The CARBON Copy (CC) team recently caught up with Evan Hudson, founder of the Center for Collaborative Economics. In this interview, Evan digs into donation models and what's next for CFCE.
CC: Welcome, Evan. Can you start by telling us a bit about yourself?
Evan: Sure. I am the founder of the Center for Collaborative Economics (CFCE), dedicated to supporting non-profits with blockchain and Web3. CFCE’s first project, a crypto donation app that allows users to track their donation impact using NFTs, is coming soon!
Later, the goal is to build infrastructure for users and groups to earn yield and fund public goods by pooling their funds for use in capital markets, like a DeFi credit Union. One step at a time!
CC: Let's start with this. Can you describe a couple of the key problems with the current donation model?
Evan: In the most basic sense, donations are a form of payment and like all payments in the current financial system, they are laden with friction, meaning they can be expensive and slow.
One level up, donations are often divorced from the impact they create, which I view as a missed opportunity to build connections between donor and recipient organisation and incentivize impact by rewarding effective organisations. These organisations are often different from the ones that receive the majority of donations under the current system. In other words, small non-profits led by the communities they are working with as opposed to big multinationals who can afford marketing campaigns and fundraising departments.
Finally, donations in their current form tend to reinforce colonial power dynamics rather than dismantling them. Even though well-intentioned, the underlying structure of aid recipient and charity worker is the mirror image of the classical colonial dynamic of subaltern and administrator, with the donor playing the role of consumer of goods produced in the colony.
CC: Are these problems a result of the financial system in which we live or are they system-agnostic?
Evan: I hope your readers aren’t too offended if I reveal my Occupy Wall Street colors by saying that the problems with the current prevailing charity/donations model are indeed rooted in our current global economic/geopolitical system, namely neoliberal globalised capitalism.
However, in my opinion, these same issues of structural inequality and donations serving to reinforce rather than dismantle hierarchical power dynamics would inevitably arise in any political/economic system founded on centralised, hierarchical power and control, especially by financial interests as in our present system.
It might sound idealistic or unrealistically optimistic but I firmly believe in the importance of imagining alternative systems and arrangements of power and value!
It almost seems absurd to imagine a world where the vast majority of wealth wasn’t controlled by the 1% and the main role of the government wasn’t to protect and advance the interests of extractive businesses. And yet, we live in a historical moment where systems are dissolving, cracks in the post-WW2 global order are beginning to get too big to ignore. It’s up to us to envision something better - a parallel system centered around quality of life instead of endless growth perhaps - and then build it!
CC: Can you expand a bit more on the idea of incentivising impact by rewarding effective organisations? What does that look like?
Evan: The low-hanging fruit would be something like taking publicly available data provided by non-profits and ranking them, similar to what GuideStar does. High-performing non-profits could be rewarded with matching donations, more visibility and so forth.
However, in my opinion, a strict emphasis on data when assessing non-profit performance misses the bigger picture, which should include qualitative and intangible factors as well as data-based metrics of efficiency.
For example, does this non-profit comprise members from the community it is serving? Is it providing a form of impact which is especially needed in the time and place it is working in? Is it operating on a smaller budget than similar NGOs but delivering outsized results? Things like that.
Ultimately, thinking long term, what we at CFCE would like to do is incorporate ongoing assessment of non-profit initiatives to reward both the non-profits and donors for the impact they worked together to create.
Rewarding the creation of impact directly, based on assessments conducted in the open, would represent an important shift in the grant-making process, removing intermediaries and reducing friction. I feel like Gitcoin and Giveth (who are both extremely rad btw!) are probably headed in this direction.
CC: Do you have an approach in mind for making this work?
Evan: CFCE’s idea is to use AI to assess the information submitted by non-profits about their initiatives to create impact reports, which are then checked and verified by decentralised autonomous organisations (DAOs).
Once the impact report is verified, the donors, non-profits and verifiers would receive rewards for the impact created: tons of carbon offset, for example, or malaria reduced year-over-year, or students graduated from high school, and so on.
Obviously that’s very complex! A lot of open questions remain. For example: How is impact to be validated, evaluated and valued? Should an education impact token be worth more or less than a clean water impact token? Should there be 17 types of impact tokens or just one?
CC: Is there a donation model that would fit within the regenerative paradigm, and, if so, what would that look like?
Evan: Man oh man. Great question. We should convene a weeklong retreat to discuss this exact question, because ultimately, it’s not up to me, nor should it be.
But yes. It is very possible to imagine a system which incentivises the funding of impact - progress towards shared goals - in a way that tends to create more equitable, inclusive systems where power and value are distributed according to the will of the community and not parasitic corporations and corrupt intelligence agencies.
I submit that this system would:
- Incentivise the creation of impact (whether by donating funds, time or energy)
- Benefit all parties involved (except the aforementioned corporations/.1% maybe), including the environment
- Tend towards sustainability in terms of creating sustained funding flows/yield instead of periodic donations
- Tend towards decentralised/distributed administration of funding by the people closest to the projects being funded - a strong emphasis on putting control in the hands of local communities and the people who know best
Of course there’s more! I apologise if those are vague. Like any good topic, this one telescopes in complexity as soon as you hold it up to the light. There are so many moving parts!
I will end somewhat cryptically by saying that I believe impact itself is a form of value, which could potentially be used to back a currency (look to green bonds for a current primordial version of what this could look like.) Imagine paying for a cup of coffee or haircut with a voucher earned by planting trees or working in a soup kitchen for an hour.
Ultimately, the best system for donations will be the one that makes donations unnecessary. I feel that this design principle - tending towards self-sustaining syntropic ecosystems - could be useful from the beginning of designing a better machine for donations and impact investing.
CC: In what areas would you see this model having the most impact?
Evan: My answer to this is a two-parter. Two-and-a-half, maybe.
First: There are 17 different UN Sustainable Development Goals. There are plenty of very good criticisms of the SDGs but I do think they’re a good metric for dividing up different types of impact. I think a new donation system could and should affect all 17 types of impact.
There is a lot of energy behind environmental regeneration at the moment: carbon neutrality, biodiversity and so forth. But environmental goals are intimately linked with human goals, and it’s impossible to create lasting change by pursuing one type of impact to the exclusion of others.
Solutions, from the project level up, should be holistic. I think the movement away from naming community involvement in carbon credit projects as “co-benefits” and towards more holistic models like the Ecological Benefits Framework is evidence that the conversation is shifting in the right direction.
Second: Following the work of Wendell Berry and EF Schumacher, I think small is beautiful and local-scale economies and environments are where the most meaningful impact can be created.
Second-and-a-half: As a former heroin user, harm reductionist and human who has seen so much suffering as a result of the genocidal so-called “War on Drugs,” the type of impact I would most like to see is an approach towards mental health and addiction recovery which is human-centered, solidarity based, and grounded in compassion instead of shame and punishment.
CC: To finish up, can you tell us what's on the agenda for you and CFCE in 2024?
Evan: We are currently very focused on testing and rolling out our first platforms over the next few months:
- A carbon/eco offset-focused donations app named GiveCredit, built on Stellar first. We were just awarded a grant from the Stellar Community Fund to get this app off the ground!
- A multi-chain donations app named Giving Universe, built on XRPL and XDC first.
- An impact NFT marketplace named EnlightenMint.
We’ll be looking for beta testers soon who will be rewarded for giving us 15 minutes of their time to test our app, so please watch out for announcements!
Once we get our initial donation apps up and running we can think of building all the other cool stuff. Or, ideally, we’ll find other people interested in collaborating with us to build it, because this movement is way bigger than any single project or organization.
You can reach out on Twitter @c4collabecon or via our website.
The answers in this article are the personal opinions of Mr. Hudson and do not necessarily reflect the views of the Center for Collaborative Economics.