{"items": [{"author": "Catriona", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113038591592", "anchor": "fb-10100113038591592", "service": "fb", "text": "As a data point, I used to be heavily involved in the EA movement, now no longer consider myself part of the community, but still give the amount I pledged.", "timestamp": "1569588703"}, {"author": "Loren", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113039529712", "anchor": "fb-10100113039529712", "service": "fb", "text": "What about the relationship with the organization you\u2019re donating to? If you reach out to make an ongoing commitment to them, especially in writing, that creates a relationship that should make you feel both more engaged (so happier) and keep your choice alive in your mind?", "timestamp": "1569589060"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113039529712&reply_comment_id=10100113040572622", "anchor": "fb-10100113039529712_10100113040572622", "service": "fb", "text": "→ I think there are a lot of things people can do to keep themselves engaged, though what is helpful will vary by person:
* Making commitments
* Reading/watching/traveling to keep a closer emotional connection to the work
* Sending letters to your future self
* Keeping from overcommitting yourself and burning out
* Staying up to date on research on charity effectiveness
* Spending time with other people who think this is important
But it's not always going to work, so plans like \"save for five years and donate the sixth\" should be discounted for the chance that by the time you get to the sixth year you'll have decided to use the money for something else (\"I know I was going to donate, but this money right here is a downpayment on a house!\")", "timestamp": "1569589703"}, {"author": "Loren", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113039529712&reply_comment_id=10100113065278112", "anchor": "fb-10100113039529712_10100113065278112", "service": "fb", "text": "→ Yup, all makes sense - just suggesting making a pledge to the org explicitly as another option for how to create \u2018scaffolding\u2019 for your commitment bc it\u2019s an external accountability and relationship", "timestamp": "1569604678"}, {"author": "Ruthan", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113041939882", "anchor": "fb-10100113041939882", "service": "fb", "text": "You could also buy a house, thereby taking yourself out of the running for the standard deduction for the life of your mortgage. ;)", "timestamp": "1569590422"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113041939882&reply_comment_id=10100113042733292", "anchor": "fb-10100113041939882_10100113042733292", "service": "fb", "text": "→ Making a lot of money in a high-tax state/municipality will do that as well. For example, $130k in NYC puts you at about $12k in state+local taxes.", "timestamp": "1569590986"}, {"author": "Shawn", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113041939882&reply_comment_id=10100113053132452", "anchor": "fb-10100113041939882_10100113053132452", "service": "fb", "text": "→ Jeff Kaufman didn't they get rid of state tax deductions from Fed taxes last year?", "timestamp": "1569597648"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113041939882&reply_comment_id=10100113054305102", "anchor": "fb-10100113041939882_10100113054305102", "service": "fb", "text": "→ Oh, thanks, this did change! They didn't eliminate the state and local (SALT) tax deduction, but they capped it at $10k/year starting in 2018.", "timestamp": "1569598677"}, {"author": "Adam", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113042773212", "anchor": "fb-10100113042773212", "service": "fb", "text": "Also, any productive impulse that isn\u2019t gratified leads to that impulse being stifled. Self-development has to be part of the EA analysis.", "timestamp": "1569591032"}, {"author": "Hazel", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113043551652", "anchor": "fb-10100113043551652", "service": "fb", "text": "It also seems relevant to say
1) lifestyle creep--you're more likely to find yourself spending 100k next year if you spent 100k this year, compared to spending 90k both years (and savings won't completely cancel this out)
And this is the bigger one:
2) organizations ask for monthly sustaining donors because it's disruptive to have n dollars at the beginning of the year and not know whether you can afford to spend n/12 or n/6 per month when many of your expenditures are constant. That's even worse if you might have money for 10 employees one year and 5 the next. If a substantial number of people are only giving once every 2 years, that really increases the noisiness of any given year...", "timestamp": "1569591467"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113043551652&reply_comment_id=10100113045158432", "anchor": "fb-10100113043551652_10100113045158432", "service": "fb", "text": "→ 1: I was figuring that the person would set aside their $10k each year whether it's being donated in that year or saved for year six. If you just spend your money as you get it then you're certainly not going to be able to donate $60k in year six on a $100k salary.
2: I'm not convinced that this is why organizations ask for monthly donations: I suspect a lot of it is also that you get more money from people for longer if they make it automatic monthly than if they have to decide to do it each December. Which is pretty much the same thing I'm describing in this post, but at a shorter timescale.", "timestamp": "1569592728"}, {"author": "Hazel", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113043551652&reply_comment_id=10100113045273202", "anchor": "fb-10100113043551652_10100113045273202", "service": "fb", "text": "→ Jeff Kaufman re #2, this is the thing On The Media tells their listeners. Could it be both? Of course it could be. But it's hard to imagine that it doesn't come into play at all....", "timestamp": "1569592899"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113043551652&reply_comment_id=10100113371968502", "anchor": "fb-10100113043551652_10100113371968502", "service": "fb", "text": "→ DAFs can solve (2)", "timestamp": "1569767153"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113043551652&reply_comment_id=10100113372362712", "anchor": "fb-10100113043551652_10100113372362712", "service": "fb", "text": "→ Jeff Kaufman even if annual donations are just as good for planning purposes, I'm willing to believe one every 5 years is not as good", "timestamp": "1569767220"}, {"author": "Taymon", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113045233282", "anchor": "fb-10100113045233282", "service": "fb", "text": "I feel like there has to be a better methodology than pure outside view for deciding what discount rate to set here. I think for a lot of EAs the pure-outside-view discount rate is going to be an overestimate.", "timestamp": "1569592855"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113045233282&reply_comment_id=10100113050532662", "anchor": "fb-10100113045233282_10100113050532662", "service": "fb", "text": "→ For clarity, you mean \"discount rate\" as in \"how much should I discount potential donations next year based on the risk I won't actually make them\" and not \"how much should I discount donations next year due to expecting it's better to act now\", right?", "timestamp": "1569595792"}, {"author": "Taymon", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113045233282&reply_comment_id=10100113054355002", "anchor": "fb-10100113045233282_10100113054355002", "service": "fb", "text": "→ Yes, this is one particular source of time discounting; there are others.", "timestamp": "1569598764"}, {"author": "dmolling", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#NFxnauz4zPCedWoLs", "anchor": "ea-NFxnauz4zPCedWoLs", "service": "ea", "text": "It still seems like it could be worthwhile in the 2-3 year timeline if you were diligent about setting up good systems. I.e. you could set up a separate savings account that you put your yearly (monthly/weekly?) donation into and then donate every 2-3 years.
For me, at least, I think this would do a lot to decrease the cognitive load and temptation to spend. I don't do this currently but am thinking about it. If you can truly think of the money as already donated when in the separate account (maybe a wealth front cash account?) this would solve a lot of the problems. I do think I would end up donating significantly less when bunching if I didn't keep the money separate. ", "timestamp": 1569596336}, {"author": "Ben_Kuhn", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#LeEjBqibKerLuBK8P", "anchor": "ea-LeEjBqibKerLuBK8P", "service": "ea", "text": "→ If you're really worried about value drift, you might be able to use a bank account that requires two signatures to withdraw funds, and add a second signatory whom you trust to enforce your precommitment to donate?
I haven't actually tried to do this, but I know businesses sometimes have this type of control on their accounts, and it might be available to consumers too.", "timestamp": 1569599068}, {"author": "Jeff_Kaufman", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#sEMDMzWWAERey7pPT", "anchor": "ea-sEMDMzWWAERey7pPT", "service": "ea", "text": "→ If ~50% of people drift away over five years it's hard to say how many do over 2-3, but it should be at least 25%-35% [1]. You need pretty large tax savings to risk a chance that large of actually donating nothing.
[1] 13%/year for five years gives you 50%, and I think I'd expect the rate of attrition to slowly decrease over time? 25% for two years and 35% for three is assuming it's linear.", "timestamp": 1569603307}, {"author": "dmolling", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#uz8Lz2an3xzXeX2k6", "anchor": "ea-uz8Lz2an3xzXeX2k6", "service": "ea", "text": "→ → It seems to depend a lot on what it means for someone to no longer be involved in the EA movement. The relevant alternative in my mind isn't donating nothing.
Speaking for myself I can certainly imagine not being involved in the EA movement in 2-3 years. It's a lot harder to imagine myself raiding a dedicated bank account I had set aside for donations. That doesn't mean it's not possible, but if use the population estimates of not being in the EA movement in 2-3 years of 25-30% (which seems reasonable) as my own risk, I'd estimate the risk of raiding a dedicated bank account for charitable donations as a fraction of that - maybe 5%. In that case it could be worth it. Maybe I'll think a little harder about that point if I decide to do it.
I 100% agree with the principal behind your post. The future, including your future identity, is so uncertain that for almost everyone the best time to donate and form altruistic habits is right now. I would only "bunch" if I could do so in a way that allows keeping those good habits. ", "timestamp": 1569856803}, {"author": "Josh", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062", "anchor": "fb-10100113054824062", "service": "fb", "text": "If you're sufficiently wealthy, donate the 60% up front, and then spend the next five years rebuilding your savings. (And think of those savings as a pool that you're going to donate again in five years.)", "timestamp": "1569599078"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062&reply_comment_id=10100113055717272", "anchor": "fb-10100113054824062_10100113055717272", "service": "fb", "text": "→ Josh sure, though I suspect most people in that situation are itemizing donations already?", "timestamp": "1569599833"}, {"author": "David", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062&reply_comment_id=10100113065412842", "anchor": "fb-10100113054824062_10100113065412842", "service": "fb", "text": "→ Doesn't that have the same problem, just offset by one year? I.e., the year after your initial 60% donation, you're in almost the same position as Jeff's post is about. (Except for the fact that you have memory of having donated 60% once, which might be significant.)", "timestamp": "1569604740"}, {"author": "Josh", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062&reply_comment_id=10100113065617432", "anchor": "fb-10100113054824062_10100113065617432", "service": "fb", "text": "→ Well, and you've succeeded in your goal of donating 60% over six years at least once, whereas if you do it on the back end, you might do it zero times. :^ )", "timestamp": "1569604838"}, {"author": "Josh", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062&reply_comment_id=10100113066206252", "anchor": "fb-10100113054824062_10100113066206252", "service": "fb", "text": "→ Jeff: Of the people in your demographic (making $100K, not donating anything now, want to start donating 10%/yr, aren't already itemizing deductions), I don't have a good sense of how many of them are likely to have $60K in savings that they feel they can afford to donate now and replenish over the next six years. People who have been saving, but not donating, presumably? As opposed to people who want to start donating, but haven't yet been doing much saving.", "timestamp": "1569605015"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062&reply_comment_id=10100113066879902", "anchor": "fb-10100113054824062_10100113066879902", "service": "fb", "text": "→ My guess is that the demographic is mostly recent graduates who've been relatively lucky in their initial career prospects?", "timestamp": "1569605447"}, {"author": "Alexander", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062&reply_comment_id=10100113111001482", "anchor": "fb-10100113054824062_10100113111001482", "service": "fb", "text": "→ I did something like this, putting my total planned 2018-2021 donations (admittedly rather less than 10% per year) into a DAF in 2018. (Though I'm considering raising my donation rate in 2020 so it might not end up lasting through 2021 after all.)", "timestamp": "1569623488"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113054824062&reply_comment_id=10100113372582272", "anchor": "fb-10100113054824062_10100113372582272", "service": "fb", "text": "→ Even if it doesn't work initially, this suggestion eventually works for anyone who will eventually have 5x their annual donation in savings.", "timestamp": "1569767389"}, {"author": "Vaniver", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#aCJ9EioRJAvnEbjPw", "anchor": "lw-aCJ9EioRJAvnEbjPw", "service": "lw", "text": "It's also inconvenient for charities to have variable income streams instead of dependable donors (altho this is a risk you'll be facing anyway if someone is frequently re-evaluating donation targets), but you can work around this by having a donor-advised fund. Donate to the fund in year 1, collect the deduction, and this disperse money from the fund at a constant pace each year (until you hit year N, at which point you donate again).", "timestamp": 1569600489}, {"author": "Gurkenglas", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#deedFYgWBk7qpAWFi", "anchor": "lw-deedFYgWBk7qpAWFi", "service": "lw", "text": "→ The charity could also do this itself, right? Take money, don't some of it yet so it has something to spend tomorrow.\n", "timestamp": 1569615859}, {"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113079654302", "anchor": "fb-10100113079654302", "service": "fb", "text": "Do remember that if you earn a 100K in MA you will pay 5,000 in state taxes, which will also be deductible on your Federal return. I also note that charitable donations are not deductible on MA tax returns. Your larger point about managing the timing still stands in this case (I learned this concept in my tax class back before you were born).", "timestamp": "1569611172"}, {"author": "Pattern", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#bdBED8Q2nusX3KaoD", "anchor": "lw-bdBED8Q2nusX3KaoD", "service": "lw", "text": "While we don't have good data on the rate at which this happens, in a small sample about half of people in the effective altruism movement in 2013 were no longer involved five years later. If you think your current self is correct to be altruistic and don't want to leave donations up to a likely less-generous future person then bunching donations over several years is harmful: the substantial possibility that you don't actually donate outweighs the tax savings.
It seems like this should be done as a calculation rather than moving directly from words to a course of action.", "timestamp": 1569612765}, {"author": "jkaufman", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#LmhACZas9agjpzuMB", "anchor": "lw-LmhACZas9agjpzuMB", "service": "lw", "text": "→ Are you saying you want an explicit calculation comparing the tax gains from bunching to the risk of never donating? The exact calculation will depend on people's individual financial circumstances, but for the cases I've looked at, it comes out strongly against long-term bunching.\n
For example, consider someone earning $100k in MA and donating 10%. They have ~$5k in MA tax which they could potentially deduct if itemizing, but let's say no other deductions. Six year bunching would be five years of donating $0 and taking the $12k standard deduction, and then one year of donating $60k and deducting $65k. This moves your year six federal income tax from $15k to $3k, saving you $12k in taxes on $60k in donations or 20%. That is clearly not worth a 50% chance of donating $0.\n
While people should consider their own tax circumstances and propensity to stop being altruistic, I think we should have a community default of \"donate as you go, to a donor-advised fund if need be\".\n", "timestamp": 1569621227}, {"author": "Pattern", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#pWubksSRSPqX9Pavk", "anchor": "lw-pWubksSRSPqX9Pavk", "service": "lw", "text": "→ → Are you saying you want an explicit calculation comparing the tax gains from bunching to the risk of never donating?
I don't disagree with your conclusion, I haven't done the math yet. (Perhaps I should post a longer algorithm/closed form solution, or code up a widget.) It was a general nitpick regarding process, on a great post.Six year bunching would be five years of donating $0 and taking the $12k standard deduction, and then one year of donating $60k and deducting $65k. That is clearly not worth a 50% chance of donating $0.
Could bunching be implemented in a different order? Donate the 60k in year one, then 0 the following 5 years?* I think we should have a community default of "donate as you go, to a donor-advised fund if need be".
That seems like a reasonable default. Is there a particular fund you had in mind?*
*I don't know much about this area. Prior to reading this post I'd never heard of donor-advised funds before. If these are basic questions I'd understand after reading a book on the subject, I'd appreciate recommendations.", "timestamp": 1569642659}, {"author": "jkaufman", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#n6vzHckxeuhtqZkRt", "anchor": "lw-n6vzHckxeuhtqZkRt", "service": "lw", "text": "→ → → \n
It was a general nitpick regarding process\n\n
In this case I'd done the rough math before posting to make sure it was in the right range, but as someone reading the post there wasn't a way for you to know that ;)\n\n
Donate the 60k in year one, then 0 the following 5 years?\n\n
Sure, except extremely few people on a $100k salary who start wanting to donate 10% will have $60k in savings-they-can-do-without sitting around.\n\n
Is there a particular fund you had in mind?\n\n
Have a look at https://80000hours.org/2013/06/how-to-create-a-donor-advised-fund/ For comparing DAFs the main thing is to look at the fees and pick a cheap one, since it's the same product everywhere. I know people who've used Vanguard and Fidelity.\n", "timestamp": 1569668265}, {"author": "Todd", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113084270052", "anchor": "fb-10100113084270052", "service": "fb", "text": "Considering that people tend to make more money as they get older, this seems... pretty unfortunate.", "timestamp": "1569613247"}, {"author": "Gurkenglas", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#RNF3kWqExNHmccPCZ", "anchor": "lw-RNF3kWqExNHmccPCZ", "service": "lw", "text": "The same reasoning also says to take out loans to bunch the donation now rather than later, to align your future self with your present self because paying off your loans is in your own best interest.\n", "timestamp": 1569615771}, {"author": "Liron", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#rcQHsGeZizbsXezo3", "anchor": "lw-rcQHsGeZizbsXezo3", "service": "lw", "text": "→ Hmm I actually think there might be a psychologically optimal idea close to this.\n
Let\u2019s say you expect to earn $200k/yr for the next 10 years and you want to donate 10% of your income to charity, which is $20k/yr over 10 years, which has a net present value of about $100k. Sell someone an Income Share Agreement (ISA) for $100k which you donate now, then pay the ISA 10% of your income for 10 years.\n
This could be, like you say, a good commitment mechanism for your present self to get the upper hand over your future self. The ISA protects the downside risk of having a loan you can\u2019t pay if your income unexpectedly decreases.\n", "timestamp": 1569700853}, {"author": "Carl", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113112862752", "anchor": "fb-10100113112862752", "service": "fb", "text": "If your donation bunching leads you to invest the funds for longer, you'll also give a lot more money in expectation and get more tax benefits by donating appreciated stock and deducting losses.", "timestamp": "1569624248"}, {"author": "Alexander", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113112862752&reply_comment_id=10100113114205062", "anchor": "fb-10100113112862752_10100113114205062", "service": "fb", "text": "→ If having more money later (at the market rate of return) were better for the charities they could invest themselves, so you aren't actually donating more utility this way.
The availability of donor-advised funds means that decisions about donation bunching for tax purposes and decisions about how long to invest money before granting are basically totally uncoupled anyway.", "timestamp": "1569624789"}, {"author": "Carl", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113112862752&reply_comment_id=10100113114788892", "anchor": "fb-10100113112862752_10100113114788892", "service": "fb", "text": "→ \"If having more money later (at the market rate of return) were better for the charities they could invest themselves, so you aren't actually donating more utility this way.\"
But even charities with fairly stable impact per dollar over time don't do this (often erroneously on the part of the charity or donors who would punish saving).", "timestamp": "1569625092"}, {"author": "Alexander", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113112862752&reply_comment_id=10100113116146172", "anchor": "fb-10100113112862752_10100113116146172", "service": "fb", "text": "→ Carl Lots of large foundations definitely do, and you can also do it yourself in a donor advised fund without having to constrain your donation bunching. (And with better tax treatment than you'd get investing in a taxable account and donating later.)", "timestamp": "1569625743"}, {"author": "Carl", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113112862752&reply_comment_id=10100113122493452", "anchor": "fb-10100113112862752_10100113122493452", "service": "fb", "text": "→ Sure, but GiveWell top charities won't save for 10 years so if you want to, e.g. transfer more cash to the poor by waiting 10 years you won't achieve that by giving to GiveDirectly without special arrangements.", "timestamp": "1569628323"}, {"author": "Alexander", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113112862752&reply_comment_id=10100113132009382", "anchor": "fb-10100113112862752_10100113132009382", "service": "fb", "text": "→ Given economic growth rates in poor countries, I expect poor people to probably benefit from the money less in 10 years. And I expect GiveDirectly to be a better judge of this question than I am.", "timestamp": "1569632034"}, {"author": "Carl", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113112862752&reply_comment_id=10100113174379472", "anchor": "fb-10100113112862752_10100113174379472", "service": "fb", "text": "→ So far the income of recipients has not been rising very fast because GiveDirectly targets the poorest and there have been people at near-subsistence poverty for all of human history. There are still hundreds of millions of those, and that likely won't end without enough warning to distribute the money.
https://en.wikipedia.org/wiki/Extreme_poverty", "timestamp": "1569638790"}, {"author": "lionhearted", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#Qu9TYGTTxsNThKqew", "anchor": "lw-Qu9TYGTTxsNThKqew", "service": "lw", "text": "Do we have any lawyers here at LessWrong?
Idea:
Would it be possible to legitimately write some sort of standardized financial instrument that functions as a loan with no repayment date, with options for conversion into charitable donation?
Speculations (non-lawyer here) —
(1) Maybe there's something equivalent to a SAFE Note (invented by YCombinator to simplify and standardize startup financing in a way friendly to both parties). It seems like a decent jumping-off point:
https://en.wikipedia.org/wiki/Simple_agreement_for_future_equity_(SAFE)
(2) On the other hand, there's a variety of mechanisms where you can't just do clever stuff. And there's a variety of arcane rules. You can, I think, donate property that's appreciated in value without paying capital gains first for instance, but maybe there's specific definitions around the timing of cash flows, donations, and deductions?
(3) On the other-other hand, seems like American tax policy in general is very amenable to people supporting worthy charitable causes.
(4) On the other-other-other-hand, you'd have to make sure it's not game-able and doesn't result in strange second-order consequences.
(5) And finally, if it's ambiguous, it seems like the type of thing where it'd be possible to get some sort of preliminary ruling from the relevant authorities. (Presumably the Treasury/IRS, but maybe someone else.)
Seems like a good idea though? If someone donates $10k a year for 5 years, it seems reasonable that they'd be able to write off that $50k at the end of the end of 5 years.", "timestamp": 1569628672}, {"author": "jkaufman", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#EPbRCjx7bAxT82zb3", "anchor": "lw-EPbRCjx7bAxT82zb3", "service": "lw", "text": "→ I don't know much about this, but one thing that comes to mind is that if it's optional (which I think it has to be to postpone the effective date of the donation?) then what happens if the 'donor' doesn't choose to convert it to a donation?\n", "timestamp": 1569668472}, {"author": "FactorialCode", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#ejRfWwFubBeAPEYpS", "anchor": "lw-ejRfWwFubBeAPEYpS", "service": "lw", "text": "→ → \n
then what happens if the 'donor' doesn't choose to convert it to a donation?\n\n
Same thing that happens when you fail to meet the requirements for any other financial instrument. You go into debt, your credit rating takes a plunge, and debt collectors will start harassing you for money.\n", "timestamp": 1569704420}, {"author": "rossry", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#3pKyXKdPMXWBNxLDC", "anchor": "lw-3pKyXKdPMXWBNxLDC", "service": "lw", "text": "Proposal: Five friends in this situation write $10k checks[1] to a sixth. They all have a long chat about their altruist values and beliefs. The sixth donates $60k to a variety of EA causes.\n
Question: Just how likely / unpleasant would the ensuing IRS audit be?\n
(There's also a micro-donor-lottery version of this, except the individual contributions are personal gifts and the full $60k is a charitable donation.)\n
[1] Actually, you want this to be something like $7k, since the tax deduction from donating is worth [your marginal income tax rate] on the amount, roughly 30%. Formally, $10k less the tax benefits from donating $10k.\n", "timestamp": 1569631316}, {"author": "Vaniver", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#YgJktsMspB7YnthGR", "anchor": "lw-YgJktsMspB7YnthGR", "service": "lw", "text": "→ This 'works' except for the fact that any sort of enforceable contract (that, in year 6, it will eventually get around to you) will mean they are no longer gifts (and thus aren't considered personal gifts underneath the relevant threshold). But even if it doesn't get around to you, this is an improvement over not having anything to deduct yourself.", "timestamp": 1569640168}, {"author": "jkaufman", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#x4X4fCDPHbknkdeiN", "anchor": "lw-x4X4fCDPHbknkdeiN", "service": "lw", "text": "→ → On the other hand, the social expectation of \"I gave to you in your year, you can't back out now!\" is a strong commitment device.\n", "timestamp": 1569668340}, {"author": "rossry", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#C2BR9Fh7PgPS6Nzgu", "anchor": "lw-C2BR9Fh7PgPS6Nzgu", "service": "lw", "text": "→ → → I also think that if the \"sixth friend\" donates $10k in line with each other friend's values and beliefs (as a result of social expectation, not contract), then there's no particular benefit to being the one who has to handle the money, and you don't need to trust in multi-year commitments.\n", "timestamp": 1569718863}, {"author": "WilliamKiely", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#Q94TMyk64QEpXJvrY", "anchor": "lw-Q94TMyk64QEpXJvrY", "service": "lw", "text": "→ Why not instead: The $10k/year donor instead writes the $10k check to a friend who is already planning on itemizing that year and that friend then donates an amount equal to ($10k + the additional tax benefit they receive) such that that friend's after-tax income is the same.\n", "timestamp": 1569707664}, {"author": "rossry", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#4xqgDpNMZRL8vntRF", "anchor": "lw-4xqgDpNMZRL8vntRF", "service": "lw", "text": "→ → Your suggestion is correct, though it seemed too messy (and nonessential) to explain for the sake of an off-the-cuff proposal. I added a footnote to clarify this above, though.\n", "timestamp": 1569718386}, {"author": "Linchuan", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113185976232", "anchor": "fb-10100113185976232", "service": "fb", "text": "Several other considerations:
1. At least in tech, a lot of high-paying states also have a fairly high state income tax (Washington State/Seattle is a notable exception). There's a cap of $10K on how much state income tax you can deduct from your federal. Since the standard deduction is 12K, this means the discontinuity is only at $2K rather than $12K.
2. Many employers have an annual donation matching program. If the match is significant (and some are as high as 300(!) percent), this will swamp tax considerations for at least the matched amount.
Eg, Google does 100% matching for up to 6K. Last year, I didn't have too much time to think about donations, so I was planning to only donate 6K (and get 6K matching) and receive the standard deduction and donate more this year. I realized too late that combined with my state income taxes, I was already above the 12K mark.
3. Donating 60% of your income probably puts you on a lower marginal tax bracket, which means not only will you have a lower tax base, but the average tax rate of your remaining $s will be lower. The difference doesn't seem to be very high in practice however.", "timestamp": "1569646008"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113185976232&reply_comment_id=10100113209983122", "anchor": "fb-10100113185976232_10100113209983122", "service": "fb", "text": "→ Linchuan in general, people in tech will so also be earning more, which again changes what makes sense", "timestamp": "1569675108"}, {"author": "John_Maxwell", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#gC6yPJrAZhJm5HZgi", "anchor": "ea-gC6yPJrAZhJm5HZgi", "service": "ea", "text": "Another argument against extreme donation bunching: Because marginal tax rates get higher as your income increases, being able to deduct $40K is not necessarily twice as valuable as being able to deduct $20K.\n", "timestamp": 1569676884}, {"author": "MaxGhenis", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#bGsFHfECJZkNJ4N5g", "anchor": "ea-bGsFHfECJZkNJ4N5g", "service": "ea", "text": "→ If you expect your income to increase over time (all else equal this is reasonable), that's an extra reason to bunch. However, it throws a wrench in an alternative to front-load bunching, i.e. give 50% in year 1 and then only 10% of your raise since year 1 in the subsequent four years.", "timestamp": 1577821602}, {"author": "WilliamKiely", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#W739nt6Sxk3cT292Q", "anchor": "lw-W739nt6Sxk3cT292Q", "service": "lw", "text": "It's worth noting that the possible tax benefits are small compared to the benefit of getting one's donations matched: https://forum.effectivealtruism.org/posts/9ZRenh6bERDkoCfdX/eas-should-invest-all-year-then-give-only-on-giving-tuesday\n", "timestamp": 1569708379}, {"author": "jkaufman", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#2ZC4gmS32GsM7ditG", "anchor": "lw-2ZC4gmS32GsM7ditG", "service": "lw", "text": "→ I'm pretty pessimistic about GivingTuesday persisting as a way for EAs to have a large counterfactually valid impact. \"Free money for sufficiently quick and organized folks\" won't last.\n", "timestamp": 1569720451}, {"author": "WilliamKiely", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#hvcxcy9kRochp2hv4", "anchor": "lw-hvcxcy9kRochp2hv4", "service": "lw", "text": "→ → I agree, which is why the large benefit of getting one's donations matched compared to the tax benefits of bunching provides another (stronger) reason (in addition to the value drift reason) for people like the GWWC-donor in your original post to donate this year (on Giving Tuesday) rather than bunch by taking the standard deduction this year and giving in 2020 (or later) instead. (This is the implication I had in mind when I wrote my first comment; sorry for not writing it out then.)
I myself am in this situation. As such:If it turns out that Facebook doesn't offer an exploitable donation match this year, then I plan to not donate and take the standard deduction instead.In the hypothetical world where free matching money was guaranteed to always be available every year, I would also plan to not donate this year and would take the standard deduction instead.However, as seems most likely to be the case, if Facebook does offer an exploitable match this Giving Tuesday and it seems significantly less likely that I could get matched again in 2020 (as we both agree seems to be the case) then I will donate this Giving Tuesday to take advantage of the free money while it lasts.", "timestamp": 1569955733}, {"author": "WilliamKiely", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#dCuWFacTqJzy6RPhp", "anchor": "ea-dCuWFacTqJzy6RPhp", "service": "ea", "text": "It's worth noting that the possible tax benefits are small compared to the benefit of getting one's donations matched: https://forum.effectivealtruism.org/posts/9ZRenh6bERDkoCfdX/eas-should-invest-all-year-then-give-only-on-giving-tuesday\n", "timestamp": 1569708392}, {"author": "WilliamKiely", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#ATvEzZqDbXKzkFNBF", "anchor": "ea-ATvEzZqDbXKzkFNBF", "service": "ea", "text": "→ On the LessWrong mirror of this post, Jeff_Kaufman replied to my above comment:I'm pretty pessimistic about GivingTuesday persisting as a way for EAs to have a large counterfactually valid impact. "Free money for sufficiently quick and organized folks" won't last.
I replied:I agree, which is why the large benefit of getting one's donations matched compared to the tax benefits of bunching provides another (stronger) reason (in addition to the value drift reason) for people like the GWWC-donor in your original post to donate this year (on Giving Tuesday) rather than bunch by taking the standard deduction this year and giving in 2020 (or later) instead. (This is the implication I had in mind when I wrote my first comment; sorry for not writing it out then.)I myself am in this situation. As such:- If it turns out that Facebook doesn't offer an exploitable donation match this year, then I plan to not donate and take the standard deduction instead.- In the hypothetical world where free matching money was guaranteed to always be available every year, I would also plan to not donate this year and would take the standard deduction instead.- However, as seems most likely to be the case, if Facebook does offer an exploitable match this Giving Tuesday and it seems significantly less likely that I could get matched again in 2020 (as we both agree seems to be the case) then I will donate this Giving Tuesday to take advantage of the free money while it lasts.", "timestamp": 1569956154}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113371519402", "anchor": "fb-10100113371519402", "service": "fb", "text": "I think Donor Advised Funds can largely solve this problem. Specific suggestion:
Continue to think of money in the DAF as yours, and don't count it toward the pledge until it leaves the DAF. (Nb: I have no idea whether the pledge authors are okay with this accounting practice.)
Then you're still in the habit of donating \"your\" money each year.", "timestamp": "1569766896"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113371519402&reply_comment_id=10100113371614212", "anchor": "fb-10100113371519402_10100113371614212", "service": "fb", "text": "→ Oh, sorry, I think I misunderstood your worry: You're concerned about people not following through on the bunching commitment?
Putting the donation years before the non-donation years solves that, no?", "timestamp": "1569767021"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113371519402&reply_comment_id=10100113373974482", "anchor": "fb-10100113371519402_10100113373974482", "service": "fb", "text": "→ David most people can't afford to do that, though. Donating $60k on $100k salary is very hard", "timestamp": "1569768253"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113371519402&reply_comment_id=10100113375072282", "anchor": "fb-10100113371519402_10100113375072282", "service": "fb", "text": "→ Jeff Kaufman as I mentioned in the other thread:
Maybe not initially, but I think most people can save up 6x their annual donation eventually.
So maybe big bunching doesn't work at first, but if the pledge is for your while working life... The strategy can help for most of that time.", "timestamp": "1569769105"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113371519402&reply_comment_id=10100113375666092", "anchor": "fb-10100113371519402_10100113375666092", "service": "fb", "text": "→ And it doesn't have to be 6x the first time. Maybe just 3x bunching to start with.", "timestamp": "1569769349"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113371519402&reply_comment_id=10100113375730962", "anchor": "fb-10100113371519402_10100113375730962", "service": "fb", "text": "→ The optimal allocation between saving (for future bunching) and bunching now will depend on the particular amounts I think.", "timestamp": "1569769413"}, {"author": "Alexandra", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113385082222", "anchor": "fb-10100113385082222", "service": "fb", "text": "If you have other deductions like Medicare expenses that you itemize and it ended up over the $12,000 does it still make sense to do the charities your way? Or does it not matter at that point?", "timestamp": "1569775303"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113385082222&reply_comment_id=10100113385416552", "anchor": "fb-10100113385082222_10100113385416552", "service": "fb", "text": "→ Alexandra once you're over the $12k standard deduction amount, yes, any donations are fully tax deductible and there's no reason to divide things across years", "timestamp": "1569775570"}, {"author": "Alexandra", "source_link": "https://www.facebook.com/jefftk/posts/10100113036306172?comment_id=10100113385082222&reply_comment_id=10100113393096162", "anchor": "fb-10100113385082222_10100113393096162", "service": "fb", "text": "→ Jeff Kaufman thanks for clarifying!", "timestamp": "1569779313"}, {"author": "philh", "source_link": "https://www.lesswrong.com/posts/fXKSQue2kbzwEN3R9#xwEgM8GgDMKfw685e", "anchor": "lw-xwEgM8GgDMKfw685e", "service": "lw", "text": "I suspect that people who've already been involved for a while are more likely to still be involved five years later. So perhaps people should initially donate yearly, and then at some point switch to batched donations.\n
(But I still wouldn't advise this. For one thing, I also expect people are more likely to drop out if they haven't donated anything for four years, especially if the extra money has just been sitting in a big pile with the rest of their money and will feel psychologically painful to lose.)\n", "timestamp": 1569877326}, {"author": "Cullen_OKeefe", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#LRM7FoJmwfH56itgR", "anchor": "ea-LRM7FoJmwfH56itgR", "service": "ea", "text": "Note that you could probably make an enforceable contractual obligation to give in bunched donations, which would hedge against value drift.", "timestamp": 1570161063}, {"author": "Jeff_Kaufman", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#FLfxXNmeiMTHdX7pw", "anchor": "ea-FLfxXNmeiMTHdX7pw", "service": "ea", "text": "→ I wonder whether it would be worth building some standard terms for this and trying to make it a thing?", "timestamp": 1570468710}, {"author": "Cullen_OKeefe", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#otNPEPdxzMhnj4WtQ", "anchor": "ea-otNPEPdxzMhnj4WtQ", "service": "ea", "text": "→ → Yes, it might be. Feel free to sync offline if you want to investigate this.\n", "timestamp": 1570558095}, {"author": "Cullen_OKeefe", "source_link": "https://forum.effectivealtruism.org/posts/MAod5gvcQgdxaXdWA#oqEbwnXSkN43NvZdN", "anchor": "ea-oqEbwnXSkN43NvZdN", "service": "ea", "text": "Relevant for 2020: Due to the CARES Act, individuals can deduct 100% of their AGI this year.\n", "timestamp": 1592956242}]}