Philanthropy DAOs — The future of giving?
Next up in our series on web3 use cases are ‘Philanthropy DAOs’. This label covers a wide array of web3 and DAOs used as vehicles for giving. There are interesting diverse models emerging, ranging from the facilitation of giving cryptocurrencies over making giving an incremental part of business models to the development of new and sustainable models of giving.
According to the annual report of The Giving Block, an organisation facilitating cryptocurrency donations to charities, donating cryptocurrency to charitable organisations has emerged as a sustainable source of fundraising for nonprofit organisations and charities. Underlining these trends, large and well-known charities like Save the Children have started to receive donations in the form of cryptocurrencies and NFTs.
To counter the relatively high entry cost to the web3 ecosystem, service providers such as Charity DAO have started coordinating efforts to solve the issues around crypto and blockchain applications for charitable giving.
We collected some of the pioneering projects building DAOs that help charities discover new business models that could make them financially stable and sustainable.
In general, a best practice to learn more about these organisations is to join their Discord channel and explore all available resources posted there.
Big Green, the organisation behind the DAO, was founded in 2011 with a belief that growing food changes lives. The Big Green DAO is the first non-profit led philanthropic DAO. They are a US-based 501c3 non-profit that believes growing food changes lives. The DAO they are launching is an experiment in democratising and decentralising grantmaking.
How it works
- The Big Green DAO is leveraging blockchain solutions that engage community members and organisations in a collective decision-making role by utilising ERC-20 governance tokens to exercise cooperative input and control over a treasury of grant dollars.
- Members can discuss potential projects on Discord and vote on the direct distribution of funds to nonprofit organisations.
- The selected food or gardening nonprofits can receive funding from the Big Green DAO. Successful applicants will also receive a DAO governance token to drive future funding.
- The DAO committee is composed of Big Green’s trusted partners and the DAO’s first grantees. Each committee member is a representative of an organisation working in the food sector and each member organisation has been awarded a $50,000 grant to support its mission.
Angel Protocol empowers charitable organisations to create non-custodial endowments by connecting them with more donors, providing them with a more reliable income stream. Donations are directed to their Angel Protocol account and automatically invested in low-risk, high-yielding products made possible by blockchain technologies (Decentralized Finance/DeFi). Every week, a portion of the interest from those DeFi products is sent to the charity and the remainder is automatically reinvested, compounding in perpetuity.
How it works
- Charities register to be listed on the donation marketplace. Each charity is listed with an alignment to one or more SDGs.
- Donors that are looking to make a sustainable impact, select an individual charity or group of charities to donate to. They select what % of their donations go to the charity’s endowment versus account for immediate access.
- Charity endowments grow at high-yield rates. Each month, a portion of the endowment is released to the charity’s liquid account for immediate access.
- Donations via Angel Protocol currently earn over 15% yield for partner nonprofits every year, in perpetuity.
Endaoment is a Community Foundation built for decentralized finance and focused on social impact with a mission is to encourage and manage the charitable giving of cryptocurrency.
How it works
- Endaoment enables smart contract philanthropy: Donor-Advised-Funds and Community Field-of-Interest Funds are powered entirely by smart contracts, a new kind of digital agreement facilitated on the Ethereum blockchain.
- Endaoment creates a dedicated Ethereum address for every nonprofit organization that receives a grant from one of their DAFs.
- Together with an easy-to-use donation and grantmaking application, they’re building a new kind of community foundation, with values and functionality aligned for crypto.
Giveth is an open, non-hierarchical global initiative to empower communities with novel decentralized technologies to address their collective needs working as a ‘Decentralized Altruistic Community’ using blockchain technology to enable donating directly to social good projects with zero added fees. Giveth’s goal is to become the gateway for non-profit organisations into web3 by providing them with the tools to grow their own communities via DAOs and crypto.
How it works
- Giveth builds tools for the common good and supports others in doing so as well. On the Giveth DApp, 100% of the funds donated go to the cause the donor intended to support.
- Makers can create their own projects and start raising funds, while Givers can use the platform to give donations to a cause or a project.
- Their system connects the people on the ground directly to the Givers, and provides a level of transparency and accountability no other platform can offer.
ImpactMarket is a decentralized poverty alleviation protocol enabling any vulnerable community to implement poverty alleviation mechanisms, like Unconditional Basic Income.
How it works
- You can submit a community for approval and will manage all the community beneficiaries.
- After getting accepted on ImpactMarket, each community will have one or more community managers that will add multiple beneficiaries and will keep the community public information up-to-date.
- Beneficiaries will have access to UBI from the chosen community until the funds run out.
- By donating to the DAO, anyone who wishes to contribute will be donating to the treasury and therefore, the funds received will be used as a reserve to fund communities in urgent need.
Code Green is a nonprofit helping NFT creatives from all over the world — with a strong emphasis on marginalized groups — to develop carbon net-neutral NFTs of their art, from music to memes and everything in between harnessing the power of the blockchain to heal the Earth.
How it works
- They raise funds for the most impactful climate projects on the planet by hosting dedicated NFT auctions at high-level events on the international calendar.
- They help NFT artists and projects, advising them on how to maximise their sustainability in the NFT space, and how best they can ‘give back’ to the planet by connecting them with verified social & climate solutions.
- They launch open-calls for emerging creatives, and artists from across the globe, to showcase their talents at high profile international global events.
- The DAO they are launching will generate endowment funds to protect community-driven climate solutions and green projects in the frontline of climate change.
Popcorn is a new paradigm for decentralized finance (DeFi) where yield-generating products simultaneously contribute to social impact. PopcornDAO is a decentralized autonomous organization of members holding Popcorn governance tokens (POP) who are able to vote on proposals that influence the parameters of the Popcorn smart contracts.
How it works
- Popcorn smart contracts allow users to generate yield on their crypto assets through the automation of yield generating strategies.
- A percentage of fees (e.g. 20–50%) generated by transacting with the Popcorn smart contracts are shared with social impact organizations elected by the Popcorn governance token holders (~beneficiaries).
- Popcorn governance token (POP) holders may nominate and elect beneficiaries through a multi-step proposal process:
- A beneficiary must be nominated and accepted by POP holders.
- After a beneficiary is accepted, it may then be awarded a grant through a separate voting process. A successful nomination will contain financial or impact reports, a mission statement, and an Ethereum address proof of ownership.
Did we miss some interesting new projects? Send them in the comments below!