Big Picture Questions
The short answer is the way the government funds everything else – taxes. Token Ibis doesn’t have any official tax policy recommendations, but it would probably make sense to implement a more progressive tax to fund UBP.
One easy source is to get rid of the existing charitable tax deduction – which costs the U.S. Treasury about $75 billion per year and disproportionately subsidizes the wealthy. That alone would fund about a $30/month UBP program. Anything more than that would require good public communication. In theory, people who already donate to charity should be perfectly okay with increasing their taxes if they know that they’ll get the money right back – especially because it guarantees that the freeloaders around them are also giving back their fair share.
No. Well, maybe. The Token Ibis team has fairly diverse viewpoints. As an idea, UBP obviously has some less-than-subtle hints of wealth redistribution. On the other hand, the mechanism for applying that money is unapologetically free-market based. As a result, we like to say that we’re combining the best of left and right wing economics. In practice, it might take a little tact to make sure that we don’t end up triggering both sides of the aisle.
Yes. We get this question a lot from people invariably donate to charity AND volunteer a lot. Our response is to ask: which feels better, donating, or volunteering?
Donating money is the fast food of social impact. It feels good for two seconds, and then it’s over. Sure UBP might take a way a little bit of that feeling, but it will give back so much more by enabling millions to volunteer and actively engage when they wouldn’t have before. We want to UBP take care of money so that people can take care of people.
It could, but the effects are manageable. We think it will be a smaller challenge than say, getting people to write honest tax returns, or preventing insider trading. These are certainly problems that the government has to deal with, but last time we checked, these institutions haven’t burned down quite yet.
On the other hand, UBP is probably much more manageable from a corruption standpoint than the current tax deduction system. To catch UBP fraud, you have to prove what somebody DID, for instance, laundering their ibis stipend through a fraudulent nonprofit. If the IRS busts the nonprofit, then they bust everyone that “donated” to it. On the other hand, to catch tax fraud, you have to prove what someone DIDN’T do, which is be 100% accurate on their tax return.
There’s also the matter of scale. Given the effort it takes to start a nonprofit, it’s probably not worth it for you to create a fraudulent organization just to launder your measly $150 a month. But maybe it would be worth it if you and your buddies pooled together your funds. How many buddies it would it take? How about 133,000? If you could get a 133,000 friends together to conspire without the IRS knowing, you would have enough friends to launder about the same amount of money that Jeff Bezos could have laundered with his $2 billion dollar donation back in 2018.
Sort of. UBP and UBI have obvious parallels and our choice of terminology was no accident. UBI tackles overall wealth inequality while UBP deals exclusively with philanthropy. UBI is simpler and more controversial while UBP is more complex but arguably more in line public sentiment. Both have similar philosophies of invoking government power to create market-based solutions.
While we expect that similar crowds might be friendly to both ideas, there is no reason why they need to be connected from a policy standpoint.
This is probably the biggest challenge that the government will face in a UBP world. Gate-keeping for UBP is everything. The good news is that the government already has to make these kinds of the decisions by determining 501(c)3 status.
The bad news, at least in this context, is that UBP will probably make nonprofit startups a lot more popular. This means that the IRS will have to increase the barrier of entry somehow to maintain reasonable costs and reduce wasted money on ineffective or deliberately fraudulent startups.
One potentially interesting answer for that is to expand the idea of fiscal sponsorship. Today, an existing nonprofit can “fiscally sponsor” a fledgling startup to provide guidance and sidestep some paperwork. We could imagine taking this idea further and making fiscal sponsorship mandatory. In this world, any startup would need to gain “sponsorship” from, say, three or more existing nonprofits to be eligible to receive ibis. This would effectively increase the barrier of entry in a way that fosters collaboration and reduces redundancy in the nonprofit sector – two areas that many people think needs to be addressed.
This is a situation where ibis is so successful that it becomes more useful to normal money. In other words, you give $20 of ibis to your friend to “donate to charity”. But he then gives it to the butcher to buy a lamb shank. The butcher uses it to pay his employee, which then gives it right back to.
First of all, if this is the last problem we have to deal with, then we’ve done something right. The problem, in this case, is that ibis only has that “greed-free” property if it makes its way to charity within a reasonable number of “hops”. If it just keeps circulating around indefinitely like normal money, then what’s the point?
To combat this, we would have to look at a whole new and exciting field of economic tax theory, but it can be done. One option might be to impose a sales tax every time ibis changes hands. Another option might be to make it “sticky”. For instance, if you give $10 to a friend, the law (and computer code), might dictate that $2 of that HAS to stay in your account in a special pool that goes directly to a charity of your choosing.
The short answer is that this a pure numbers problem, and those are far easier to solve than getting people to use it in the first place.
Probably not. This was a commonly held truism that was true for decades. Things seem to have changed around 2000. In 2006, which was the last year for which the U.S. Congressional Budget Office released a comprehensive study on charitable giving, tax payers making about $500,000/yr gave about 3% of their income, as compared to 2% for everyone else. However, these households also received a much higher tax incentive to give, so it was somewhat true that lower-income households gave a largest percentage of their effective income.
Since then, inequality in philanthropy has gotten considerably worse, and so even that last statement probably isn’t true anymore.
Finally, we don’t necessarily want lower-income people to give more. If they did, then it would fix some of Token Ibis’s complaints about unequal philanthropy. On the other hand, it would exacerbate the much bigger problem of overall inequality.
No. We applaud the billionaires of the world for giving back. In fact, we would love if one of them someday take an interest in our project.
Our fight is against the institution. It’s a lot like tipping. It’s possible to tip will and respect other people who tip will while thinking that it’s a dumb way to pay service workers.
Small Picture Questions
Token Ibis (Inc.) is the full name of our organization. We might informally refer to ourselves as Ibis (capital). Meanwhile, ibis (lowercase) refers to the unit of currency on our platform. Finally, UBP stands for Universal Basic Philanthropy, which is an organization-agnostic public policy idea that we hope will outlive our organization.
The experiment(s) will be funded with private money. We’re hoping to build wide and deep at the same time. In other words, we’re looking for a lot of small donations from everyday people as proof of what we know — that this is a message a lot people can get behind. If we can get that, then it starts to attract much larger sources of money from foundations, corporations, and wealthy philanthropists. There are three reasons why someone would give to ibis:
1. Going through students could very well be the most effect way to decide where your charitable dollars go
2. They believe in the short-term goal of empowering students
3. They want to be part of the very first group of people to push the much larger UBP message and vision.
We think that any of these three reasons are compelling on their own, but put together, ibis is one of the best ways to spend your charitable dollars. And keep in mind, we don’t collect any fees, so 100% of your money will, in fact, be going toward a good cause.
No, and we probably never will. Much of politics today is a zero-sum game; we like to think that UBP is new and enough that it doesn’t have to be that way. As a result, we are a research organization only. Our only objective is to show what does and doesn’t work. If we can do that, we believe that people on both sides of the aisle can get on board with this movement.
It’s absolutely true that what we’re trying to do on the local stage is similar to what United Way and a lot of other community foundations already do. “Participatory philanthropy” is a growing buzz word as organizations try to broaden community engagement. These programs take the form of community grant-making panels open to the general public or socially-oriented giving groups that makes it fun for young people to give back. In the short-term, Token Ibis shares these goals and is simply taking the execution to its logical extreme by putting the money in the hands of the end user.
However, it’s important to be mindful of the differences in our long-term vision. As much as United Way is focused on community engagement, their model still depends on the traditional support of private philanthropy. Token Ibis is only dependent on private philanthropy as a means to our end goal — a world in which philanthropy is a right for everyone. In our view, promoting community engagement through social encouragement is useful, but it’s not enough. To bring about the lasting changes that we want to see, we need to start with sound economics and go from there.
While we’re here to push a radical new perspective, that doesn’t mean that it is incompatible with much of what existing grant-making organizations already do. The lifetime of a grant-making process typically looks something like this:
1. Create a list of eligible grantees and evaluate each one.
2. Decide how much money to give to each grantee.
3. Give the money and collect results.
The core innovation of Token Ibis really only affects Step 2 of this process. As a result, the ideal scenario for us may well be to eventually work with something like the United Way to do the heavy lifting on Step 1 and Step 3. If you have the connections to make this happen, then we would love to follow up with you!
In the long-term, the expertise and skills required to run a foundation won’t be going away either. In world where UBP is available to everyone, the most important part of the nonprofit ecosystem will be the evaluation and research organizations tasks with maintaining the legitimacy of the nonprofit registry and advising the public on the principles of effective social impact.
Things might seem useless now, but it can be easy to forget how quickly things change. On the right, who would have thought a guy named Donald Trump would come out on top? On the left, campaigning for universal health care might have landed you in communist prison 20 years ago. Now it’s a prerequisite to be a liberal. Universal Basic Income is now the new kid on the block, but who knows where it will be in 4 years?
At Token Ibis, we’re not pushing for change in 2020, we’re pushing for change in 2040, or maybe beyond. The fact that this concept is so new is exactly why need to get a jump now. If all we do is make UBP a possibility slightly sooner than it would have been otherwise, then the benefits would be enormous.
Also, federal funding is the end goal, but it’s not all or nothing. Like UBI in Alaska and Democracy Vouchers in Washington, UBP could graduate to a state-level (or small-country-level) experiment sooner than you might think.