The funding model for civic organizations is broken. Too much effort is wasted on unnecessary competition over a small pool of resources. bkDAO aims to provide an alternative.
The “third sector” of society, distinct from government and business, works to address our civic needs: charities, political parties, local newspapers, education societies, religious organizations, labor unions, nonprofits, NGOs, volunteer groups.
These civic organizations are established to safeguard human rights or protect the commons; to provide mutual-aid or enhance solidarity; to address issues ranging from gentrification and climate change to mental health and refugee resettlement.
Yet despite their importance to society, civic orgs are chronically underfunded. Most rely on grants or individual donations, which forces them to spend a disproportionate amount of effort chasing financial support. This mode of permanent fundraising not only reduces efficacy, but also creates a rivalrous environment where similar organizations compete for the same pool of resources.
bkDAO inverts this dynamic by aligning local civic orgs in a fundraising and budgeting coalition that they control directly– through decentralized governance.
bkDAO Town Hall
Philip Hoffman is all too familiar with this dynamic. He is the Executive Director of the Brownsville Community Culinary Center, a non-profit that runs a culinary apprenticeship in a Brooklyn neighborhood with some of the highest poverty and crime rates in the city. Participants graduate from the program with the skills to succeed in the restaurant industry and escape a violent cycle of poverty. But like many civic orgs, the BCCC spends an immense amount of resources writing grant proposals, calling donors and organizing fundraisers.
Determined to find a better way, Philip began to look at emerging solutions in the blockchain world. He joined the bkDAO town hall at the Bushwick Generator, a crypto community space in Brooklyn, to share his experience and learn.
There he met artists, technologists and other civic leaders similarly interested in leveraging blockchain to devise alternative economic dynamics.
What is bkDAO
bkDAO is a blockchain-based benefit society for Brooklyn’s civic organizations. It is designed to create economies of scale in fundraising while distributing decision-making power across participants.
Let’s break this down.
A Decentralized Autonomous Organization (DAO) is a software-defined entity whose code runs on a public blockchain. Because blockchain code is self-executing, DAOs run exactly as programmed without human operators. This eliminates the need for a slow, expensive bureaucracy to enact decisions.
The public nature of the blockchain also guarantees complete transparency in use of funds. This could create levels of accountability seldom achieved in bureaucratic organizations.
2. Cooperative Fundraising
Each organization benefits from the economies of scale of the coalition as a whole. Fundraising costs are spread across participants, freeing up more resources for their core operations. A single coalition promoted by many reputable organizations could also attract more funds more consistently than many acting individually.
3. Participatory Budgeting
Budgeting is entirely participatory. Member organizations can submit proposals to fund anything, and voting power can be distributed on any basis– such as an organization’s size or effort spent fundraising. Decisions are made non-hierarchically and enacted automatically.
For example, participants could leverage bkDAO for:
- Organizational Budgets: subsidize operational costs for member organizations
- Joint Ventures: bootstrap collaborative initiatives among members
- Art & Placemaking Initiatives: compensate artists for public art projects
- Investigative Journalism: reward magazines that cover local issues
- Criminal Defense: pool money to pay bail for fellow New Yorkers
- Climate Resilience: construct water pumps and levies in flood zones
- Sustainable Retrofitting: renovate buildings to save energy or reduce greenhouse gases
- Job Training: fund a promising applicant’s culinary training at the BCCC
After proving itself as an effective “fundraising and budgeting coalition” for Brooklyn’s civic orgs, the bkDAO could extend itself to take on any number of civic functions, including but not limited to:
- Mutual Insurance: cover unexpected damages or financial loss for members who contribute a monthly premium to the DAO
- Credit Union: provide members credit at competitive rates
- Collective Bargaining: negotiate with suppliers for discounted member rates on essentials like office space or legal services
- Lobbying: advocate for policies that serve the public interest
bkDAO could also explore funding mechanisms other than charitable donations, such as:
- Services: offer members paid services like insurance or credit (see above)
- Member Dues: require members to pay entrance fees or recurring dues
- Tokenization: issue a reserve-backed currency through a continuous token model
None of these ideas are new. Mutual benefit societies, fundraising coalitions and democratic budgeting happen organically in communities all over the world. But in the modern urban context– where government and business are increasingly self-serving– civic arrangements must take on new forms to scale and fill the gap.
The bkDAO experiment will require broad-based community support to be as inclusive as possible. Join us.
To learn more about DAOs, check out: