Project Verification Process Development

The Giveth Community
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As the first round of GIVbacks comes to an end, the team has realized that we need to take some new measures into consideration moving forward. I would love to hear the community’s thoughts, ideas and feedback around some of these things.

  1. We have seen quite a few applications come in for projects that have no history (start-ups). We think that these projects should be allowed to collect funds via Giveth but that maybe they cannot actually be verified until they have started and have some history as a project/organization. Once the project has had some time collecting funds and reaching provable milestones, we can consider them for verification. One way that new projects can do this is by adding regular updates as to the progress they have achieved since they started. I think we can also add some clarifying questions to the application such as… When was your organization founded? What milestones has your project achieved since conception? etc… maybe providing some way for them to upload pictures or evidence of these milestones if they are not publicly available on a website or social media account. I think it’s awesome to fund great ideas but can we really verify an idea??

  2. Mandatory project updates, (whether they be monthly, quarterly, etc.) in order to maintain “verified status”. We think that this would ensure that our verified projects are using the funds for what they claim to be as well as provide donors with a connection to the project’s progress.
    Question for devs: Is there an efficient way to track this in adminbro? Like if a verified project has not submitted an update in x amount of time, it becomes unverified and needs to be reviewed by an admin again? Idk… these are just ideas right now… not sure of the best way to implement this on the technical side.

  3. Thus far, we have been pretty flexible with the answer to “How will you use the funds?”. We think that going forward we should require a bit more clarity from the project owner of how the funds will be used. For example, instead of accepting and answer like “All funds will be directed exclusively for project implementation and achieving goals set out.”, we require more of a breakdown/budget of where funds will go.

As a verification team, we feel that these are important things to receive feedback on before just making the decision to add new requirements. Please provide any insight that you might have in these areas. Thank you!

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I’ll share some experiences from auditing NGOs.
Some NGOs do not actually do anything, but they pay someone to craft a beautiful and professional project with KPIs, budget management, a Gantt chart, and so on and then they host an event where they invite people. They take pictures. Then, they give a shirt to everyone and move them around through a dynamic. They take pictures. Then they repeat it with another shirt. Bam! They have evidence of three events by hosting only one. It is hard to find because you need to examine the pictures and not just see that “oh yes, there’s some evidence here”.

To spot these type of degens, it is required to perform local auditing. How? Going to the places they said they were working on/impacting.

In conclusion, I agree with you. Adding regular updates is a good measure. Adding monitoring of KPIs with evidence to maintain the status is even better. Adding a way to enable anyone to validate their impact is bullet-proof. The latter one can be done through a decentralized dispute resolution mechanism.

Regarding verifying an idea. I would do it by having the person putting some professionality on asking funds. Like the things said above. A detailed plan on how money is going to be used and setting up all the transparency process to enable anyone to verify their progress would be enough to verify an idea. Nothing more could be done if they do not hold a history or are backed by others. BUT, those that can be backed by others, then that would be their verification. Being vouched by people and not just by having hearts in the project but actual people saying “I trust this project/team”.

Hope is helpful. I love Giveth and would like to see it adopted worldwide.

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I like all of your suggestions.

  1. I don’t think we should fund only ideas. I think it is reasonable to expect the project to have provided some public good already and I like your suggested questions.

  2. For the mandatory updates… I think we should make sure that it’s not too rigid/strict. Like we set the expectation that they should provide an update every 2 months. After 2 months they get an email reminder… telling them they need to update or will lose their status… After 3 months they get a warning that they have 1 month left… after 4 months they lose their status. Something like that where they get pushed a few times and have generous time, so we don’t make more work for ourselves with people getting upset and missing communication.

  3. I think it’s reasonable to expect a clear roadmap or action plan. I think we should be asking this of people who make proposals for the GIVgarden too (side note).

Jumping off of @HBesso31 suggestions… I think this is something we should consider to implement in the future, perhaps along with project curation. Some kind of system for people to verify their connection/relation to the project IRL and then give it a seal of approval (or disapproval). I personally know people backing several of the projects on Giveth and can see their impact! Would be good if trusted people could give trusted opinions, and we could decentralize a little bit that way.

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On the second point I agree fully with Lauren, from the technical side that’s totally doable and we can show it on the admin dashboard.

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I have implemented the new questions/requirements into the application as well as updated the docs around the process. It seems to be going well and making the job of verifying a bit easier and more streamlined.

You can view the updated application here.

I will raise the issue in the Governance Call tomorrow to decide the frequency of mandatory updates. My suggestion is that we recommend monthly updates, after 1 month with no updates we send a reminder email, after 1.75 months with no update we send them a reminder email, after 2.5 months with no updates we send them a ‘warning’ email, after 3 months with no updates we remove the verified badge.

After we reach a collective decision, I will begin to work with Carlos to add features to the AdminBro accordingly… github issues to come.

Also, to be discussed in the Governance Call tomorrow around project verification is the number of verified projects that one organization can have… Should we have a limit? With the new Giveth Matching Pool, if we allow one organization to have an unlimited number of projects, they could receive an unfair matching advantage over an organization that only has 1 or 2 of their projects listed on the platform.

   - Comments from Melody -

"Distinguish between project and organization when it comes to verification? (orgs then can list multiple projects ) - as discussed a little on Discord. My general suggestion, if the project apply under same nonprofit registration, they can be verified automatically but to a limit of 3 projects maximum. This way we will limit the ability to abuse the system (especially when there’s matching fund to be distributed amongst the projects evenly if the community decided so or in other ways). "

“I am unsure why the organization already have a verified account would need a second account to raise fund if this project is within what they are suppose to be doing. I see a possibility for abuse (not intentionally but rather administratively) to increase exposure of the organization and a potential deceit (as the nonprofit status is really not separate) to donors (they may think it’s separate and hence give twice). Let’s chat about project within an organization more as when Giveth grows, you may attract a lot of bigger organizations that has large amount of projects in parallel and a clear policy on that (perhaps link them instead of re-verify or just decide the verification only on the organization) maybe good for not overwhelm the platform/team.”

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From a nonprofit’s perspective, I found reporting time proposed (monthly or quarterly) is a little too short and may pose a problem for the team to keep up with. Most foundations would ask for a half year or an annual report from more established nonprofits as they realized (along the way) that some projects take time to coordinate and show impact (for example, conservation related work would take years - hence 3-year interval on reporting while a homeless shelter would take way less time to show impact - people helped within a given time period).

I wonder if the focus should be placed more on

  • whether the organization is credible and showed past success (past impact report)
  • whether the organization’s mission/vision is affecting social change or contributing to public good (there should be a question asking their interpretation of the social impact they are achieving)
  • whether the organization has plans to be sustainable (what’s their plan to raise and keep up the activities and is there long term impact)

If we establish that they fit all the criteria, they should be asked for a 6-month and a 12 month impact report for the first 2 years and their verification status should be up for an annual review.

The exception is, because these are already asked from those organizations who are already legally established as charitable entities in their corresponding and the filings are already transparent and audited on an annual basis and can be found publicly (as most US, Canada, European Countries), then their status will not be up for review anymore. If the legal status is unclear or the country’s charity law is not transparent, than they defer back to annual review.

Financial budget is often asked (by a donor/funder) when a grant is given to a specific project this would work for a distinct project but for an organization in general (i.e. WWF or medium to large NGOs, this is difficult to as there are so many projects and budgets). I think we need clarify Giveth’s role and its accountability for the donor. There is also the movement in the nonprofit world and in donor’s activities in giving to undesignated funding to credible organizations which is immensely more helpful than the project-specific way of funding (that limits the org’s ability to build capacity and be sustainable in a long term and resulted in a scarcity mindset). There is much to talk about and again, as a giving platform (not as a direct funder) where Giveth’s accountability to the donor ends is the question.

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I feel that quarterly updates makes sense. It’s regular enough to show frequent updates, but not such an overwhelming requirement for teams as monthly updates would for small teams or teams with low bandwidth.

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This is an interesting discussion and I can add some points.

Not-for-profit projects often grow out of grassroots community organisation rallying around an idea, a driving force and pooled resources before they have a need for any amount of external funding. So, it is not unreasonable to ask a project to provide evidence of some milestones reached, demonstrating them to be more than an idea.

Donors may be willing to fund little more than an idea and take risks on a project that addresses an issue close to their heart. So, allowing a project to raise funds as an ‘unverified’ start-up is a way to facilitate this kind of giving.

However, it’s possible that some unverified projects may not use the funds as proposed and that’s the risk for the donor. But what if the funds were to be used for real harm - the accountability question then extends beyond donor and project. Morally and reputationally, this is something for Giveth to consider and draws on the question (@qqsong) of where the boundaries lie for Giveth’s accountability to donors: is it really enough for Giveth to leave project’s unverified as a disclaimer?

Decentralising the verification for projects to trusted people is a good suggestion and comes with a question: what constitutes a ‘trusted person’? Would Giveth be kicking the can of verification from ‘project’ to ‘people’ validation as the community expands. Is this an issue that is addressed through the GivGarden?

Where charities are registered they are being annually audited in their respective countries. I think it’s reasonable for their status to remain verified (at Giveth) with ‘light-touch’ review; unless Giveth requires more rigorous transparency than what is already publicly available. If a registered organisation becomes ‘deregistered’ or ‘under investigation’ within their legal jurisdiction, then naturally their status at Giveth should be reviewed.

Smaller projects / organisations are less complex and could be considered for providing a quarterly update, especially where the project has limited history.

From a management perspective within a not-for-profit, project-specific funding can be tricky with a lot of time spent on ‘ring-fencing’ funds and can make resource allocation inefficient. I like the idea of funding a verified organisation rather than projects. This addresses two issues: the need for ‘capping’ projects within an organisation and the possibility for larger organisations to obtain benefit from listing multiple projects.

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We touched on a few of these things in the governance call today…

The consensus that we found within the call was that quarterly updates seem like a reasonable requirement for a project to maintain their verified status. We can implement the update requirement and then watch the data coming in. If we feel the need to require some sort of evidence moving forward after that, we can always implement it in the future… but lets take it one step at a time to accurately gauge user activity and implement theory of change principles. We are not asking for evidence of impact or financial budget necessarily, we are asking for evidence of actions taken to create intended impact.

I have done a lot of research around impact measurement and impact reports and have found that this information may not be as helpful at determining the value that a project is bringing to the world as we may hope it would. Interesting article.
I think that the donor having the ability to be connected with the story and the value-aligned mission of the project first and then being able to see the actions that the project is taking along the way is what really drives the majority of donations (along with GIVbacks of course lol).

In my opinion, all verified projects (excluding Giving Block projects) should be making regular updates regardless of governmental non-profit status. I realize that as of right now we have a centralized verification process but we are looking to slowly decentralize this process as we move forward with GIVpower and the curation of projects that are eligible for the GIVbacks program. The future curators of the Giveth platform should have easy access to regular updates from the projects without scouring government websites, possibly in a foreign language. I honestly think that it is reasonable to ask any project to give regular updates considering that these organizations are posting on social media at a much more frequent rate – adding an update to a project is just as easy as posting to twitter.

I understand that registered non-profit organizations currently have to jump through many governmental hoops to have the label that they do. At Giveth we are rewriting this story… We are building an economy and a future that allows for any and all people doing good in the world and creating positive change to be supported from a place of abundance rather than sacrifice and where people who share their abundance are rewarded. We are working to create an avenue that could hypothetically take the place of government registries/tax subsidies and that would allow for borderless unity that doesn’t need to wait for a decision or action from the ‘powers that be’ to create real change in the world.

If there is a natural disaster somewhere, I would hope that someone could create a project on Giveth, get it verified and curated to the top of the list in a reasonable amount of time to make a meaningful impact within the disaster relief effort of that project. This would be impossible in the current government non-profit system.

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This question has been added to the application. :wink:

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GIV token holders will have the ability to ‘lock’ their GIV for a certain period of time resulting in GIVpower. Their GIVpower is then used to curate projects on the platform. You can read the work-in-progress spec doc here. This means that anyone who holds GIV can become a GIVcurator. Keep in mind that this will be a very slow transition and will have a centralized verification team element involved for a while before becoming fully decentralized. Essentially, this is an experiment and will evolve as we go.

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What do you mean by real harm? Any projects that violate the terms and conditions are cancelled right away.

I feel like this is another good reason to request frequent updates that show what the funds are being used for as well as provide a flagging functionality for community members to report projects.

It seems that the boundaries for legal liability are clearly expressed in the Terms of Use with the disclaimer. But you have a point when it comes to moral boundaries. What would it mean if a project appeared to be collecting funds for a legitimate cause, raised a lot of funds, and then used those funds for something evil?

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I think it’s not a question of “replace” but a question of adding. The charity laws were there for a reason (and a very good one). We have seen chaos in early days of charitable fundraising in China as early as in the 2010s and resulted in donors being victims of schemes. I think those groups who did jump over hoops to make sure their orgs are sustainable and can get funding from all sources (including government and foundations in this case) should be rewarded as they have really thought about the organization, debated about their charitable mission/public goods, and committed to financial transparency and annual audit. With Giveth, others who wants to spontanously raise fund to support a short term problem, I think it’s acceptable but not necessarily verifiable. I see this funding sources as a generous new stream but definitely not as a replacement and should not be communicated as such otherwise, many orgs will feel alienated from what good things that crypto philanthropy can bring.

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Totally 100% agreed. For anyone who had worked in an nonprofit, undesignated fund is the kind of funding we need to build cacpacity and possibly becoming more sustainable for bigger and more long term social and systemic change. Project-based funding is confusing and could be abused. I would suggest considering verifying orgs not project as well to make sure undesignated funding goes to the organization itself. Some reference material about this is Dan Pollato’s Tedtalk and book “Uncharitable” .

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This is not true especially with natural disasters. As the pandemic shows and other natural disaster, what we need is on the ground grass-root infrustructure. A person having an idea and helping is not going to be as impactful as a concerted efforts from all sides of the society and there are already infrustructure in place and local networks through nonprofit like the International Red Cross who have localized team in every single country to do a swift response in any situation. I hope people do not forget that there is a community network already built and can be used instead of somewhat reinventing the wheel which would turn out to be much more unproductive. A project that came out of the natural disaster will never ask government for approval (as there won’t be since it’s ad hoc) and there isn’t any need to because the fund raised will be given through already establisehd local community. Government or foundations’s fund will also be given to the same community infrustructure (hence no need for the project itself to get this money). This is a very unlikely situation where the platform will do more impact (however a very likely situation to be abused). I think not reinventing the wheels and rely on local community infrustructure/network and be community based (it may be govemental which turn out to be hugely helpful in Wuhan, and that is fine). We need to look at natural disaster or major event in the a world with in inclusive perspective.

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This is a really complex topic, but I feel Giveth has a chance to start with a blank slate and publicly display a different, more respectful ethos when it comes to donor-grantee relationships.

Most nonprofits have many, in fact often dozens, of donors. Each one of them tends to think: “I expect you to report to me. Just every quarter. Here is my form. That’s not asking for too much, is it?” The result is that nonprofits spend an enormous amount of time on reporting. Which is one of the big factors leading to the self-exploitation Giveth is trying to end. Would you buy 10 Apple shares and then expect Tim Cook to write you a personal reporting email every quarter? Of course not. Give nonprofits the same kind of freedom.

Now, of course, the risk of fraud and wasting funds is real. But I think it is difficult to think of verification as a binary choice (either verified or not). There are many factors that make up the credibility and impactfulness of an organization/project/activity. Here are some:

  • Is this a registered charity? (embezzlement of funds unlikely)
  • Do they have a theory of change? (they know what they want to do)
  • How do they measure impact? (anecdotal, surveys, randomized controlled trials)
  • Do they have an annual report? (this should be enough to show they are still active)
  • How long have they been around? (Is there a track record?)
  • Are there others in the community that trust them (wisdom of the crowd)
  • …

All of these factors could combine into a “trust rating” or “risk class” (0-100, A-D, whatever). That could be shown on the website so that donors can decide for themselves which risk level they are willing to take. Just as when investors have to decide between buying Microsoft shares and giving seed funding to a startup. I think it is Giveth’s job to support donors in making an informed choice without creating formal overkill for the projects.

Here are a few examples why this approach might make sense:

  • Many big nonprofits are registered charities and have great comms but have very little impact. Because they basically tell stories but have no rigorious impact measurement.
  • Some highly effective social initiatives (e.g. Extinction Rebellion, Fridays for Future) are not registered charities in some countries because it is legally impossible. This makes it more difficult to verify them.

None of these two example cases would receive a full “trust score”. And that is exactly as it should be. Because in both cases there is a risk that money is being wasted.

BTW: Projects could still, beyond linking to the annual report that they create anyway, decide to give more regular updates on Giveth. And that should be rewarded with more “trust points”. But that should be the choice of the project. If Giveth is a really important funding stream for them, they will do it. If not, they won’t. But at least we don’t reproduce the old power imbalance between donor and grantee.

These ideas would of course need a lot of refinement. There would have to be threshold for GIVBacks, obviously. Maybe there could be two “ratings”: one for something like integrity/is this a real charity or person? And another one for impact/does this work for the common good? Maybe only the first one would be relevant for GIVBacks, and we automate most of this with the help of existing databases plus Proof of Humanity.

These are just a few initial thoughts. The other questions discussed here are just as important (mimizing restricted funding, relationship of organizations and projects, etc.).

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I see a lot of great thoughts and discussions here. This is an extremely complex issue and even seasoned donors still are struggling with (when it comes to issues of project vs general funding, impact measurement etc.). I also feel that this topic is in fact beyond a forum discussion and really deserve more attention and expertise perhaps in the format of a work group. In general, I really think there is a distinction of Giveth as a giver (a donor) and Giveth as a funding platform where the standards and ratings are there to guide and steward the donors and providing reliable resources for that decision-making process.

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Completely agree! Although a social media post is not a lot as a reporting measure, for a medium-sized organizations who has perhaps over a dozen major donors and over several thousand regular donors, this could be practically undoable and potentially create huge admin tasks. On the other hand, for smaller group and project, quarterly social media post is doable, this is all depend on if Giveth is a main source of funding for this donor or not.

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I think this is a really important point and speaks to self-regulation. Those that make the effort and contribute are more likely to ‘rise to the top’.

On the flip side, Giveth wants the platform to become an important source of funding for projects so a thorough understanding is needed of the balance between what donors want to see and the resources that projects have for updates and documenting. If projects don’t update to the platform requirements they are not verified (or no longer verified), they are unlikely to maximise donations and Giveth is unlikely to become a significant funding stream: impacting growth and impact of the platform. Trust points is a good idea to incentivise for more regular updates and encourage contribution platform growth.

What info does Giveth have on what donors want to see and what projects are willing to contribute in terms of updates etc?

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After a few days of reflection and talking with other community members, I believe that there are several things we are talking about and they do not necessarily need to overlap and cross-regulate:

  1. Verificaiton - basic process to verify that the project is “legit” in the eyes of the community

  2. Platform engagement - if a project is not engaged enough, that doesn’t mean that they are not “legit”. Therefore, regular updates on the platform should not affect project verification status but rather perhaps in terms of reward, projects will be less rewarded in some way and more rewarded if they are more active.

  3. Donor report - this is when it needs to be clear that Giveth is not the donor but rather a platform for donors to donate and the decision and accountability is on the donor who to donate and it’s also theirs (not Giveth’s) responsibility to acquire reports (in whatever interval they want) from the project owners. In general, this is a great relationship building between donors and projects directly which should be welcomed by both and if the reports cannot satisfy donors, they will not donate. In general, the donor report part should be out side of scope for Giveth and it will self-regulate when donors are provided guidance and opportunity to ask from project owners directly. Project owners can also choose to provide regular donor updates directly to their donors.

If we look at these three areas separately. We soon find out that the proposed idea to use constant updates as a donor report/platform engagement tool to maintain project verification status may not be the best solution (high maintenance and may provide low efficiency and more bureaucracy on the part of both Giveth and the projects).

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