder to try this approach.
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Other options are also possible, such as anti-charities.
It looks to me like you can't be confident that the matcher who steps in is someone other than the funder, and the funder being their own matcher-of-last-resort destroys the counterfactuality.
Let's say I intend to donate $2X to a charity. I use your system, with a pot of $X. If people donate $X, I send an additional $X to my charity some other way and it receives a total of $3X. If people donate $0 I anonymously use my second $X to meet the terms of the smart contract, and it receives a total of $2X (same as if I'd not set up this match). My $2X went to the charity regardless, and no one who contributed to the matching campaign affected the distribution of my funds.
I think you're probably right. The possibility of the funder being their own matcher-of-last-resort probably destroys the scheme. I hadn't thought about this before, thanks for pointing it out.
One potential way to fix this would be to require the identification of donors, so that you cannot fund anonymously. But this would make the proposal a bit more complicated.
What I don't like about this is that the mecanism would be unintuitive for many people. Also the vibes are off.
Trying to make donation matching counterfactual is manipulative behavior, in my opinion. People should be free to make donations to the charities that they think are best, rather than the ones that are the most donation-matched. If you want to convince people to donate to your favorite charity, just give an unconditional donation and tell other people that that's what you're doing and why you're doing it.
I'd say that using donation matching without making it counterfactual is much more manipulative, because without establishing causality, you'd essentially be deceiving potential 'matchers'. My proposal precisely aims to remove this deceptive potential.
It's possible that this kind of donation matching essentially shifts power to large funders. I think this could be mitigated by having a long whitelist of effective charities (rather than one specific charity chosen by the funder), which gives matchers more leeway.