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.
In this example Inger gains tax deductability, but Robert gains nothing in return for taking on the counterparty risk of the swap. Wouldn’t it make sense for Robert to donate slightly less than $5000, or Inger slightly more, such that both parties benefit?
This reminds me a little bit of Critch’s Rent Division Calculator, which aims to produce a room-and-rent-allocation for shared houses that everyone likes as much as possible; not merely one that no-one actively dislikes.
Thanks Larks! There will be the very occasional swaps where both parties benefit, but most will have just one beneficiary like the example above. We thought briefly about incentivising Robert-type people, but in the end decided to go for the simple “both charities get the same $” for the first iteration. If we are struggling to get Robert-type donors to offer swaps we will definitely revisit this idea.
Thanks, this is a cool idea.
In this example Inger gains tax deductability, but Robert gains nothing in return for taking on the counterparty risk of the swap. Wouldn’t it make sense for Robert to donate slightly less than $5000, or Inger slightly more, such that both parties benefit?
This reminds me a little bit of Critch’s Rent Division Calculator, which aims to produce a room-and-rent-allocation for shared houses that everyone likes as much as possible; not merely one that no-one actively dislikes.
Thanks Larks! There will be the very occasional swaps where both parties benefit, but most will have just one beneficiary like the example above. We thought briefly about incentivising Robert-type people, but in the end decided to go for the simple “both charities get the same $” for the first iteration. If we are struggling to get Robert-type donors to offer swaps we will definitely revisit this idea.