Hey Todd, I’m a bit confused about what the non-profit stock market would do? Could you maybe walk me through what an ‘investor’ would do and what they would get out of it?
Hi Robert, in Phase 1 it would be more like a donation platform. Robert would go to the RGB Exchange, add desired non-profits to your portfolio, and then donate. The main value as I see it with that model it to help people manage ongoing giving in a single place, and to make it as easy and fun as possible. The natural extension of this we’re talking about experimenting with is creating pre-established portfolios that might include a desired selection of non-profits, so by investing in one, it is supporting a sector, for example. And the “meta” extension would be to set it up so anyone could make and publish a suggested portfolio for others, such as any user, an independent analyst, company or organization. The last bit is intended to help foster an ecosystem.
I feel like it’s more solid to start with donations and then to extend into a market based system. The market-based extension would be to assign a virtual share to each donation, not signifying financial ownership, but symbolically representing the impact of that donation. And it’s meant not to be definitive or perfect, but a starting point—one novel approach is to develop impact ratings, and have those affect the virtual share price through an algorithm, to harness market forces in alerting people to impact, so that the user Robert could go in, look at a non-profit, and look at the virtual share price and it’s performance, and see how it’s been doing, and then also look at the impact ratings. So this extension would be like the first—you go and choose non-profits to invest in, but there’s more inputs and experiments to reflect impact, and the main experiment is “virtual shares”.
How does that strike you? If you’d like to look at the demo you can email me at todd@rgbexchange.org
I think the idea of creating a charitable giving portfolio is very promising, especially if it can change donor attitudes and persuade people to donate to more effective charities based on evidence and results which can easily be expressed as a stock price. If you do not have the bank accounts and nonprofit status needed to make this idea possible, I can provide that. I have the framework necessary to accept tax deductible donations, hold them in a bank account or brokerage account, and disburse the funds regularly to charities as this idea would require.
I think your idea is excellent, and to utilize psychology and make people more willing to participate and give, I believe that real money has to be at stake. I believe it would be best if people who successfully predicted nonprofit successes were able to somehow gain greater monetary influence for the charities they supported.
To implement this, I propose a seemingly highly complex system, but one that would be simple for donors to understand and participate in. This idea is a brainstorm, and likely needs some thorough analysis and correction of conceptual errors before it becomes mathematically possible. My idea could be implemented very simply in a Google Spreadsheet before hopefully evolving to a more effective solution. First off, I would like to introduce the concept of an “impact point.” An impact point is equivalent to one dollar sent out to a charity each year for the foreseeable future. There would be a ratio between dollars and impact points, perhaps to the scale of $40 to one impact point initially. This is a rather steep scale, so perhaps it could be highly modified, but i’ll use that as an example for now. if you’re curious how one dollar sent out each year could be sustained, the brokerage account that I have access to could invest all money in stocks or a low risk 2.5% annual return investment so that impact points would perpetually hold value, and maybe even automatically increase in value yearly (or investors would get extra impact points for free) if investments in the brokerage account substantially increased in value. All charities, such as the Against Malaria Foundation, would have a share price which could be determined arbitrarily or set as a ratio between a dollar in the share price and the nonprofit’s approximate total annual budget. If $1 was equivalent to $10,000 in a nonprofit’s annual budget, and AMF’s annual budget was $3,000,000, its share price would be $300. That could be an overly steep entry price, so some adjustment to the formula could perhaps be made, but a higher share price is advantageous because it encourages larger investments in any given stock. Anyways, similar to the stock market, donors would have to bid to “buy” shares in a nonprofit, while sellers would propose an asking price for shares. If there was additional demand to invest in a nonprofit because the nonprofit was successful or GiveWell updated their recommendation status or something, the share price would increase as existing shareholders would want to set their asking prices as high as possible to get more impact points out of their transaction and earn a profit in impact points. If a nonprofit was suddenly downgraded by GiveWell, existing investors might want to switch their impact points into other charity instead, and the stock price would crash as sellers set their asking prices as low as possible to escape the charity. As an add-on idea, if donors wanted to liquidate their impact points, perhaps they could sell their shares in the charity, and then have the stock exchange sponsoring organization exchange their impact points for direct donations to a charity/charities.
With this system, investors would be motivated to select the most promising charities as those promising charities’ stock prices presumably would increase in value over time as the charities became more effective, thus achieving the goal of the system in encouraging donations to effective charities.
Thanks Josh, very helpful, serendipity not surprising, I’ve seen increasing evidence of portfolio-based giving. Agora looks pretty nice, looks like they have big backing—I’m open to feedback, and I think there are differentiators, including the market-based extension, but for the sake of debate, do you think that given Agora’s existence, I should just defer the experiment to them and close up shop? The tone I’m taking is: serious, and humble.
I don’t have strong feelings, except I think that the market-based extension is important, and some other things I’m planning on doing.
That sounds interesting! I haven’t had the time to consider the hurdles you’d face to realizing such a project, but I’ve recently thought about a system that might have some overlap and that I won’t have the time to work on for the foreseeable future. Maybe there’s something in there you’ll find useful.
Hi Denis, thanks for sharing. I looked briefly at the page, and have filed for review; I reached out to GiveWell twice: a couple years ago, and then recently after they visited Twitter, where one collaborator is working. Their response both times was “busy working on their research”, so I’m not going to reach out to them anymore. But as I understand it, over time and more recently they have evolved from a more “minimal” model to one encompassing more breadth; I can’t remember the specifics, but anyway they’re evolving. So it’s interesting to learn about some of the dynamics.
I guess most recently it’s felt like the approaches, especially around impact ratings, probably deserve to be in a completely open and transparent framework, in part to allow input and innovation to help them be more impactful. In terms of the specific issue of people hesitating to support a cause because of waiting for social signals (not me first), that wouldn’t be a problem for the RGB Exchange, because it’s at the other end of the spectrum, in terms of the size of the donations.
Without having read every word, sounds like you were trying to think of ways of balancing and democratizing uptake, and I agree with that. To me, I have less interest in trying to pre-define the perfect way of doing things, but to go in, try, and then be 100% open to feedback. I guess I’m approach-neutral—to me, whatever results in the most impact is best.
So thanks again for mentioning, and please do consider pulling away from what you’re doing, your skills are super valuable and hard to find, and I urge you to devote more time to impact projects (perhaps that’s what you’re doing, hats off). Otherwise, RGB Foundation is 501c3 and could certainly use financial support. Feel free to email tekelsey@gmail.com if you’d like to try the demo. You’re also invited to join the email list at www.rgbexchange.org (as is anyone)
Hey Todd, I’m a bit confused about what the non-profit stock market would do? Could you maybe walk me through what an ‘investor’ would do and what they would get out of it?
Hi Robert, in Phase 1 it would be more like a donation platform. Robert would go to the RGB Exchange, add desired non-profits to your portfolio, and then donate. The main value as I see it with that model it to help people manage ongoing giving in a single place, and to make it as easy and fun as possible. The natural extension of this we’re talking about experimenting with is creating pre-established portfolios that might include a desired selection of non-profits, so by investing in one, it is supporting a sector, for example. And the “meta” extension would be to set it up so anyone could make and publish a suggested portfolio for others, such as any user, an independent analyst, company or organization. The last bit is intended to help foster an ecosystem.
I feel like it’s more solid to start with donations and then to extend into a market based system. The market-based extension would be to assign a virtual share to each donation, not signifying financial ownership, but symbolically representing the impact of that donation. And it’s meant not to be definitive or perfect, but a starting point—one novel approach is to develop impact ratings, and have those affect the virtual share price through an algorithm, to harness market forces in alerting people to impact, so that the user Robert could go in, look at a non-profit, and look at the virtual share price and it’s performance, and see how it’s been doing, and then also look at the impact ratings. So this extension would be like the first—you go and choose non-profits to invest in, but there’s more inputs and experiments to reflect impact, and the main experiment is “virtual shares”.
How does that strike you? If you’d like to look at the demo you can email me at todd@rgbexchange.org
Hi Todd,
I think the idea of creating a charitable giving portfolio is very promising, especially if it can change donor attitudes and persuade people to donate to more effective charities based on evidence and results which can easily be expressed as a stock price. If you do not have the bank accounts and nonprofit status needed to make this idea possible, I can provide that. I have the framework necessary to accept tax deductible donations, hold them in a bank account or brokerage account, and disburse the funds regularly to charities as this idea would require.
I think your idea is excellent, and to utilize psychology and make people more willing to participate and give, I believe that real money has to be at stake. I believe it would be best if people who successfully predicted nonprofit successes were able to somehow gain greater monetary influence for the charities they supported.
To implement this, I propose a seemingly highly complex system, but one that would be simple for donors to understand and participate in. This idea is a brainstorm, and likely needs some thorough analysis and correction of conceptual errors before it becomes mathematically possible. My idea could be implemented very simply in a Google Spreadsheet before hopefully evolving to a more effective solution. First off, I would like to introduce the concept of an “impact point.” An impact point is equivalent to one dollar sent out to a charity each year for the foreseeable future. There would be a ratio between dollars and impact points, perhaps to the scale of $40 to one impact point initially. This is a rather steep scale, so perhaps it could be highly modified, but i’ll use that as an example for now. if you’re curious how one dollar sent out each year could be sustained, the brokerage account that I have access to could invest all money in stocks or a low risk 2.5% annual return investment so that impact points would perpetually hold value, and maybe even automatically increase in value yearly (or investors would get extra impact points for free) if investments in the brokerage account substantially increased in value. All charities, such as the Against Malaria Foundation, would have a share price which could be determined arbitrarily or set as a ratio between a dollar in the share price and the nonprofit’s approximate total annual budget. If $1 was equivalent to $10,000 in a nonprofit’s annual budget, and AMF’s annual budget was $3,000,000, its share price would be $300. That could be an overly steep entry price, so some adjustment to the formula could perhaps be made, but a higher share price is advantageous because it encourages larger investments in any given stock. Anyways, similar to the stock market, donors would have to bid to “buy” shares in a nonprofit, while sellers would propose an asking price for shares. If there was additional demand to invest in a nonprofit because the nonprofit was successful or GiveWell updated their recommendation status or something, the share price would increase as existing shareholders would want to set their asking prices as high as possible to get more impact points out of their transaction and earn a profit in impact points. If a nonprofit was suddenly downgraded by GiveWell, existing investors might want to switch their impact points into other charity instead, and the stock price would crash as sellers set their asking prices as low as possible to escape the charity. As an add-on idea, if donors wanted to liquidate their impact points, perhaps they could sell their shares in the charity, and then have the stock exchange sponsoring organization exchange their impact points for direct donations to a charity/charities.
With this system, investors would be motivated to select the most promising charities as those promising charities’ stock prices presumably would increase in value over time as the charities became more effective, thus achieving the goal of the system in encouraging donations to effective charities.
Does anyone have any thoughts?
Brendon
Hi Brendon, thanks for thoughts. I got your email separately and appreciate the conversation.
“The initial differentiator is the underlying color coding system, the notion of portfolio-based giving”
This part is similar to https://www.agoraforgood.com/
Thanks Josh, very helpful, serendipity not surprising, I’ve seen increasing evidence of portfolio-based giving. Agora looks pretty nice, looks like they have big backing—I’m open to feedback, and I think there are differentiators, including the market-based extension, but for the sake of debate, do you think that given Agora’s existence, I should just defer the experiment to them and close up shop? The tone I’m taking is: serious, and humble.
I don’t have strong feelings, except I think that the market-based extension is important, and some other things I’m planning on doing.
That sounds interesting! I haven’t had the time to consider the hurdles you’d face to realizing such a project, but I’ve recently thought about a system that might have some overlap and that I won’t have the time to work on for the foreseeable future. Maybe there’s something in there you’ll find useful.
Hi Denis, thanks for sharing. I looked briefly at the page, and have filed for review; I reached out to GiveWell twice: a couple years ago, and then recently after they visited Twitter, where one collaborator is working. Their response both times was “busy working on their research”, so I’m not going to reach out to them anymore. But as I understand it, over time and more recently they have evolved from a more “minimal” model to one encompassing more breadth; I can’t remember the specifics, but anyway they’re evolving. So it’s interesting to learn about some of the dynamics.
I guess most recently it’s felt like the approaches, especially around impact ratings, probably deserve to be in a completely open and transparent framework, in part to allow input and innovation to help them be more impactful. In terms of the specific issue of people hesitating to support a cause because of waiting for social signals (not me first), that wouldn’t be a problem for the RGB Exchange, because it’s at the other end of the spectrum, in terms of the size of the donations.
Without having read every word, sounds like you were trying to think of ways of balancing and democratizing uptake, and I agree with that. To me, I have less interest in trying to pre-define the perfect way of doing things, but to go in, try, and then be 100% open to feedback. I guess I’m approach-neutral—to me, whatever results in the most impact is best.
So thanks again for mentioning, and please do consider pulling away from what you’re doing, your skills are super valuable and hard to find, and I urge you to devote more time to impact projects (perhaps that’s what you’re doing, hats off). Otherwise, RGB Foundation is 501c3 and could certainly use financial support. Feel free to email tekelsey@gmail.com if you’d like to try the demo. You’re also invited to join the email list at www.rgbexchange.org (as is anyone)