The Game Changer — Advocate Incentive Mechanism (AIM) to Power Charity Fundraising
As one of the major features on Grace, Advocate Incentive Mechanism (AIM) is a unique reward mechanism to organically incentivize charity campaign advocates.
Users on Grace can play the role of Advocates, who help generate additional exposure and donations for fundraising campaigns, and receive a percentage reward for their efforts.
Traditionally, a donor’s contribution is often one-off and transactional — the story ends the moment the donation is made.
On Grace, that is just the beginning. This blog post walks you through the many ways in which AIM will transform the way we do good.
Tackling Marketing Challenges
For many marketers, lead generation is a big challenge. According to results recently published by Hubspot, 53% of marketers indicate that at least half of their budget is allocated to lead generation, and 58% of marketers say their lead generation budget will increase in the coming year.
This represents an enormous opportunity where Grace can provide unique value. Grace elegantly solves the promotion problem with AIM, which provides economic incentives for Advocates to promote a cause.
Through word-of-mouth and social marketing, Advocates generate campaign exposure that attracts interested parties to donate, or to become Advocates on Grace themselves.
Network Effect: Aligning Individual Interest with Social Good
With AIM, a percentage of donor’s contribution is allocated to further incentivizing Advocates, meaning each contribution can trigger a ripple effect with lasting results, further increasing a campaign’s exposure.
It is designed to align the Advocates’ interest with greater social interest. Every party involved, namely the campaign Beneficiary, Advocate, and Donor’s actions are all economically better off in terms of value generation. The potentials and benefits of this network effect are immense.
Beyond Volunteerism: Reliable and Financially Sustainable Contributions
In many countries around the world, we have observed a steady decline in volunteering rate as well as the average annual number of hours of volunteer work done.
The decline is noticeable even in countries where volunteerism is ingrained in the local culture: in Canada, average annual volunteering hours have dropped from 168 in 2004 to 154 in 2013; in the US, volunteer rate has dropped from 28.8% in 2005, to 26.8% in 2011, and further down to 24.9% in 2015.
And most of the drop in participation rate is attributable to increasing opportunity costs.
We believe people intrinsically like to contribute to causes they are passionate about. Yet for many volunteers, time is very often a constraining factor and there is only so much sacrifice one can make before having to succumb to the unforgiving reality of daily affairs and commitments.
Grace tackles this significant issue by compensating Advocates for the time and effort they put in, so they can continue their charitable work in a financially sustainable way.
The incentive model is designed to be realistic and economically feasible. We foresee cases where Advocates successfully establish enough of a source of income from Grace rewards, to justify doing good full-time - A truly profound outcome in a world that is trending towards individual autonomy and decentralization.
Limitless Scaling: Freeing Up Limited Resources in Charities
Utilization of the AIM allows nonprofits to delegate promotional work to incentivized network users, namely Advocates, without incurring marketing costs up front. This effectively enables nonprofits to harness the power of social marketing to scale limitlessly.
In addition to marketing, talent recruitment and retention remain an especially challenging and time-consuming problem for nonprofits. By leveraging the values Grace offers, nonprofits can free up the significant resources otherwise required to hire marketing talents as well as marketing spending in general, so they can focus on areas that truly matter such as aid distribution, research and development.
Example — Donations with AIM
The potential impact of donations with AIM is better illustrated with an example. For simplicity, assume conversion rates of 1 ETH = $250 = 3,000 GRCE, excluding network transaction costs. An AIM reward percentage of 5% is used.
Chris is an Advocate on Grace who sees an existing campaign by Against Malaria Foundation (AFA). Chris blogs about the cause, and educates his friends and family on the effectiveness using insecticide-treated bed nets against malaria. His efforts result in two new Grace users in the first hour: Bob, a Donor who decides to contribute to the AFA through Grace; and Jessica, who is inspired by Chris’ work and becomes an Advocate herself.
Chris receives 60 GRCE for Bob’s donation. Jessica, by bringing on an additional Donor Martin who donates 2 ETH (6,000 GRCE), receives 300 GRCE for her work. Against Malaria Foundation receives an additional donations worth 6,840 GRCE (~570USD) brought in directly from Chris’ efforts.
The AIM is part of Grace’s core concepts and one of many values Grace brings to the table. To learn more about our mission to revolutionize charity fundraising, please visit the official website. We strongly encourage you to take a look at our whitepaper for discussions in more details.