The problem: community foundations lack a participatory, transparent and easy to use platform to propose, select, fund, execute, and record projects. This leads to lack of trust from community members that would otherwise contribute funds and time, as well as missed opportunities of third-party funds from government and NGO’s.
This problem is important to us because we want to eradicate poverty. We believe that, given the right platform and guidance, communities will be able to solve many problems on their own in a more efficient way than through initiatives that come from outside the community.
Desired outputs: • Increased transparency and ease of use in process for proposing and selecting projects. • Increased transparency in the use of funds (foundation and external) • Transparency and traceability of all current and past projects.
Outcomes: • Increase in community participation (participants, funds, and volunteering time) due to increased trust on foundation and ease of use. • Increased access to outside financing and donations due to improved project plans and a traceable track record of the Foundation’s capacity to execute.
Why is blockchain needed to solve this problem?
• To generate a distributed consensus on governance so that people can cooperate with each other without the time spent on negotiating consensus. • To guarantee transparency in the use of funds and provide an audit trail which would give potential donors and citizens more confidence to trust and participate in the system. • To create a permanent record of the foundation and all of it’s projects. • Those that hoard cash due to fear of banks/technology/governments may be more likely to trust computer code that is operated by members of their own community. • Organizations that don’t have a lot of resources shouldn’t have to spend those resources on administrative overhead just to create basic organizational logic. Smart contracts could allow new organizations to “spin up” with minimal input of resources.
What is the size of the market?
It is humongous!
Potentially, every small town or even neighbourhood in the world could have a community fund if transaction costs were low enough and governance could be simplified.
According to the Community Foundation Atlas, there are 1,863 place-based foundations which make an annual $ 5 billion combined grantmaking. Unfortunately, Community Foundations are almost non existent in the third world. North America, Europe and Oceania account for 94.4% of all community foundations and carry a considerably higher average grantmaking.
What other solutions are currently being used to address this problem?
Community Fundraising solutions:
• Community Foundations are instruments of civil society designed to pool donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place, such as NY Community Trust, the Boston Foundation, etc • Crowdfunding platforms such as kickstarter, gofundme, patreon, etc. • Neufund is a community-owned fundraising platform. Companies can use our legal and technical infrastructure to legally issue a new type of asset on our platform, which we call tokenized equity, and into which anyone can invest. The Neufund platform thus acts as a bridge between the investment world and the blockchain space.
Community Governance Systems:
• Hive Commons (this is a BSIC Hackathon project) - The goal of Hive Commons is to enable a community of activists to pool their collective resources into a digital commons that is governed by a blockchain governance system based on the principles of Liquid Democracy • Boardroom.to (blockchain-based governance platform being developed by Consensys) - Boardroom is a Governance Framework and dApp made for Individuals and Companies to manage their Smart Contract Systems on the Public and Permissioned Ethereum Blockchains. • Loomio (non-blockchain governance platform) - Loomio is an online tool used to increase transparency and inclusion, decrease meetings and emails, and make better decisions together
Community currencies:
• www.colu.com - Cryptocurrency that can be used to buy items at local shops. The local shop saves on credit card fees (or cash headaches) and the customer “wins” by promoting local businesses over large enterprise and by getting discounts. • LETS - Local Exchange Trading Systems or Schemes - are local community-based mutual aid networks in which people exchange all kinds of goods and services with one another, without the need for money. • Cobudget - Cobudget helps groups allocate funds. • E-dinheiro - alternative mobile banking.
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