GiveCrypto Monthly Update — January 2020: Scaled Back RCT, New Revenue Streams and Savings Circles

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GiveCrypto.org

6 min readJan 31, 2020

Sorry to start off this month’s report with less than great news, but I wanted to give an update on 2019 fundraising efforts and how they impact 2020’s plan. As you probably know, we made a fundraising push at the end of 2019. Our goal was to raise $2.5m, which would have allowed us to significantly expand our work in 2020. Unfortunately, we only raised $830k. While this is still a lot of money and we appreciate your support, the discrepancy requires us to adjust our budget.

We have taken the following steps to reduce spend while maximizing impact:

Reduced the scope of the phase 4 RCT (details below)
Employees deferring 22% of salary to a 2021 performance bonus
No new hires for 2020
No outside consultants for 2020

Based on the new budget, total spend will be $1.06m in 2020, of which $540k will be program expenses. Assuming we don’t raise any additional funds in 2020, we will take $226k out of the fund to cover 2020. These weren’t easy decisions to make but we believe they will put us in the best position to maximize GiveCrypto’s long term impact.

Updated RCT Plan

We have spent the past few months preparing for phase 4 of the Venezuelan Ambassador Program. This phase will include the first randomized controlled trial measuring direct crypto transfers.

Due to the fundraising challenges mentioned above, we had to make some cuts to the RCT and have reduced its total cost to $184k (from $550k). This includes the following changes:

Removed the crypto lump sum treatment group
Removed untreated recipients (for measuring spillovers) in each group
Reduced the number of ambassadors per group to 50 (from 70)
Reduced the number of recipients per ambassador to 7 (from 9)
Reduced the length of the program to 15 weeks (from 20)

We made these changes with the goal of minimizing any adverse effects on the RCT. It is important to note that the lack of a lump sum arm means we won’t be able to measure the impact of one-time vs. on-going payments. Including the lump sum arm would have allowed us to test whether a relatively large payment resulted in more investment-related purchases, rather than consumption-related purchases that we observed in previous phases. Also, the smaller total number of ambassadors and recipients may impact the statistical significance of the results.

We are hopeful that the RCT will still generate some very interesting data; comparing crypto to cash as well as both payment modalities to a control group. We have already started on-boarding ambassadors into the program and expect to begin transfers in early February.

Additional Revenue Streams

We are a charity and rely on donors to fund our work. Although we have been lucky to partner with some very generous supporters, we know that we need to find alternative ways to raise funds. One interesting approach is to integrate with Coinbase’s products, making it easy for Coinbase users to donate to charities.

Thanks to Coinbase’s product team, the first integration was launched at the end of last year, which involved adding a ‘donate to GiveCrypto’ banner to the homepage of Coinbase’s new iOS app.

Although the revenue generated by this particular integration hasn’t been significant, it is a good first start and has already taught us a lot about the conversion funnel for integrated donations. There are a number of other, more lucrative, integrations that are currently being planned.

Transaction Rounding

You have probably seen this type of donation mechanic on other sites. This feature involves building tools that allow users to donate while buying, selling or sending crypto.

We feel this integration has a nice revenue to effort ratio and have already started researching its viability.

Tax Optimization Tool

Another promising revenue stream is a tax optimization tool for Coinbase users. More specifically, we could develop tools that show users how their tax obligation might be changed by making charitable contributions. This is a non trivial technical challenge that also has some regulatory concerns, as need to avoid providing tax advice.

Our First Crypto Native Financial Service — Savings Circles

As we mentioned in December’s report, we have started experimenting with crypto-native financial services. The basic idea behind this work is that we can use crypto/blockchain technology to provide basic financial services in places where they are not available.

Those of us who are lucky enough to live in the developed world likely take our financial infrastructure for granted. It is relatively easy to open a bank account, get a credit card and qualify for a loan. This is not the case in other parts of the world.

Our work in Venezuela has taught us a lot about the plight of people living under hyperinflation. One especially sad conundrum is that only the wealthy have access to foreign bank accounts, which allow them to shield their assets from the bolivar’s inevitable decline. Crypto might be able to level the playing field for those who aren’t so privileged. A crypto wallet that supports stable coins means that anybody with a smartphone can effectively have a US bank account.

We decided to draft on the idea of rotating savings and credit association for this particular experiment. While there are many types of savings circles, we opted to implement a very simple version, which works as follows:

Each group/circle has 5 members
Each member sends the equivalent of $80 USD to our field operations representative each month (for a total ‘deposit’ of $400)
Each month one member gets a disbursement of $500 in USDC (GiveCrypto provides $100 per cycle as an incentive)
The deposits and disbursements continue for 5 months (one for each member)

This is basically a savings account with an artificially high sign-up bonus. We are testing people’s willingness to convert fiat into cryptocurrency and hold onto the cryptocurrency.

We began this experiment in December of 2019 and have completed two rounds of deposits and disbursements. We started with three groups of five people, for a total of 15 participants.

One of the groups has since disbanded, due to members’ unwillingness to continue making deposits. The other two groups are still going, meaning that ten people have made two $80 deposits and four people have received $500 in USDC.

Below are etherscan links to the wallets for the users that have received $500, along with their average daily balance. The current (as of 1/29/20) average daily balance is $473 across the four users.

We are pleasantly surprised by the willingness of the participants to convert bolivars into USDC as well as their willingness to hold onto USDC, rather than immediately convert it back into bolivars.

It is important to note that this experiment implicitly targets people who are in relatively good financial shape. There are many people in Venezuela who struggle to make ends meet and would never be able to come up with $80 each month. We believe that crypto can be used to help people at different levels of the financial needs hierarchy.

Staying Connected

As always, we love to hear from our donors and supporters outside of our updates and events. Please follow along on Twitter and our blog for updates on our Venezuelan Ambassador Program and other programs.