At Govrn, our mission is to improve your relationship with your politician by fixing the core incentive problems in politics today. We believe the best way to do that is by starting at the most core level, campaign finance incentives. So after much research, we came across a donation type that actually increase accountability and fixes these incentives, something we call Outcome Based Donations (OBDs).
OBDs provide huge benefits as opposed to regular donations and create a new effective feedback loop between you and your politician. While we believe OBDs will be the building blocks for the next generation of campaign finance, we understand the concept can feel a bit foreign. So we wanted to give a quick explanation about what they are, how they’re used, and why they’ll fix the incentive issues we feel in politics today.
What are Outcome Based Donations?
Outcome Based Donations (or OBDs) are donations that are held in escrow contracts until predefined community metrics are reached.
Outcome Based Donations (or OBDs) are donations that are held in escrow contracts until predefined community metrics are reached. For example, if I wanted to make an OBD to improve education, I could make a $100 outcome based donation on the condition that high school graduation rates go up by 2% within 2 years in San Francisco. (Note these are examples and not a comment on whether that is actually the right goal, metric, or timeframe for an education outcome.)
Govrn applies OBDs to improve politics by attaching a politician as the responsible party for achieving the metric. So if we apply the previous example of education to a politician this time, I could make a $100 outcome based donation to the Mayor of San Francisco, if high school graduation rates go up by 2% within 2 years in San Francisco.
Have Outcome Based Donations been used before?
Outcome Based Donations are a version of outcome based governance (similar to what some call contractual democracy). While applying these concepts to politics might seem new and different, the idea of outcome based governance is more common than you think. Most jobs for example, use a form of outcome based performance (your compensation is tied to how well you perform or hit certain metrics).
Additionally, a version of OBDs is even used in government today. This is seen in the form of Social Impact Bonds, which is when government officials or funders will set aside money for private companies/organizations to accomplish certain metrics. You can think of OBDs almost as “reverse” social impact bonds, where instead of government putting aside funding for organizations to achieve an outcome, citizens can put aside donations for politicians to achieve an outcome.
OBDs end up fixing many of the incentive problems we have in politics today (more on this to come in future articles) but at the most basic level, OBDs align the interests and incentives of constituents and politicians. It keeps both politicians accountable to constituents and constituents accountable to politicians. Fixing the accountability in both directions is key to creating lasting and real change.
It keeps both politicians accountable to constituents and constituents accountable to politicians.
It allows politicians to spend more of there time providing solutions to constituents (instead of fundraising) and gives politicians assurances that when they accomplish a set of outcomes, they’ll receive the constituent support (in form of donations) that is needed for re-election.
What we’re starting to do is repair the relationship and trust between politicians and constituents. The OBD feedback loop is one of the few political feedback loops that doesn’t require some element of trust and allows for issue based feedback (instead of politics based feedback).
Over the next couple weeks, we’re going to be coming out with additional articles diving into how the metrics are chosen, additional benefit of OBDs, the Govrn Ecosystem, and much more - but for now we just wanted to give you a quick intro to the world of OBDs and how they work.
In the meantime - we’ve launched our Beta platform and we want you to come check it out!! To get access, go to www.Govrn.io, click on the “Create Change Here” button and you’ll receive instructions on how to join.