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Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Another Basefund, published by bob on June 2, 2022 on The Effective Altruism Forum. In January, the Center for Effective Altruism awarded me a grant to set up Basefund, an emergency fund for donors to effective charities. The original plan is described here. A summary: The charity's goals are to: Encourage large donations to EA-related causes by providing donors with a safety net, thereby minimizing risk Help effective altruists in financial need Foster a healthy EA community To achieve these goals, the charity will maintain an emergency fund. If effective altruists encounter financial trouble, they can apply to recoup up to 50% of their EA-related donations from this fund. The recoupment process will be similar to filing an insurance claim, but less strict. If someone requests a fraction of what they have donated to EA-related charities, they will usually get their money back without difficulty. We will not have to worry about fraud nearly as much as insurers, because donors can only recoup up to half of what they originally donated. Based on my initial research, it appears that no tax-exempt charity of this type has been registered anywhere in the world. In addition, it seems likely that Basefund could be designated as a charity in some countries, but not in others. I have spoken to tax lawyers in the UK and in the Netherlands, as well as to a US accountant. Although the US accountant and the UK lawyers were quite optimistic, I ended up taking the Dutch route. In the UK and in the US, finding out whether the respective tax authorities would consider Basefund a legitimate charity would require going through all the steps of setting up the charity beforehand. By contrast, the Dutch tax agency allows for something called a preliminary consultation (vooroverleg), where they make a legally binding judgment on a hypothetical legal structure. Besides that, I am much more familiar with Dutch law, and the Dutch lawyer seemed very well-informed and well-prepared, while being less expensive than the other options. Unfortunately, the result of the vooroverleg was that the charity as described above cannot be registered in the Netherlands. The main reason for this is that those who would directly benefit directly from the charity (the donors) are relatively well-off. Even before receiving the reply from the Dutch tax agency, I was considering a different structure, inspired by the bread fund. In the Netherlands, a bread fund is a collective consisting of uninsured entrepreneurs. If one member gets sick, the others each make a small pre-agreed donation to that person. The feature of a bread fund that is most relevant to Basefund is that it does not hold assets; it only coordinates funding. Importantly, a bread fund is not registered as a charity. Yet, because no one member pays more than a few hundred euros to another, no gift tax is paid. The new plan for Basefund is as follows: Find funders: people who are willing to donate directly to effective altruists in financial trouble. Ask funders to earmark funds in their own accounts for the Basefund emergency fund and then inform us of the amount. Create a website where effective altruists can apply for financial assistance. Then, if an application is received: The Basefund board reviews the application. If the Basefund board accepts the application, they will ask a funder to donate an amount directly to the claimant from their earmarked funds. If the amount is large enough that a gift tax would be imposed on a single donation, the board will ask multiple funders to donate smaller amounts. Funders confirm their donations. If funders are unavailable, the Basefund board contacts other funders. Crucially, because funders donate directly to applicants, Basefund does not require tax-exempt status. The lawyer I’ve consulted says the organ...