Getting money out of politics… and into charity

(Edit: this post is now part of a two-part series. If the idea I describe below sounds interesting, see here for further analysis!)

Across the political spectrum, Americans agree that there is too much money in politics. In a 2015 New York Times/CBS News poll, 84% of Americans said money has “too much” influence on American political campaigns. In a 2018 Pew poll, 77 percent said there should be “limits on the amount of money individuals and groups can spend on campaigns.” The two reasons I hear most often for this view are that it gives the rich disproportionate power and that it makes politicians beholden to their donors.

I also believe that there is too much money in politics, but primarily for a different reason: it all seems like such a waste. If you give $100 to Demi the Democrat and I give $100 to Rebecca the Republican, the result is basically the same as if we had kept our money, except that an extra $200 is spent on dueling TV ads and we are each $100 poorer. Game theoretically, you and I have just played defect-defect in the prisoner’s dilemma.

Instead of donating $100 to our respective candidates, we could instead make a deal to donate our $100 to charity. This would make us happier — our money was now spent productively instead of canceling out — and it would make the world better off.

This fact led me to the following idea: a platform that would collect money from donors wishing to contribute to competing candidates and send equal amounts of money on both sides to charity. For example, suppose that $10 million were pledged to Demi and $8 million to Rebecca through this platform. Then $16 million ($8 million on both sides) would be sent to charity and Demi would receive the remaining $2 million.

I’m really excited about this idea for three reasons.

First (and most importantly), the platform has a lot of potential to make the world a better place. If donated effectively, money can save lives at a rate of $2,000 per life. For comparison, $7 billion was spent on the 2016 election. If just one tenth of one percent of that money had instead gone to effective charitable causes, about 3,500 lives would have been saved. And that’s just in one election cycle, under a pretty conservative estimate of how much money could get donated through the platform if it were implemented and publicized effectively.

The second reason that I’m excited about this idea is intellectual in nature. The hardest problems for us to solve as a society are the ones where if everyone follows incentives, we end up in a really bad place. Such problems have many varieties, each of which has its own name: the prisoner’s dilemma; the multipolar trap; the tragedy of the commons; the Malthusian trap. Scott Alexander wrote an excellent piece on these kinds of problems, where he identified multi-party cooperation as our primary tool (and only hope) to solve such problems. Scott argues that continually building institutions and mechanisms that encourage cooperation is necessary for our civilization to continue existing.

Often we use governments for such institutions: the primary purpose of regulation, in my view, is to align the incentives of people, corporations, and other entities with society’s interests. For instance, without pollution regulations, every company would dump toxic chemicals into our air and water, for that is the cheap thing to do. But by punishing pollution, we change companies’ incentives in a way that (hopefully) makes the costs of polluting not worth the benefits.

But using a government to facilitate cooperation is hard. It requires having a strong-enough enforcement mechanism (executive branch). It requires that the government be functional enough to pass laws. It requires that the people responsible for passing laws work in the interest of the populace.

But in some cases we don’t need a government or threats of punishment to facilitate cooperation. These are cases where people want to cooperate, if only there were a way for them to do so. In such cases, all it takes is to build the cooperation mechanism and practically everyone ends up happier (this is in contrast to the pollution example above, where companies would prefer that the mechanism not exist at all). The problem of money in politics falls squarely into this category, and the platform that I suggested would help connect people on want to cooperate.

The academic field of designing structures that change people’s incentives in a way that improves outcomes is called mechanism design. This is the field that I studied most extensively in undergrad and the field that I’m most likely to do my PhD in. While most of my work in mechanism design has been pretty theoretical, I’d be thrilled if some of my more practical thoughts on the matter ended up improving the world.

Finally, the third reason I’m excited about this idea is that it has only recently gained the potential to be successful. The platform I’m suggesting likely couldn’t have been succeeded more than ten years ago, because it relies on a sophisticated, widely-used Internet. Furthermore, in the last ten years we have witnessed a substantial proliferation of money in politics, perhaps due to the Citizens United ruling. The increase of money in politics has raised the ceiling of how much money the platform could redirect from politics to charity. The fact that the platform is on the frontier of what’s possible means that we can be optimistic that the platform could work well even though no one has successfully implemented it yet.

***

I am not the first to have had this idea. Several years ago, UCLA law professor Eric Zolt founded Repledge in an attempt to do the same thing. To my knowledge this effort didn’t get off the ground (perhaps it came too early), but I would be excited to give it another shot. I’ve run the idea by several people and have received some good questions about how the platform would work, as well as potential concerns. Here are some of those questions and my answers to them.

Which election campaigns would this platform operate for?

The platform makes the most sense for races with two main candidates, so I’m envisioning the platform for general rather than primary elections. The platform would bring the greatest benefit from big-money, high profile races such as presidential general elections (see the discussion below on the effect of depriving campaigns of funding). The platform would likely be a net benefit for general elections to governorships and Senate seats, as well as some House races. I doubt that it’s a good idea for state legislative races.

Why would someone contribute to the platform instead of their preferred candidate?

Imagine you support Demi. You have two options. You could give Demi your $100, or you can give it to the platform. If you give it to the platform, one of two things will happen: either your $100 will end up going to Demi (just as if you donated to her to begin with), or your $100 will be matched. If your $100 is matched, then by donating you’ve accomplished two things. First, you have caused $200 to be sent to charity (your own money and the money of the Rebecca supporter you were matched with). And second, you have deprived Rebecca’s campaign of $100 (the $100 of the Rebecca supporter you were matched with, which would have gone to Rebecca but will instead go to charity). The second benefit alone — depriving Rebecca’s campaign of $100 — is probably almost equivalent to the benefit of Demi having $100 more to spend (unless you think a dollar is much more valuable to Demi than to Rebecca — see below for more discussion of this), and on top of that you’ve caused $200 to go to charity. So by donating your $100 to the platform, the worst case outcome is that your money is not matched and goes to Demi, and the best case outcome is substantially better. Thus, it makes more sense for you to contribute to the platform instead of to Demi.

Which charities will the matched sums go to?

My favored implementation would be for the platform to have a wide range of different charities to choose from. Each donor would get to choose which charity their money would go to, if matched.

This charity would (to some degree) deprive campaigns of funding. Isn’t that bad for democracy?

There are legitimate concerns here, and they come in a few flavors. I’ll address them one at a time (concerns are in bold).

  • If a campaign doesn’t have money, they won’t be able to make themselves known to the electorate.

This is probably true for local races. It certainly isn’t true for the presidential election: given the extensive news coverage of the 2016 campaign, Trump and Clinton would have had near-universal name recognition even with much less money. In general, the more high-profile a race, the less of a concern this is. That’s why I’m proposing this platform for presidential races and perhaps gubernatorial, Senate, and House races, but not local races.

  • Campaign funding helps campaigns spread their messages. Ideally, if one candidate is better than another then that candidate’s message will be more persuasive. So we should expect that the more effectively both candidates are able to share their messages, the more likely it is that the better candidate will win. This means that depriving campaigns of funding would on average cause worse candidates to be elected.

In an ideal world this would be true, but in practice it’s probably not. Perhaps giving both candidates more money (and thus more publicity) will give an advantage to the candidate with the more inspiring message, or the one with more rhetorical prowess. But rhetorical prowess is a symmetric weapon: it’s equally likely to be a trait of the worse candidate as it is to be a trait of the better candidate. So I think the effect here is negligible or nonexistent.

  • Even if the platform won’t have a systematic impact on election outcomes, messing with elections is in general bad for democracy.

This is a weak argument because lots of things “mess with” election outcomes in various ways: campaign finance laws, referenda, vote swapping, and so on. If the platform doesn’t have a systematic negative impact on elections, I don’t see it as a bad thing if the existence of the platform occasionally has some effect on elections.

Furthermore, there’s not much evidence that money affects high-profile general elections — and if it does, the effect is probably minimal. This means that the platform would be unlikely to have any significant impact on the outcomes of elections.

  • Donors who seek influence would still donate directly to campaigns. Depriving campaigns of other sources of funding would make these donors even more influential.

This is a reasonable concern and admittedly a plausible negative effect that the platform would have, if the platform came to represent a substantial share of overall contributions. But remember: if (say) 10 percent of contributions were instead donated to charity through the platform, and even if only 10 percent of those contributions were effective, that would save 45,000 lives. That’s a huge deal!

(But also, the right way to deal with the problem of donors wielding influence over politicians is amending campaign finance laws. Opposing innovations that have the side effect of exacerbating the problem is probably not productive in the long run.)

  • If a marginal dollar is more valuable to one candidate than the other, then this platform would hurt that candidate’s chances.

This is a reasonable concern, not so much because it might influence election outcomes (see here for why I don’t think that’s a big concern) as because this perception may keep people from donating to the platform. In particular, if your candidate is behind in the “money race,” an extra dollar is likely more valuable to them than to their opponent, so you’d prefer to give them a dollar over depriving their opponent of a dollar.

But as it turns out, historically the Democratic and Republican candidates for president have fund-raised very similar amounts of money in about half of election cycles. In such elections, the concern that your candidate will be disadvantaged by the platform is likely an unfounded one.

Nevertheless it would be good to have a way for donations to be matched at a ratio other than one-to-one. One way to do that would be through a market structure where donors say what matching ratios they’re okay with. I’ll discuss this possibility — and the problems that might arise — in an upcoming post.

Is this legal?

Yes. Eric Zolt of UCLA (mentioned earlier) asked the FEC for approval to run a platform like the one I’m suggesting. In 2015 the FEC ruled that such a platform would be in accordance with campaign finance laws.

So, do you have plans to implement this? How can I help?

Great question. I really want this platform to be implemented but don’t have any of the relevant technical skills (web design, marketing, etc.) to actually do it. If you’re interested in implementing this and think you have relevant skills, let me know! (See the “About” page of this blog for how to contact me.)

9 thoughts on “Getting money out of politics… and into charity

  1. One problem I’ve thought about with this is that it because the charitable donations exist as an extra incentive, people who have only weak political opinions but want to leverage charitable donations may use abuse the platform.
    The most simple problem is just that, if I have $100 to donate to charity, (and I don’t have a super strong preference over charities, and I have weak political preferences), and I know that Demi has received a surplus of donations waiting to be matched, instead of donating my money to charity, I can donate it to Rebecca through the platform, and essentially get to donate $200 to charity instead for free.
    As we discussed a while ago, one okay fix for this is, instead of donating the entire matched amount to charity, you can just donate half of each amount. (Then my $100 donation would still just donate $100 to charity, and I can’t abuse the platform to get leverage.)
    Unfortunately, the problem doesn’t go away completely, because now, let’s say I would normally apportion $100 to donate to charity and $50 to donate to politics from a paycheck or something. Now I can just put all the money into your platform and get $150 of political influence (75 to my candidate, -75 to the other) and $150 of charity donations. Since the amount that goes to charity stays the same as if I just donated all the money to charity, it’s like I can freely express my political opinion much more strongly/efficiently than I would normally be able to do so.
    Put another way, it (maybe substantially, depending on how much I care about charitable donations) lowers the threshold of caring-about-politics that I need to have in order to get $x of political influence.
    This wouldn’t necessarily be a big problem, if this happened on both sides (maybe it still would be, I haven’t thought about it). But if, say, Rebecca’s supporters used the platform much more than Demi’s, then it would just lower the amount that Demi’s supporters would have to care about making political donations, in order to donate.

    Maybe that’s confusing, happy to talk more about it elsewhere.

    In any case, I think this problem can be solved (or maybe it isn’t a problem at all, given more thought), but it would take some kind of complicated bidding system that would be much more annoying to implement than the current proposal.

    Liked by 1 person

    1. Thanks for the comment! You’re anticipating (and actually going beyond) what I plan to talk about in a post a few days from now. That was well-thought-out and I don’t have much to add (and I’ll link to this comment in the relevant post).

      The one thing I’ll add is that, fortunately, the effect you’re pointing out goes in the good/stabilizing direction. That is, if Rebecca’s supporters are using the platform more than Demi’s, then they’re at a disadvantage (i.e. Demi’s supporters are getting more out of the platform compared to how much they care), which will cause the number of Demi-supporters using the platform to increase and the number of Rebecca-supporters to decrease. Which I’m pretty okay with: the platform works best when the two sides are about equally matched.

      But maybe there’s a potential for a bad equilibrium here: Rebecca supporters care more (so are at a disadvantage) but there are more of them (which gives them a numbers advantage); these factors cancel out and so Rebecca supporters and Demi supporters contribute equally to the platform, even though Rebecca “should” get more money.

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  2. I might be missing something here, but it seems to me that the issue Dylan pointed out does not lead to an equilibrium.

    Suppose Rebecca currently has more on-platform donations, I support Rebecca, and I have $100 to donate. I anticipate that philanthropists will start donating to Demi to double the effectiveness of their donations, as described by Dylan. If I donate my $100 to Rebecca, then my donation will be matched and Rebecca will get no money. However, I will *not* have decreased the amount of money that Demi would have gotten – if I had never donated my money to Rebecca in the first place, then philanthropists would never have matched my donation, so Demi wouldn’t have gotten the $100 anyway. Therefore, I would rather have just donated my money to Rebecca directly instead of using the platform.

    Explicitly, I’m assuming above that my preferences are:
    $200 to charity < $100 to Rebecca < $200 to charity and -$100 to Demi.
    For the platform to function best, you'd want someone with these preferences to choose to use the platform. But in the case of bothersome philanthropists hacking the system, it seems that someone with these preferences would choose to donate directly.

    Nevertheless, I think this is an excellent idea. At least, if you prefer to donate $200 to charity instead of $100 to your preferred candidate, then the above concern doesn't apply, and you would certainly want to use the platform.

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    1. What about the scenario where (number of Demi supporters) + (number of philanthropists) << (number of Rebecca supporters)? (Assume everyone donates the same amount.) Then by not donating, you're not decreasing the number of philanthropists donating to Demi.

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