Employees at EA orgs and people doing direct work are often also donors/pledgers to other causes. But charitable donations are not always exactly 1-1 deductible from income taxes. E.g., in the USA it’s only deductible if you forgo the standard deduction and ‘itemize your deductions’, and in many countries in the EU there is very limited tax deductibility.
So, if you are paid $1 more by your employer/funded and donate it to the Humane League, Malaria Consortium, etc, the charity only ends up with maybe $0.65 on the margin in many cases.There are ways to do better at this (set up a DAF, bunch your donations…) but they are costly (DAF takes fees) and imperfect (whenever you itemize you lose the standard deduction if I understand.)
Proposal
Funders/orgs (e..g, Open Phil, RP, FHI, CEA) could agree that employees are allowed relinquish some share of their paycheck into some sort of general fund. The employees who do so are allowed to determine the use of these funds (or ‘advise on’, with the advice generally followed).
Key anticipated concerns --> responses
Concern: pressure
This will lead to a ‘pressureto donate/relinquish’ if the employers, managers, funders are aware of it
Response: This process could be managed by ops and by someone at arms-length who will not share the data with the employers/managers/funders.
Details need working out, obviously, unless something like this already exists
Concern—Legal issues
Is this feasible? Would these relinquishments be seen by governments as actually income?
Response: ??
Concern—crowding out
If the funder knows that the people/orgs it funds gives back to charities, they may shift their funding away from these charities, nullifying the employees counterfactual impact
Response: This is hardly a new issue, hardly unique to this context; it’s a major question for donors in general, through all modes; so maybe not so important to consider here.
… To the extent it is important, it could be reduced if we can keep the exact target and amount of the donations unknown to the funders
Concern—“Org reputation … why not give back to the org?”
Maybe a stretch, but I could imagine someone arguing “If your employees ask you to redirect paychecks to a fund, which largely goes to the Humane League, Malaria Consortium, … does this indicate your employees don’t think RP is the best use of funds”?
Responses: Unlikely to be a concern. Employees may want to ‘hedge their bets’ because of moral uncertainty, and because of the good feeling they get from direct impact of donations.
Responses: Keeping the recipient of these funds hidden to outsiders
Modest proposal on a donation mechanism for people doing direct work?
(Tag: Donations, efficiency, taxes, administrative innovation)
Preamble
Employees at EA orgs and people doing direct work are often also donors/pledgers to other causes. But charitable donations are not always exactly 1-1 deductible from income taxes. E.g., in the USA it’s only deductible if you forgo the standard deduction and ‘itemize your deductions’, and in many countries in the EU there is very limited tax deductibility.
So, if you are paid $1 more by your employer/funded and donate it to the Humane League, Malaria Consortium, etc, the charity only ends up with maybe $0.65 on the margin in many cases.There are ways to do better at this (set up a DAF, bunch your donations…) but they are costly (DAF takes fees) and imperfect (whenever you itemize you lose the standard deduction if I understand.)
Proposal
Funders/orgs (e..g, Open Phil, RP, FHI, CEA) could agree that employees are allowed relinquish some share of their paycheck into some sort of general fund. The employees who do so are allowed to determine the use of these funds (or ‘advise on’, with the advice generally followed).
Key anticipated concerns --> responses
Concern: pressure
This will lead to a ‘pressure to donate/relinquish’ if the employers, managers, funders are aware of it
Response: This process could be managed by ops and by someone at arms-length who will not share the data with the employers/managers/funders.
Details need working out, obviously, unless something like this already exists
Concern—Legal issues
Is this feasible? Would these relinquishments be seen by governments as actually income?
Response: ??
Concern—crowding out
If the funder knows that the people/orgs it funds gives back to charities, they may shift their funding away from these charities, nullifying the employees counterfactual impact
Response: This is hardly a new issue, hardly unique to this context; it’s a major question for donors in general, through all modes; so maybe not so important to consider here.
… To the extent it is important, it could be reduced if we can keep the exact target and amount of the donations unknown to the funders
Concern—“Org reputation … why not give back to the org?”
Maybe a stretch, but I could imagine someone arguing “If your employees ask you to redirect paychecks to a fund, which largely goes to the Humane League, Malaria Consortium, … does this indicate your employees don’t think RP is the best use of funds”?
Responses: Unlikely to be a concern. Employees may want to ‘hedge their bets’ because of moral uncertainty, and because of the good feeling they get from direct impact of donations.
Responses: Keeping the recipient of these funds hidden to outsiders