Shouldn’t projects receive GIVBacks for donations, too?

GIVeconomy
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Hi Givethers, maybe this has been discussed a thousand times already, but I did not find anything in the forum.

The more I talk to people internally and externally, the more I wonder: Wouldn’t it be a really good idea if projects received GIVBacks on top of each donation? What I mean by that is: Imagine if for every donation the donor got rewarded with GIV – and the project, too.

I see lots of upsides here:

  1. It would be a breath of fresh air in the philanthropy/nonprofit space:
    One of the biggest problems in the nonprofit space is that grantmakers and donors have way too much power: Donors determine what gets done (although they usually have no social impact expertise), and nonprofits have to go along with it (although they are the ones who create all the social impact). Right now, Giveth perpetuates this inequality by giving GIVs only to donors, and thereby letting them determine how the platform works. It would be an incredible sign of empowerment for social impact projects if they were given the same kind of reward (and thereby governance power) on the platform. It would also set Giveth apart from all other donation platforms out there.

  2. Giving GIV to both sides would be much more in the spirit of web3:
    Those who contribute and create value on the platform should become co-owners of the platform and participate in the value they create. Yes, that is the donors, but it is also the projects who create profiles and thereby co-create an attractive catalogue of impact funding opportunities. It would be fantastic if we could say to projects: “We value every stekholder. By getting verified and receiving your first donation, you will automatically become a co-owner of the platform.”

  3. It would be so much easier to sell Giveth to activist projects/orgs/networks/funders:
    I talked to a grassroots funder last week and she said “I think most of the projects we fund would not accept money from your platform because they would see in it the same extractive logic they want to fight.” I think this is an oversimplified view, but it is a fact that many, especially in the grassroots space, are critical of the plutocratic, top-down nature of conventional philanthropy, and they are skeptical not only of crypto itself but of structures that they feel perpetuate this. If we could say “We are the world’s only genuinely participatory donation platform. - Would you like to be part of it?”, that would ring very differently in their ears.

  4. It creates a small but tangible incentive for projects to come on board:
    For example, when I explained Giveth last week to a well-known activist network in the UK, their first question was: “What is the benefit for us? Is this something like Gift Aid in the UK?”. Gift Aid is a scheme where nonprofits receive from the state an extra amount on top of each individual donation (see link). Giveth could do the exact same thing, just in a web3 way, and it would certainly attract projects to try this.

  5. It feels great for donors!
    They know that when they donate to a project, someone else gives the project an additional boost. It feels a bit like a permanent match-fund. Most donors find it much more fulfilling to channel an additional $10 to a project than receiving the same $10 into their own pocket.

  6. It would automatically educate projects about DeFi and DAOs:
    In the long run, Giveth wants to make projects more familiar with DAOs and microeconomies and wants to help them build their own. But where are projects right now able to get a taste of it? Right now projects on the platform are just passive recipients of donations. For that they can also use the Giving Block. There is nothing they can experiment and play with. Imagine they received a message saying: “Congratulations to your first donation on Giveth. Because we love what you do for the world, we give you a few tokens on top! Claim them here. You are now co-owning Giveth! Use your tokens to vote for proposals or to boost projects that deserve more donations. Or sell the tokens to increase your donation. Or… Or…”

Three potential challenges come to mind that I think can be handled:

  1. “Would this still be ‘the platform for donors’?”
    I think so. Yes, projects would have a stronger say, but projects, too, have an overall incentive to build a platform that is as attractive as possible for donors. On a more emotional level, I would even say from experience: Many donors feel that something is not right about the traditional relationship between the powerful donor feeding the poor nonprofit. They WANT more of an qual partnership with grantees/nonprofits. A Giveth co-owned by all sides could offer that: a truly new spirit of cooperation.

  2. “Wouldn’t this cost Giveth more money?”
    Not necessarily. I think it would be ok to split the GIVBacks claimable by the donor with the project. The split would not have to be equal. Maybe 60% of the GIVBacks could go to the donor and 40% to the project or so. I think most donors do love the reward, but they are more fascinated by the idea than fixated on a certain amount. See also point 5 above.

  3. “Wouldn’t projects just use GIV to boost themselves, e.g in GIVpower. They have conflict of interest!”
    Yes they have. But already now, we do not know who Giveth’s token holders are. Anyone can buy GIV and use them to push a project. We should of course try to prevent the most obvious manipulation methods (like a wallet pushing a projects with the very same recipient wallet). In addition, my experience is that projects are often eager to support and promote other projects that do great work. If projects have more GIV, GIVpower curation might in the end contain much more expertise and wisdom than a purely donor-dominated GIVpower.

I am curious to hear what you think about this suggestion. I am sure there are lots of things I overlook and that would have to be worked out much more precisely. But I really think something like this could be an opportunity for Giveth to stand out amongst other platforms out there – to be genuinely regenerative not only about money flows but also inequality and harmful power structures in funding public goods.

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This seems like an okay idea, however I wouldn’t be in favour of reducing rewards to donors without their consent, nor increasing GIV emissions by giving extra GIVback rewards to projects.

Projects already enjoy great benefits because it costs nothing for them to make a project and they are getting 100% of the donations from donors. They are already the biggest winner out of this whole system. Donors generously gave away their funds and sure they get GIVbacks but are exposed to the pressure and volatility of the token itself.

It should also be mentioned that a commanding portion of donations are already made in GIV, effectively making many projects already shareholders.

In any practical implementation of this idea I would envision on the post-donation page to ask if the donor would like to donate a percentage of their GIVbacks to the project.

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I’m really not in favour of this idea. Projects are getting donations… they’re already getting something at the expense/sacrifice of donors. We give donors GIVbacks to take one step in the right direction… reducing sacrifice within the realm of public goods funding.

Re: projects getting more involved in web3… Projects already get a lot of GIV via donations, if they wanted to hold some and participate in the ecosystem, they can totally do that. However, the question from most projects it seems also is re: offramping… projects are more likely than donors to dump the GIV because they need the funds for their initiatives which is not good for the economy.

Projects will also in the future likely be getting GIV from donation matching funds… There’s no shortage of opportunities for projects already to get GIV.

Re: GIVpower, there’s nothing wrong with a project boosting themselves with GIV… the boosting means their later donors are rewarded more for donations. If they want to stake & lock they’re GIV, it’s good for them & it’s good for us.

I think Mitch’s idea here is interesting… and if its gets a lot of traction maybe worthwhile pursuing, but I also think this would be significant work to make possible and not sure it really adds SO much value. Donors can donate the GIV get from GIVbacks again after claiming if they want.

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Can’t swear that this is a very well informed suggestion, but what if as Mitch says, the donor chooses a percentage of his/hers GIVback to give to the project. But this GIVbacks are converted into GIVforwards where they are automatically staked on the project account increasing its GIVstream.

:thinking: :thinking: :thinking: :thinking: :thinking: :thinking: :thinking:

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oooh I like the phrase GIVforward!

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Thank you @gmail.com for this thoughtful and thought provoking post, and for our conversation about it today.

I’d like to take some time to respond as I have both my own position and feedback i have received these days as well to consider and state concisely.

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I really appreciate @rainer.hoell’s thinking and proposal, but I feel more aligned with @karmaticacid and her reasoning on this topic, i.e, I think strengthening the stability of the (future) economy must be considered first. Secondly, I think that the message of the mission of Giveth as being aimed to re-imagine how we (as a species) view and engage in GIVING needs to be maintained and deeply supported and promoted (and explained!). Lauren makes numerous points above. I’m only re-stating two. (I also like GIVforwrds if something comes from that!)

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I am 100% in agreement with your idea @rainer.hoell and has been thinking about how Giveth can be truly empowering the nonprofit space. To be honest and not to offend anyone, I feel that Giveth is a great idea based on a lot of assumptions (that the data is proving otherwise): assumption that the donor will come when they are rewarded with Giv tokens, assumptions that project will be funded and everything will be easy for them just to sign up. In reality, this doesn’t ring true.

There is so much complexities here but let’s focus only through a human-centred approach first and look at the users of this market place and the performance of the market place itself.

Are projects truly benefiting from Giveth? I am not sure. Many projects signed up and received nothing because they didn’t know how to fundraise through a crowdfunding model. If we look at the projects who had received some donations that worth for them to investigate in off ramping, there are only about 30 out of 1500 projects that raised over $3000 or less. Many of the 30 projects are related to Giveth in some way or the Giveth community. The data optic doesn’t look good for an outsider but but it did proof one thing: donors (in this case, many internal donors) only give when they believe in and are convinced of what the projects are offering. And this is not an easy process and takes a lot of storytelling and finding the right value proposition as well as developing a network of people who care. This is why the top projects on Giveth are within the Giveth universe and others don’t as they are not enabled enough to CARE for the platform or to lead their donors to give on the platform. If the motivation for the project is to raise fund on the platform and they think they sign up (easily as advertised but not so easily if you look into compliance of the whole process), then after a while, they realized that no one is giving, they are not getting new leads on donors, they are not learning new skills, they will let the project inactivate as they can go back to their own circle of friends and do the traditional way that they know best. How many projects and what % of projects currently fall into this category?

Are donors benefiting from the platform? Simply looking at the amount of giving vs. the potential of the crypto giving community (the Giving Block is hitting $100 million this year, from US alone with an average gift over $1200 - more than some projects), there is obviously something missing. The giving is not there, or donors are not there for Giveth. Donors give to the projects/nonprofits they care about, they can do it through many different ways and Giveth is just one of them. They give (especially the major givers - donors giving over 25K in the US/Canada about 10K in Europe) not only because they want incentives, the top reason is that they want the project they support to succeed. Big donors often give more when project gets matching fund from another donor, it makes giving and supporting a community act. This has been tested and successful in all cultures in the real NGO world.

With those arguments, there are several benefits of giving Giv backs to projects.

  1. It motivate the projects to get more interested in Giv economy as we learned that not everyone is interested to turn their nonprofit into DAOs especially when most projects operate on a shoestring while being egged by others as not efficient. Geting Giv backs motivate interests to be more active and engaged with the platform.

  2. It motivates donors to give more. Donors want project to succeed. It’s the essence of Altruism and we know this works. If the project they donate to get more funding, it will motivate them to give more. This is quite different from a general matching pool idea.

  3. Once projects are more involved, they are more willing to help promote the platform in their own fundraising campaign and bring donors to the platform (a reason for them to direct their major donors to give on the platform as the projects get matching funding instead of giving directly).

In general, I think @rainer.hoell had made a very thoughtful and well-researched recommendation. The expertise and experience in working with many nonprofits in the impact space really showed through the thoughtfulness and this suggestion really compacted a lot of past mistakes and complexity of the nonprofit world that Web3 technology can truly address. The platform is facilitating a process that would benefit a market place of donors and projects. In the nonprofit world, we often say, as fundraising professionals we are connecting the dots between the donor and the cause, and there is no third dot (the organization itself). This suggestion truly reflects that Giveth can take the route to be less platform-centric but making a systemic change that it claimed to be making in the first place as it needs not only to be on the side of Giveth, but it needs to be on the side of the projects and also on the side of the donors, understanding them truly and thoroughly, empathizing with their pains and needs, and empowering them to amplify the social impact they meant to make.

In general, working as professional fundraiser in the nonprofit space taught me that there are no donors where there are no great cause/projects that aligns with their individual values. A donor-first? strategy simply do not work in the crowdfunding model as the affiliation the donors have first and foremost is with the cause, not even the project itself (just a tool to deliver), certainly not Giveth.

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This is easy to say and not easy to do. Projects that are already formed as an organization is having hell of a time flattening their org structure and going through organizational changes and those who wants to build DAOs in the first place need a lot of guidance as there is skill set gap between those in the tech world and those in the social impact space. I think Giveth could be that missing piece if it wants to and truly understand the complexity of the situation it chose to be involved in.

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Again, where this matching fund goes to, the donor themselves don’t have a say. It’s different when they know for sure that the projects they are supporting are also benefiting.

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I could be in favor of GIVforward - if donors want to send their GIVbacks to the project instead (this may be a bit technical with the stream etc.)

The GIVbacks program was created with the intention of rewarding donors.
GIVbacks go to the Givers - its literally in our mission statement.

However I would like to bring to the surface the vision that Giveth has for ‘Cause Pools’.
Right now we are working on a distribution model for matching funds and in the future this matching pool will be split between causes with the intention of incorporating quadratic funding.
GIVmatching goes to the projects.

I am definitely not against rewarding projects - I just think that we should offer them their own program instead of piggy-backing them off of GIVbacks.

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There are costs and they include:

  1. taxable event depending on jurisdiction.
  2. Usability opportunity costs of using L2 solution.
  3. Off ramping or accessing funds.

Depending on the group/project size, their knowledge base and resources each of those can disrupt who continues to use Giveth as a platform.

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This is viewing Giveth platform from a binary legacy view of philanthropy model. The fact is token engineering a mechanism that creates incentive for projects to not sell is possible.

One example is working with strategic partners who hold % of Giv supply and use it as a reward mechanism for community members who want to support grass roots projects.

IMHO, Giveth tokenomics atm is focusing too narrowly on legacy institutional donors and not gtk the potential of a collective donor base of individuals who would also be building traction in the Giv token use case through staking.

TL;DR - rewarding legacy donors w/ Giv is similar to concentrating potential of Giv. If the concern is sell pressure for Giv then there’s not enough of user base for the token. Allocating Giv bags to less engaged donors (latent user to web3) can progressively be part of strategy but not the only one to hold demand side.

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FWIW @karmaticacid @Griff @mitch @Suga

I’ve been recycling the same $500 donation on Kiva since 2014.
I used to manually reloan the funds and at a certain point Kiva implemented a learning algorithm about my preferences for loaning and it looked something like this:

  1. If recipient is female/mother
  2. and loan is within 90% to funding
  3. then fully fund

I mention this because my giving style is to finalize and make opportunity real for the person seeking funds. I also know that the field of token engineering can be used for more than just an incentivize/bribe rewards. In fact I know token engineering can be used to model the flow of user behavior that optimizes for specific kinds of users/behavior.

I’m sharing this bc my hope is either through a governance process or smart contract implementation that GIVForwards can begin to inform a credit allocation algorithm for users who actually put their Giv to use rather than simply stake to reward themselves. Simply said too much thinking about what rewards degens instead of regen user types.

I scanned the GIVmatch link that @WhyldWanderer shared and found myself wanting to see the diagram/flows and outputs that are informing the parameters being considered.

I know Giveth as a brand has been around since 2017 but I don’t know that I’ve ever come across a simple white paper w/o the branding that maps out the token supply over the ecosystem and participants it’s intended to serve.

It’s possible I may have missed a miro board so please someone surface it for me. I’m basically trying to see the value flow and outputs of GIVmatch, GIVreward and GIVforward. To me they’re all a form of GIVpower and I wanna visually understand how the game theory behind each of those circulates when modeled out. Kinda like an electric circuit.

Lastly I wanna share that I admire all that everyone has done to steer the Giveth ship to this place because it is a remarkable platform/product. Stay epic ya’ll and ty @rainer.hoell @qqsong for opening this can of worms.:purple_heart::mushroom:

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Thanks for itemizing the cost to the projects/nonprofits.

The nonprofits I talked with have hesitations not against crypto but worry about the tax situation depending on jurisdiction when they receive funds (this is particularly true in Europe). Hiring a specialist to inform them about these taxable events and off-ramping sometimes cost way more than the donation themselves (given those are really small amount, far less than the average gift in other platforms). These costs need to be considered.

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That forum post is a place for idea generation as of now. We will discuss options and share ideas there. Then, once the matching pool has reached 250k (half of our goal), we will start to create a plan and action items on implementation. Nothing is written in stone over there and we would love to have your input if you have any great ideas on how we can distribute the funds in the matching pool.

I am similar to you with the visual aspect as well… much easier for me to visualize the bigger picture.

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I wrote a pretty thorough spec however that is open for review:

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@rainer.hoell Thanks for this proposal, IMO you did a great job underlying the perpetuation of power dynamics that are a challenge for the operation of non-profits and for good projects.

TL;DR: I agree 100% with the spirit of the proposal. But I don’t believe a simple split of the GIVbacks is the way to fix it. I will try to break the issue to make it easier to separate spirit from implementation.

1. If we are building the future of giving? Shouldn’t the grassroots organizations have governance over that future?

Hell yes. They are the ones that know the best way to create impact. As @qqsong stated the data backs this up. It’s not a coincidence that the people that have more experience working with non-profits are bringing this point forward.

Do you disagree with the governance point too? @mitch @karmaticacid

2. Should we split the GIVbacks between donors and projects?

I don’t think that’s the right move.

As @karmaticacid and @WhyldWanderer state, the GIVbacks program is an incentive designed to create reciprocity to donors. It’s especially important to keep it above 50% since we compete with tax breaks and it’s in our best interest to offer a better deal. Furthermore, we shouldn’t approach 100% in GIVbacks otherwise our platform would be gamed.

But we can offer governance to projects and even additional funds without splitting the GIVbacks. Here are some ideas:

a. Create a governance structure similar to optimism, where governance is splitted equally between two houses: The Citizens House and the Tokens House.

b. Projects could receive soul-bound NFTs or a different token for projects that incentivize good behavior: Creating a project, getting more donations, making more impact, uploading their updates, etc. I prefer the soul-bound NFTs because maybe part of the governance shouldn’t be tradable.

c. GIVforwards sounds like a great idea. That would let donors GIV more than 100% of their money.

Additional points:

For the for good projects, it’s not going to be as easy as build-it and they will come. I definitely think we should get more creative on helping projects get benefits from Giveth. Some can be based on code and rewards. But others are about helping them use the platform better, develop skills, and help to understand all issues that can make them hesitate. Like tax implications or the risks of web3. This is why I love the idea of having the Fundraising 101 program.

Even though I don’t believe we should split the GIVbacks program. I would get onboard with redesigning a reward system that would reward different stakeholders: referrals, projects, people offering support, we could probably have many more stakeholders and I think we should incentivize anything that would help Giveth and its impact grow.

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Idk that this serves as an incentive to an already tax exempt entity. I think the real benefit of allocating more to token supply to donors is so they can navigate slippage or conversion dynamics to get funds to destination.

For example a person donates $1K in US securities to a foundation/charity the foundation/charity may elect to not sell those and instead offset the $1K donation from a separate internal fiat cash account. Then they’d have to put that $1K fiat to use in ETH <> GIv with enough GIV token supply to ensure roughly a $1K donation is made on Giveth tp a project.

This is why I believe a pool together rewards model using GIVbacks would benefit the entire ecosystem because it would represent a greater % of the total 50% allocation and with a proper governance participation layer act like a perpetual reserve to the token value and applied towards givebacks based on defined ranking parameters.

I like this and can see this working because Giveth’s flexibility in iteratively tweaking a rewards program could chart a path toward improving the relationship between donors and projects.

For example, if a governance framework was established to oversee the shared responsibility of fund distribution from a rewards program that were allocated for use in a community development financial institution; then that % of GIV would be used to incentivize bringing projects and donors together in specific regions or initiatives of impact.

Obviously the criteria for groups or individuals who have the opportunity to share in this specific kind of decision making would need to be defined. I’m curious to see what emerges in human behavior and platform use as we progress w/ donor onboarding. I’m sure we’ll get new data to consider from that alone.

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Hey everyone, sorry for the radio silence. Covid crushed me for five full days after ETHBarcelona, and I am still not fully up to speed…

@mitch, @karmaticacid, @rpiesveloces, thank you for your early comments, I learn a lot from you here. And thank you all also for the thoughtful comments after that. We have a few fantastic implementation ideas here!

Here is what I see on the spirit level (to use Cotabe’s distinction):

There are differing views on more governance power for projects. I understand the inclination to say “but they already get the donation itself, isn’t that enough?”. Three thoughts on this:

  1. It really is more about decision-making power than funds. The tragedy in philanthropy/giving is that privileged donors gladly give money to nonprofits, but they typically don’t question or even change the structures ensuring their privileges. The only remedy is to make the infrastructure for giving itself more egalitarian. Giveth has a chance to do exactly that.

  2. For this reason, I am skeptical of solutions where donors themselves decide to share some of their GIVBacks with projects. It would be again the mercy of the donor that decides if projects get more of a say. It reiterates again the same power dynamic.

  3. I understand that projects can also get GIVs through other ways (donated GIVs, matching funds). The question for me here is: Does Giveth merely allow projects to also hold GIV? Or do we actively encourage them to use them (besides selling them)? I think Giveth should send a signal to let them know they are offered a seat at the table and that there are welcome in the community.

Here is what I see on the implementation level:

  1. There are good arguments against piggybacking on the GIVBacks program. I understand that. So whatever we do for projects, let’s not call it “GIVBack”. The main reason I had suggested a “split GIVBacks” approach was that I did not want all of this to be more expensive for Giveth.

  2. Another learning: Whatever we do, it should not make it too easy for projects to just sell off the GIV they receive, putting pressure on the token. That’s why I like the alternatives: GIVForward (cool name!), soulbound NFTs or the two-house model. I guess it would take a session with people way more crypto-competent than me to decide and/or design the best mix of these.

I think criteria for the best mechanism regarding the latter could be:

  • distributed by Giveth itself, not by donors
  • governance power not (too) second-rate compared to donors
  • easy to understand
  • not too easily transferable
  • as inexpensive as possible for Giveth

@Cotabe, would love to have a call with you on this.

Right now, I think the GIVForward idea is probably the best mix of all of these. If the GIVs are pre-staked, they are not that easy to sell. And once projects have found out how to do that, they have learned already a lot about tokens and DAOs – which is exactly what we want. And it would instantly make all the other GIV-based mechanism accessible to projects, e.g. GIVpower. But let’s discuss.

Oh, and I love the cross-reference to the matching fund. Will comment separately.

I would love to keep this thread open for more discussion for another week or two…