Charity Vouchers [public policy idea]

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[Origi­nally posted to philos­o­phyetc.net]

Peo­ple some­times ob­ject to the char­i­ta­ble tax de­duc­tion on grounds that it is “un­demo­cratic”, in­cen­tiviz­ing wealthy in­di­vi­d­u­als to ex­ert philan­thropic in­fluence in­stead of filling the pub­lic purse. On the other hand, well-tar­geted philan­thropy surely achieves more good than pay­ing ex­tra to the gov­ern­ment (which may just go to pay­ing down the pub­lic debt, fund­ing un­nec­es­sary wars, mil­i­tary pa­rades for the Great Pa­tri­otic Leader, cor­po­rate welfare, and tax breaks for the wealthy). If choos­ing where best to donate your money, “the US gov­ern­ment” would seem an un­likely an­swer. We rec­og­nize that char­i­ties could use ex­tra funds more effec­tively. So it seems worth ex­plor­ing ways to boost the philan­thropic sec­tor whilst avoid­ing the po­ten­tial down­side of con­cen­trat­ing power in the hands of the ul­tra-wealthy. The ob­vi­ous solu­tion: char­ity vouch­ers.

Char­ity vouch­ers would be a bit like ba­sic in­come, but only us­able for dona­tions to el­i­gible char­i­ta­ble or­ga­ni­za­tions. Every cit­i­zen would re­ceive char­ity vouch­ers (e.g. $1000 per month), to de­cen­tral­ize pub­lic spend­ing and so­cial re­spon­si­bil­ity. To over­come col­lec­tive ac­tion prob­lems and benefit from economies of scale, in­di­vi­d­u­als could choose to trans­fer their vouch­ers to a trusted ‘meta’ or­ga­ni­za­tion (like GiveWell) to dis­burse on their be­half.

Like ba­sic in­come, char­ity vouch­ers nicely sep­a­rate the is­sues of “re­dis­tri­bu­tion” and “size of gov­ern­ment”. They’re the sort of thing that small-gov­ern­ment “com­pas­sion­ate con­ser­va­tives”, if any still ex­ist in this age of Trump, clearly ought to sup­port. The demo­cratic left should like the re­dis­tri­bu­tion of in­fluence, em­pow­er­ing or­di­nary cit­i­zens to shape pub­lic spend­ing, thereby mak­ing use of the lo­cal knowl­edge and val­ues of di­verse com­mu­ni­ties. Mar­ket liber­als will laud the effi­ciency gains of mak­ing trade-offs trans­par­ent: money spent on one cause is not available for an­other, and mak­ing this more salient may help to re­duce waste­ful spend­ing that sounds nice in iso­la­tion but clearly isn’t worth the op­por­tu­nity costs. Moder­ates may ap­pre­ci­ate de­poli­ti­ciz­ing con­trol of the pub­lic purse, re­duc­ing the stakes of poli­ti­cal con­tests, and re­duc­ing the power of (in­creas­ingly dys­func­tional) poli­ti­cal par­ties.

There are tricky ques­tions of im­ple­men­ta­tion to con­sider. (1) How gen­er­ous should the vouch­ers be? (2) What cur­rent spend­ing would these re­place? Or, to shift the im­plicit baseline, what things should gov­ern­ment di­rectly fund in­de­pen­dently of cit­i­zen-sup­ported fund­ing? (3) Should cit­i­zens be able to di­rect their vouch­ers to spe­cific gov­ern­ment de­part­ments, e.g. the mil­i­tary, or ed­u­ca­tion, or so­cial se­cu­rity, rather than choos­ing be­tween NGOs or the gov­ern­ment as a whole? (4) How re­stric­tive should the el­i­gi­bil­ity crite­ria be for char­i­ties? Do we want to al­low any non-profit to qual­ify, or must they provide cred­ible ev­i­dence of achiev­ing hu­man­i­tar­ian goals? (5) How could we best pre­vent self-deal­ing? (6) Should ev­ery­one’s dona­tion choices be made pub­lic? Or just ag­gre­gate data? (7) Should there be any reg­u­la­tions or re­stric­tions on how (and how much) el­i­gible char­i­ties may ad­ver­tise to the pub­lic?

Let me know what other key ques­tions you can think of.

Also, what do you think would be the likely con­se­quences of im­ple­ment­ing char­ity vouch­ers (in whichever way you think best)? I sus­pect ma­jor benefi­cia­ries would in­clude chil­dren, cute an­i­mals, and the global poor (rel­a­tive to cur­rent pub­lic spend­ing). Churches too, if they were el­i­gible, though they ar­guably shouldn’t be. Spend­ing on the el­derly would likely be re­duced from cur­rent lev­els. To­tal so­cial spend­ing may in­crease, as pub­lic sup­port for cit­i­zen-driven philan­thropy may well be higher than pub­lic sup­port for gov­ern­ment-cho­sen pri­ori­ties. If so, this strikes me as an over­all pos­i­tive prospect (though the ‘cute­ness’ bias in an­i­mal welfare is un­for­tu­nate).

All thoughts /​ com­ments /​ ob­jec­tions wel­come.