Announcing the EA donation swap system

The new EA dona­tion swap sys­tem on dona­tion­swap.eahub.org matches donors to­gether so they can donate to each other’s favourite char­ity, and both re­ceive tax benefits.

If you want to donate to a char­ity or fund that is not tax de­ductible in your coun­try, this sys­tem is for you!

AND

If you are a donor that is lucky enough to have many tax de­ductible char­i­ties (es­pe­cially UK, US, Canada, Ger­many, Nether­lands, Switzer­land), then you can help EAs from around the world us­ing this sys­tem.

The prob­lem:

Many coun­tries have a very small num­ber of EA char­i­ties or funds that are el­i­gible for tax de­duc­tions (e.g. New Zealand, Aus­tralia, Den­mark, Nor­way), and ex­pand­ing the list of tax de­ductible or­gani­sa­tions can be very difficult. This means that EA char­i­ties are prob­a­bly not be get­ting as much money as they could and/​or EAs may not have as much money in their pock­ets as they could.

The size of the po­ten­tial loss to EA char­i­ties can be very roughly es­ti­mated us­ing the 2018 EA sur­vey data. We re­moved the very large donors with $1 mil­lion+ dona­tions from the data set (as they’d prob­a­bly be hard to match), and the donors from coun­tries with a large num­ber of tax de­ductible EA char­i­ties (UK, US, Canada, Ger­many, Nether­lands, Switzer­land). The re­main­ing donors donated ap­prox­i­mately 2 mil­lion USD dur­ing 2017. If half of those dona­tions are cur­rently not re­ceiv­ing tax de­duc­tions, and the av­er­age tax back is 40%, that could be a loss of $400,000 to EA char­i­ties dur­ing 2017. We be­lieve this is an un­der­es­ti­ma­tion, as it is likely that many in­ter­ested donors would not have taken the EA sur­vey.

Another po­ten­tial loss is that some donors may be donat­ing to char­i­ties they be­lieve to be less effec­tive, in or­der to re­ceive a tax de­duc­tion. (We don’t recom­mend do­ing this as the var­i­ance be­tween char­i­ties is likely to be much larger than the gain from the tax de­duc­tion).

The solu­tion:

The EA dona­tion swap sys­tem will match donors to­gether who want to sup­port char­i­ties or funds that are tax de­ductible in each other’s coun­try. They then donate to each other’s favourite char­ity or fund. The ad­di­tional tax benefits will mean EAs will have more money in their pocket, or more money will be donated to effec­tive char­i­ties.

Mem­bers of EA New Zealand have ar­ranged a hand­ful of swaps in the past, in­di­cat­ing there is a mar­ket for this sys­tem.

The coun­tries we sup­port so far are Aus­tralia, Canada, Den­mark, France, Ger­many, Ire­land, Italy, Nether­lands, New Zealand, Nor­way, South Africa, Spain, Switzer­land, USA, United Kingdom

A sim­ple ex­am­ple of how it works:

Inger from Nor­way wants to sup­port the Good Food In­sti­tute (GFI) with a dona­tion of 5000 USD. Robert from the USA wants to sup­port the Against Malaria Foun­da­tion (AMF) with a dona­tion of 5000 USD. AMF is tax de­ductible in both coun­tries, GFI is only tax de­ductible in the USA. The EA dona­tion swap sys­tem in­tro­duces Robert and Inger to­gether and they agree to swap dona­tions.

Inger donates 5000 USD to AMF, Robert donates 5000 USD to GFI. They both get their tax de­duc­tions at the end of the fi­nan­cial year.

Keep­ing it in the EA community

Since this is a trust sys­tem, we think it would be best if this is kept to the EA com­mu­nity. We are only adding char­i­ties that have some af­fili­a­tion to EA, or are recom­mended by EAs.

We also recog­nise that this sys­tem could re­sult in a lower tax take, so may not be wel­comed by the tax de­part­ments! We’ve had some EAs with le­gal ex­pe­rience state they be­lieve it is okay in their coun­try, but we haven’t con­firmed that swap­ping dona­tions is le­gal in all of our coun­tries where we offer swaps.

Beta version

This is the first iter­a­tion of the EA dona­tion swap sys­tem, so there are bound to be some is­sues, and there are many im­prove­ments that could be made if it proves to be pop­u­lar, including

  • adding more coun­tries and charities

  • im­prov­ing the user ex­pe­rience

  • sup­port­ing re­cur­ring donations

  • im­prov­ing the match­ing algorithm

We would re­ally ap­pre­ci­ate feed­back to help us im­prove.

For more in­for­ma­tion, or to set up a swap, please go to dona­tion­swap.eahub.org.

If you have any ques­tions that our web­site doesn’t an­swer, please ask in the com­ments be­low or get in touch on dona­tion­swap@eahub.org.

The EA dona­tion swap sys­tem is a vol­un­teer pro­ject by EA Christchurch, with the as­sis­tance of a hand­ful of EAs around the world who pro­vided us with dona­tion in­for­ma­tion, and Re­think Char­ity who are al­low­ing us to host it on the EA Hub web­site.

The team: Cather­ine Low, Marc Spoor, Jaram Lallu and Zoe Williams