Transparency in donation matching:
How does Giving Multiplier work?

How does Giving Multiplier create value?

1. Introducing new people to effective giving
   The goal of Giving Multiplier is to introduce people to effective giving. We provide information about some of the world’s most effective charities and make it easy for donors to support them.

2. Offering a convenient way to make split donations
   Many people want to support super-effective charities that are backed by research but also want to support personal favorite charities. Giving Multiplier offers a convenient way to split donations between personal favorite charities and our recommended super-effective charities.

3. Enabling donors to multiply their impact through our matching system
   When you make a split-donation through Giving Multiplier, you can expect to have an increased impact thanks to our donation matching system. However, the value that Giving Multiplier adds may be different from what you would at first think. This is because the matching funds added to your donation are pre-committed. Below we explain in detail how our matching system works and how it adds value to your donation.

Who should (not) use Giving Multiplier?

Giving Multiplier is for people who want to give more effectively and for people who want to introduce others to effective giving.

You should not use Giving Multiplier if either of the following applies to you:

1. You only care about supporting your personal favorite charity.
   If you only care about supporting your personal favorite charity, Giving Multiplier is not for you. By design, the matching funds that Giving Multiplier directs to your personal favorite charity will always be smaller than the funds that you direct to the to the super-effective charity that you’ve selected. Giving Multiplier is not a “money pump” for all charities. So, please only donate through Giving Multiplier if you like the idea of directing some (or all) of your donation to a super-effective charity that we’ve recommended.

2. You were already planning to donate the entire amount to a super-effective charity.
   If Giving Multiplier has inspired you to give more to super-effective charities than you would have otherwise, then you are fulfilling the purpose of Giving Multiplier when you make a matched donation through our system. However, you should not use Giving Multiplier if you were already planning to use the entire amount of your donation to support super-effective charities. Matching funds should be reserved for donors who were inspired by Giving Multiplier to give more effectively.

Who should donate into our matching system?

Donations to our matching system are welcome from anyone, including people who are familiar with effective giving and new to it. Matching funders are essential for keeping Giving Multiplier running. If you contribute to our matching fund, you can expect to have an increased impact by encouraging others to donate to super-effective charities (explained here in more detail).

How exactly does the matching system multiply my impact?

Giving Multiplier’s matching system increases the impact of your donation, but more indirectly than you might at first think. It also depends on what others will do because of your donation and what others would have done without your donation. These complexities are part of donation matching in general and are not specific to Giving Multiplier. In fact, your added impact is likely clearer with Giving Multiplier than with typical matching campaigns.

Conventional matching systems have been criticized for being misleading. The argument goes like this: If the matching funder has already committed the matching funds to the charity, then how are the additional donors doing more for the charity by responding to the matching campaign, as opposed to just making a regular donation? This is a reasonable criticism, to which there are some reasonable responses. However, Giving Multiplier’s system is different from typical matching campaigns in some important ways, and it allows you to have an additional “counterfactual” impact—an impact that would not have been realized without your donation.

1. You can direct the matching funds to the charities you care most about.
   This is the most direct and clear benefit of making a regular donation through Giving Multiplier, although it may not be the most important benefit (see below).
   
   When you make a regular Giving Multiplier donation, we add a percentage to your donations from the matching fund and direct these additional funds to the charities you selected. For example, if you split your donation 50/50 between your personal favorite charity and one we’ve recommended, we might add 45% to both of these donations.
   
   Keep in mind:

   • If the matching funds remain unused after 12 months, we will donate them to one or more of our recommended super-effective charities. This means split-donations via Giving Multiplier aren’t directly causing pre-paid matching funds to go to super-effective charities. However, your choice makes a difference by determining where the matching funds go, directing them to the specific charities you care most about.

   • You can’t use Giving Multiplier to simply maximize the amount the goes to your personal favorite charity. Consider this example: you donate $100 — $50 to your favorite charity and $50 to a super-effective charity. Giving Multiplier then adds, say, 45% ($45) to both donations. This means that $72.50 ($50 + $22.50) goes to your personal favorite charity and $72.50 ($50 + $22.50) goes to the super-effective charity of your choice. If you just donated the $72.50 directly to your favorite charity, you would only have $27.50 ($100 - $72.50) left to support the specific super-effective charity of your choice. Using Giving Multiplier, you can direct $72.50 to the super-effective charity of your choice. Without your donation, that $45 would stay in the matching pool, but it probably wouldn’t go to the super-effective charity you care about most.
     
     This ability to direct matching funds to the charities that you’ve chosen is the most clear and direct benefit of making your donation through Giving Multiplier.

2. You can be part of a virtuous circle of highly effective giving.
   The other way in which Giving Multiplier donors can increase their impact is more indirect and uncertain, but it may ultimately be more important.
   
   Giving Multiplier is a ‘donation institution’ that increases total giving and makes giving more effective. This is because most donations that flow through Giving Multiplier are counterfactual: if Giving Multiplier didn’t exist, most of these donations wouldn’t go to effective charities (based on what our donors tell us).
   
   Giving Multiplier enables a virtuous circle of giving, which can be described as a cycle of supply and demand for matching funds: Some donors are encouraged to give more effectively by our supply of matching funds. Other donors respond to that “demand” by providing matching funds. Both types of donors are essential to Giving Multiplier’s functioning and continued existence. By making donations through Giving Multiplier, our donors collectively contribute to Giving Multiplier’s functioning and continued future impact.
   
   In conventional matching campaigns, the matching funds are usually provided by a single large matching funder with a limited amount of funding. Giving Multiplier democratizes the provision of matching funds. A large pool of regular donors support the matching system. This means that if enough donors are willing to provide matching funds, and enough donors are willing to use them, the system can run continuously and indefinitely.
   
   Making a difference by participating in a supply-and-demand cycle may sound unfamiliar in the context of charitable giving, but it’s something that many of us do with great clarity as conscientious consumers. You might choose or refuse to buy certain products because of concerns about the environment, labor practices, animal welfare, or something else. These choices make a difference, but the cause-and-effect chains connecting individual choices to social impact are complicated.
   
   Whether Giving Multiplier’s matching system adds impact through this supply-and-demand cycle depends on assumptions about how donations made today will affect donations made in the future. If you have doubts about these assumptions, you can still be confident that your donation will have the additional directed impact described in point 1 above.

We created the explanations on this webpage because we want people to understand exactly how our matching system works. The added impact that you get from Giving Multiplier may be different from what you would at first think. Donors who are disappointed to learn that this is the case can decline to give through Giving Multiplier, or do so with more limited expectations. But we suspect that most users, endowed with full information, will agree that Giving Multiplier allows them, and others, to have an increased positive impact.