Revolutionizing Nonprofit Incentives: A Conversation with Griff, Founder of Giveth

In an exclusive interview with Griff, the founder of Giveth, we delve into the groundbreaking realm of blockchain technology and Decentralized Finance (DeFi), exploring how nonprofits can revolutionize their incentive models to align seamlessly with their mission and community preferences. With a passion for leveraging technology for social good, Griff sheds light on the transformative potential of tokenisation, decentralized governance, and community engagement in the nonprofit sector. Join us as we uncover insights that promise to reshape the future of nonprofit organizations and their impactful endeavors.

*For clarity and better comprehension, the answers presented in this article have been re-structured and made more accessible for educational purposes.Additional explanations that have been added are in italics. For those interested in viewing the full, unedited interview, please refer to the below video interview*

Many people are familiar with traditional crowdfunding platforms like Kickstarter and GoFundMe, which operate on the Web2 model. How does GivEth, utilizing Web3 and DLT, differentiate itself from these platforms in terms of funding public goods?

• What is Giveth? Giveth serves as a donation platform, facilitating nonprofit entry into crypto fundraising. Nonprofits progress to advanced technologies like tokenization and DeFi.
• Giveth’s functions : Giveth functions like a crypto-based GoFundMe, donors gaining GIV tokens, not tax deductions. Gitcoin offers a crypto-based approach to fundraising, allowing nonprofits to accept donations in cryptocurrencies. This provides an opportunity for donors to receive GIV tokens as rewards instead of traditional tax deductions. While Gitcoin currently focuses on cryptocurrency donations, they are working to bridge the gap between crypto and traditional financial systems.

Why would a traditional organisation consider implementing blockchain and DeFi solutions to increase efficiency?

Every terms below are explained in more details at the end of the article. Here it is only a quick overview.

The interview pans out to the broader impact of Web3 and DeFi on philanthropy and social impact where conventional channels, dominated by governments and philanthropists, operate through centralized mechanisms.Web3 and DeFi transcend these limitations, establishing decentralized, accessible, and transparent avenues for funding.The transformative potential lies in enabling individuals and organizations to devise token economies that fund public goods, all while maintaining transparency.Blockchain's inherent capability for transparent impact tracking and accountability ushers in an era of radical innovation within the realm of philanthropy and social impact.

• Transparency and Accountability: All transactions and activities are recorded on a public ledger that can be audited by anyone.He emphasized that this transparency is essential for nonprofit organizations to build trust with their community and donors.
• Programmable Money: Griff explained that blockchain allows for programmable money, meaning that conditions can be set for how funds are used.This feature ensures that the funds are used in ways that align with the nonprofit's mission and that the community agrees upon.
• Decentralized Autonomous Organizations (DAOs):DAOs were a significant point in Griff's discussion, and he mentioned that they are a way to give community members a voice in the decision-making process.
• Token Incentives and Alignment: Tokens in a DAO incentivize individuals to participate and contribute meaningfully to the organization.Griff gave an example of how selling Girl Scout cookies is similar to the token model, where buying cookies supports a cause – in this case, the nonprofit.He mentioned how the Giveth project rewarded token holders with "cred," which represents credibility in the community.Token holders who have "cred" can influence decisions, creating alignment between incentives and desired outcomes.
• Liquidity Pools and Lending Protocols: Griff touched on DeFi, which is a term that refers to decentralized financial tools and platforms built on blockchain. He mentioned liquidity pools, where people provide their funds to a pool and, in return, receive tokens that represent their share of the pool. This allows for decentralized trading. He talked about lending protocols, where individuals can lend their assets and earn interest, all executed through smart contracts without intermediaries.
• Global Accessibility and Inclusion: Griff discussed how blockchain and DeFi can be accessed by anyone with an internet connection, promoting financial inclusion and accessibility. He noted the potential of these technologies to empower individuals who are excluded from traditional financial systems.
• Efficiency and Reduced Intermediaries: Blockchain transactions occur directly between participants, reducing the need for intermediaries such as banks or payment processors.Griff highlighted the efficiency gained by eliminating middlemen and the associated costs.
• Permissionless Innovation: Griff mentioned that blockchain and DeFi allow for permissionless innovation, where anyone can build new applications or tools on top of existing platforms. This fosters a creative environment where new solutions can address nonprofit challenges.

Could you explain what is tokenisation, how it can enable a more efficient support for public goods and what is Giveth's approach to tokenisation?

• Tokenisation definition: Tokenisation enables quantifying qualitative value, which is challenging for nonprofits.?
• Tokenisation, an innovative approach mimicking government’s public goods funding ( taxes and issuance) : Griff states that tokenisation strategy can mimic governments' public goods funding via taxes and issuance. He emphasizes that taxation essentially taps into economic activity to fund public goods, and this funding approach can be seen as a multi-layered process. Currency issuance, often through loans and bonds, showcases how governments fund public goods. He underscores that governments collect substantial taxes, yet still rely on issuance mechanisms to fund their initiatives. This insight, he believes, can be replicated by individuals and organizations through crypto mechanisms, creating economies where economic activity generates revenue, which is then used to fund societal initiatives. He explains that Giveth's tokenisation strategy mirrors the conventional government funding model.?
• Tokenisation benefits: It? includes decentralized, programmable money and DeFi examples. What does that mean concretely?

1. Decentralized: Tokenisation allows nonprofits to create digital tokens that represent value, such as contributions or incentives. These tokens are typically built on blockchain technology, which operates in a decentralized manner. This means that no single entity has complete control over the tokens. Instead, they are distributed and verified across a network of computers (nodes), making them resistant to censorship and tampering. In the context of nonprofit incentives, decentralized tokens ensure transparency and trust. Supporters can verify token issuance and ownership on the blockchain without relying on a central authority.Example: In the case of Giveth, the organisation used blockchain-based tokens to reward its community. These tokens, like "cred," were issued in a decentralized manner, ensuring that the organisation itself couldn't manipulate or alter token distribution.
2. Programmable Money: Tokenisation also brings the concept of programmable money. Traditional forms of money, like cash, lack the ability to carry out specific instructions once they're exchanged. Tokens, on the other hand, can be programmed with smart contracts. Smart contracts are self-executing agreements with the terms of the contract directly written into code. This allows nonprofits to automate certain processes, such as distributing incentives when certain conditions are met.Example: A nonprofit could create a smart contract that automatically rewards donors with a specific token when they reach a certain donation threshold. This programmable feature eliminates the need for manual intervention and ensures that incentives are distributed fairly based on predefined criteria.
3. Decentralized Finance (DeFi) Integration:?DeFi refers to the use of blockchain technology and cryptocurrencies to recreate traditional financial services in a decentralized manner. Nonprofits can leverage DeFi concepts to enhance their incentive systems. For instance, they can enable token holders to earn passive income by participating in liquidity pools or lending protocols within the nonprofit's ecosystem. This introduces an additional layer of value and engagement for supporters.Liquidity pools : Think of a liquidity pool like a shared piggy bank. In the world of cryptocurrencies, a liquidity pool is a pool of funds contributed by many people. These funds are used to make sure there's enough money available for buying, selling, or trading different cryptocurrencies smoothly.Imagine you and a group of friends each put some money into a piggy bank. This piggy bank is the liquidity pool. Now, whenever someone wants to trade one type of cryptocurrency for another, they can do it using the money from the piggy bank. This helps trades happen quickly without depending on finding a specific person to trade with.As a "thank you" for putting your money in the piggy bank, you might get a little bit of a new cryptocurrency as a reward. This is similar to the idea of earning interest in a regular bank.Lending protocols : They are like letting a friend borrow your toy in exchange for a small fee. But in the world of cryptocurrencies, you're lending out your digital money and getting some extra digital money back as interest.Imagine you have some digital coins that you're not using right now. You can lend them to someone else through a lending protocol. In return for lending your coins, you'll get extra coins as a fee for lending. When the person you lent to is done using your coins, they'll give them back to you along with a little extra as thanks.It's like letting your friend borrow your toy and getting a sticker as a thank-you gift when they give it back. The extra stickers (coins) you collect for lending your toys (coins) make it a bit like earning interest.Example: Imagine a nonprofit creates a DeFi platform where token holders can stake their incentives tokens in a liquidity pool. This pool is then used to provide liquidity for donations or other transactions within the nonprofit's projects. In return, token holders earn a portion of transaction fees, creating a sustainable incentive model that benefits both the nonprofit and its supporters.

What are the key mechanisms and incentives to adopt in the tokenisation model?

• Governance Rights in DAOs (Decentralized Autonomous Organizations): Nonprofits can establish a DAO, which is like a digital democracy. Token holders become active participants with a say in various decisions, such as how funds are allocated and which projects take priority. This decentralization of power ensures that the community's preferences are considered, and important choices are made collectively.
• Token Voting Power for Decision-Making: Tokens can represent voting power within the nonprofit's ecosystem. People who hold more tokens have more influence over decisions. For example, if the nonprofit is deciding on which projects to fund or which direction to take, token holders can vote using their tokens. This gives a voice to those who are more invested in the organization's goals.
• Stakeholder Empowerment and Participation: Owning tokens of the nonprofit translates into being a stakeholder and an active participant. This means that token holders are not just passive donors; they are involved in shaping the nonprofit's journey. Their level of involvement is proportional to the number of tokens they hold, creating a meritocratic system where those who care the most have a stronger say.
• Leaderboard and Recognition: Creating a leaderboard or recognition system for top supporters, showing off their contributions and involvement with the organization.
• Backstage Pass and Access: Providing token holders with special privileges or backstage access to events, meetings, or interactions with key figures within the organization.
• Utility Access: Providing utility behind the scenes, such as exclusive content, special features, or access to certain services or products.
• Staking and Rewards: Implementing staking mechanisms where token holders can lock their tokens and earn additional tokens as rewards or interest.

Implementing DAO models within organisations/ non profits to create a more democratic and community driven model for decision making and resource allocation. Could you explain it further?

• DAO definition: A DAO, or Decentralized Autonomous Organization, is an innovative organizational structure that operates based on smart contracts and blockchain technology. It's designed to be self-governing, autonomous, and driven by the collective decisions of its participants. In the context of nonprofits, DAOs offer a way to create a more democratic and community-driven model for decision-making and resource allocation.
• Its mechanisms

1. Structure and Decision-Making: In a DAO, decisions are not made by a central authority or a small group of individuals. Instead, they are made collectively by the community of token holders. Each token holder has voting power that corresponds to the number of tokens they hold. This decentralized structure ensures that decisions are made with a broader perspective and avoid the pitfalls of centralized decision-making.
2. Proposal and Voting Process: Griff discussed how proposals are put forward within a DAO. When someone has an idea or a project that requires funding or resources, they can create a proposal and present it to the DAO. The proposal outlines the details of the project, including its goals, budget, and expected impact. Token holders then have the opportunity to vote on whether to approve the proposal and allocate resources to it.
3. Transparency and Immutability: DAOs operate on a blockchain, which provides transparency and immutability to the decision-making process. Once a proposal is voted on and executed, the details are recorded on the blockchain, ensuring that the process and outcomes are transparent and tamper-proof.
4. Rewards and Incentives: DAOs often have mechanisms for rewarding participants who contribute positively to the organization. This can include individuals who propose valuable projects, vote consistently, or bring innovative ideas to the table. These rewards are typically in the form of additional tokens, creating a direct alignment of incentives with the organization's goals.
5. Challenges and Considerations: Griff discussed some challenges associated with DAOs, such as voter apathy, governance scalability, and potential manipulation of the voting process. He highlighted the importance of continuously refining the DAO's rules and mechanisms to address these challenges.

How can nonprofits successfully leverage tokenisation and ensure that the incentives they offer align with their goals and community preferences?

• Understanding the Organization's Mission and Values: The founder mentioned how a nonprofit focused on environmental conservation would align incentives with goals by offering rewards like planting a tree for each donation. This shows a clear alignment between the incentive (tree planting) and the organization's mission (environmental conservation).
• Engaging the Community: The guest discussed a scenario where a nonprofit engaged with its community by conducting surveys and gathering feedback to understand whether supporters would prefer physical tokens or digital NFTs as incentives. This demonstrates a direct effort to involve the community in incentive decision-making.
• Analyzing Past Successes: The guest mentioned that after analyzing past campaigns, they found that giving donors early access to certain content resulted in higher engagement and donations. This showcases the nonprofit's use of historical data to inform future incentive offerings.
• Customizing Incentives: Griff provided an example of a nonprofit selling NFTs to forgive medical debt. This customization directly ties the incentive to a compelling cause and community preference, as supporters can visually own a digital item while contributing to a meaningful goal.Practical use case:? if a nonprofit focuses on environmental conservation, they could create tokens that symbolize a certain level of contribution to planting trees, cleaning up beaches, or other eco-friendly initiatives.These tokens could then be earned or distributed to community members who actively engage in activities that contribute to the mission.By linking the incentive tokens to specific projects or causes, the nonprofit ensures that the rewards directly align with what the community values and what the organization aims to achieve.
• Balancing Tangible and Symbolic Value: Griff discussed how nonprofits can offer tangible benefits like exclusive virtual events alongside symbolic rewards like digital badges for donors. This balance appeals to different types of supporters, some of whom may value exclusivity while others appreciate recognition.
• Evaluating External Trends: Griff highlighted the emergence of blockchain technology and its integration with nonprofit incentives. He explained how some nonprofits are exploring the use of social tokens or NFTs, showing an awareness of external trends and their potential impact on incentive strategies.
• Being Transparent and Ethical: Griff emphasized the importance of transparent communication with donors. He mentioned that donors need to understand how their contributions and the associated incentives align with the nonprofit's mission. This ensures ethical practices and fosters trust.
• Iterative Approach: Griff suggested that nonprofits should have a feedback loop with donors to understand which incentives resonate the most and adapt accordingly. This iterative process ensures that the incentive strategy remains relevant and effective.
• Leveraging Technology: Griff introduced the concept of tokenisation and NFTs, explaining how they can be used for incentives. He emphasized that while technology can enhance engagement, nonprofits should gauge their community's comfort level with these innovations.
• Importance of Active Engagement: Griff mentioned various methods for engaging the community, such as social media platforms, online forums, town hall meetings, and surveys. Events like town hall meetings, workshops, and conferences provide opportunities for face-to-face conversations and relationship-building.