I suspect that a delayed-allocation model is going to add a lot of complexity (and potentially create user-trust issues). It seems to me that such a model would require significantly more engineering and legal/operational work than a model in which GoodWallet transfers money directly from the donor to the creator’s preselected charity (“immediate model”). It requires the user to have more trust in GoodWallet as custodian of the funds, [1] and is likely to either cost the donor a potential tax deduction or require GoodWallet to jump through some hoops to qualify as a proper charity in its own right. And I think would-be donors do consider the tax-deductibility of a donation as a signal that things are on the up and up.
The advantages of such a delayed-allocation model over an immediate model are not clear to me. In particular, even if the universe of eligible charities is drawn from GiveWell’s recommended-charity list, the possible choices are not that different from each other and I suspect few creators would place much value on the ability to defer a decision on which one to point their supporters to.
As for “mini-DAF functionality for everyone”: as I understand it from a US perspective, the classic reason for DAFs is to allow donors to take the tax deduction now while letting the donation grow for a while and deferring the choice of charity until later. Especially with changes to the US tax code a few years ago, people with modest sums to give aren’t generally in a position to itemize donations anyway, and I didn’t see anything about offering investment opportunities. So I’m not sure who the target audience is for this functionality.
As a potential donor with limited knowledge of anyone involved, I’d be relatively less worried about GoodWallet’s leaders being dishonest but relatively more concerned about whether those leaders had structured things in a way that protected funds intended for charitable purposes from GoodWallet’s potential creditors.
Hi Jason! Benjamin here, co-founder and responsible for the technical side. This is exactly the kind of feedback we are looking for so thanks a lot for commenting.
The delayed-allocation model is mostly a feature of us being in the prototype phase. The main reason is rather technical, because public APIs are missing to directly set up the payment flows from external donors to different charities via the GoodWallet. There are two other minor arguments for at least having the option to accumulate funds first: One is emergency relief. We believe that having a social fund that can easily be directed to emergency relief when needed can be valuable. The second is privacy. Even among highly effective charities, people still have preferences, and we’ve heard people say they would appreciate an option to choose and switch between charities in private.
Having that said, we totally agree with you. Giving GoodWallet users the chance to pre-select a charity to which incoming payments are directed to is something we will certainly add to the platform.
In general, our current situation is mostly resource limited. This is the reason why we kept things as lean as possible. However, we are starting to see interest and would like to drive this forward. Our goal is to register GoodWallet as a non-profit itself and then decide on further product directions. The mini-DAF functionality is something we see fit in perfectly into the overall concept, but we definitely need to explore its practicality further.
Agreed. For what it’s worth, I would probably use (as a creator and/or donor) the platform if it went straight to a charity (e.g. one of, say, three that the creator offers, and the donor chooses from) but not if it went to a delayed allocation pot.
Good idea to allow the user to pre-select multiple effective charities and let the donor decide. We would just need to set up the payment flow to the charities directly.
I suspect that a delayed-allocation model is going to add a lot of complexity (and potentially create user-trust issues). It seems to me that such a model would require significantly more engineering and legal/operational work than a model in which GoodWallet transfers money directly from the donor to the creator’s preselected charity (“immediate model”). It requires the user to have more trust in GoodWallet as custodian of the funds, [1] and is likely to either cost the donor a potential tax deduction or require GoodWallet to jump through some hoops to qualify as a proper charity in its own right. And I think would-be donors do consider the tax-deductibility of a donation as a signal that things are on the up and up.
The advantages of such a delayed-allocation model over an immediate model are not clear to me. In particular, even if the universe of eligible charities is drawn from GiveWell’s recommended-charity list, the possible choices are not that different from each other and I suspect few creators would place much value on the ability to defer a decision on which one to point their supporters to.
As for “mini-DAF functionality for everyone”: as I understand it from a US perspective, the classic reason for DAFs is to allow donors to take the tax deduction now while letting the donation grow for a while and deferring the choice of charity until later. Especially with changes to the US tax code a few years ago, people with modest sums to give aren’t generally in a position to itemize donations anyway, and I didn’t see anything about offering investment opportunities. So I’m not sure who the target audience is for this functionality.
As a potential donor with limited knowledge of anyone involved, I’d be relatively less worried about GoodWallet’s leaders being dishonest but relatively more concerned about whether those leaders had structured things in a way that protected funds intended for charitable purposes from GoodWallet’s potential creditors.
Hi Jason! Benjamin here, co-founder and responsible for the technical side. This is exactly the kind of feedback we are looking for so thanks a lot for commenting.
The delayed-allocation model is mostly a feature of us being in the prototype phase. The main reason is rather technical, because public APIs are missing to directly set up the payment flows from external donors to different charities via the GoodWallet.
There are two other minor arguments for at least having the option to accumulate funds first: One is emergency relief. We believe that having a social fund that can easily be directed to emergency relief when needed can be valuable. The second is privacy. Even among highly effective charities, people still have preferences, and we’ve heard people say they would appreciate an option to choose and switch between charities in private.
Having that said, we totally agree with you. Giving GoodWallet users the chance to pre-select a charity to which incoming payments are directed to is something we will certainly add to the platform.
In general, our current situation is mostly resource limited. This is the reason why we kept things as lean as possible. However, we are starting to see interest and would like to drive this forward. Our goal is to register GoodWallet as a non-profit itself and then decide on further product directions. The mini-DAF functionality is something we see fit in perfectly into the overall concept, but we definitely need to explore its practicality further.
Agreed. For what it’s worth, I would probably use (as a creator and/or donor) the platform if it went straight to a charity (e.g. one of, say, three that the creator offers, and the donor chooses from) but not if it went to a delayed allocation pot.
Good idea to allow the user to pre-select multiple effective charities and let the donor decide. We would just need to set up the payment flow to the charities directly.