Five Ways DAOs Will Revolutionize Social Impact
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So, now that we’ve covered what a DAO is, what makes them such a good fit when it comes to social impact?
Creating new models of accountability
One of the most interesting use cases of DAOs, is how they create new models and processes for accountability. Through the use of smart contracts and governance protocols, DAOs can enable the community to take ownership over causes they care about, and to hold leaders and organizations accountable.
While charitable organizations must have a Board, and most also have some sort of membership, the opportunities for community engagement in organizational matters – including how funds are spent and the types of activities and services that the organization undertakes – are often limited. By decentralizing the governance of these organizations, it presents new opportunities for community members, including beneficiaries, to have a direct say in the operations of the organization.
Flipping traditional fundraising on its head
One of the most obvious social impact use cases of DAOs, is utilizing them as a means for fundraising and providing direct donations to charitable causes. DAOs can be set up to accept membership from anyone interested in supporting the cause, through the purchase of governance tokens, and the group can decide collectively how the funds are dispersed. For example, let’s say 100 individuals purchased $100 of the DAOs token each, granting them membership and voting permissions, and 25% of the value of the tokens goes towards the DAOs charitable fund. The members (token holders) could then vote on which cause they want the $2,500 raised to support, based on a number of projects proposed by community members. As new members join, more funds are added to the pool, which can be paid out to charities at a pre-determined basis with collective input from the community.
The DAO could also organize fundraising events, NFT auctions, or other campaigns to raise funds from community members. A recent example of this is Ukraine DAO, a DAO that emerged shortly after the Russian invasion of Ukraine. The purpose of Ukraine DAO was to raise funds in support of Ukrainians suffering from the war, and they did this through the sale of a 1/1 NFT, and through cryptocurrency donations. In total, Ukraine DAO was able to raise over $8M USD in just a few weeks.
Bringing greater transparency to the social impact space
DAOs create new opportunities to bring greater transparency to the social impact space. Transparency is central to web3, and by bringing more charitable activities “on-chain” such as fundraising and the disbursement of funds, it will enable donors to know how much money is coming in, how it’s being spent, and how much of it is going directly to charitable causes.
Beyond finances, DAOs also allow for more transparent decision-making when it comes to important organizational matters. When it comes to DAOs, there are no in-camera voting sessions or secretive Executive decisions. Records of all important decisions, voted on by members of the DAO, could be available to the public on-chain to ensure a high degree of accountability and transparency.
Creating new incentives for social impact
Another interesting use case of DAOs, and crypto more broadly, is how they can use tokenization to incentivize positive behaviours and charitable activities. Let’s use a simple example.
Let’s say there is a DAO called Tree DAO that has the simple mission of encouraging individuals to plant trees. Their “TREE” token is used as a way to incentivize tree planting, by rewarding tree planters with a token for every tree they plant. These tokens then give the individuals ownership in the DAO, and the ability to even exchange them for goods and services.
Conclusion
DAOs are in their infancy but have already achieved so much, and there is limitless potential for them to be a true force for social good. The inherent nature of DAOs as open, decentralized, community-based organizations lends perfectly to the social impact sector, where greater emphasis is being placed on the importance of grassroots and community-level decision making, as opposed to the traditional hierarchical structures of charities and non-profits.
DAOs will be a vital part of the social impact ecosystem in the not-so-distant future, and it will be exciting to see the incredible growth that comes in the coming years.
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So, now that we’ve covered what a DAO is, what makes them such a good fit when it comes to social impact?
Creating new models of accountability
One of the most interesting use cases of DAOs, is how they create new models and processes for accountability. Through the use of smart contracts and governance protocols, DAOs can enable the community to take ownership over causes they care about, and to hold leaders and organizations accountable.
While charitable organizations must have a Board, and most also have some sort of membership, the opportunities for community engagement in organizational matters – including how funds are spent and the types of activities and services that the organization undertakes – are often limited. By decentralizing the governance of these organizations, it presents new opportunities for community members, including beneficiaries, to have a direct say in the operations of the organization.
Flipping traditional fundraising on its head
One of the most obvious social impact use cases of DAOs, is utilizing them as a means for fundraising and providing direct donations to charitable causes. DAOs can be set up to accept membership from anyone interested in supporting the cause, through the purchase of governance tokens, and the group can decide collectively how the funds are dispersed. For example, let’s say 100 individuals purchased $100 of the DAOs token each, granting them membership and voting permissions, and 25% of the value of the tokens goes towards the DAOs charitable fund. The members (token holders) could then vote on which cause they want the $2,500 raised to support, based on a number of projects proposed by community members. As new members join, more funds are added to the pool, which can be paid out to charities at a pre-determined basis with collective input from the community.
The DAO could also organize fundraising events, NFT auctions, or other campaigns to raise funds from community members. A recent example of this is Ukraine DAO, a DAO that emerged shortly after the Russian invasion of Ukraine. The purpose of Ukraine DAO was to raise funds in support of Ukrainians suffering from the war, and they did this through the sale of a 1/1 NFT, and through cryptocurrency donations. In total, Ukraine DAO was able to raise over $8M USD in just a few weeks.
Bringing greater transparency to the social impact space
DAOs create new opportunities to bring greater transparency to the social impact space. Transparency is central to web3, and by bringing more charitable activities “on-chain” such as fundraising and the disbursement of funds, it will enable donors to know how much money is coming in, how it’s being spent, and how much of it is going directly to charitable causes.
Beyond finances, DAOs also allow for more transparent decision-making when it comes to important organizational matters. When it comes to DAOs, there are no in-camera voting sessions or secretive Executive decisions. Records of all important decisions, voted on by members of the DAO, could be available to the public on-chain to ensure a high degree of accountability and transparency.
Creating new incentives for social impact
Another interesting use case of DAOs, and crypto more broadly, is how they can use tokenization to incentivize positive behaviours and charitable activities. Let’s use a simple example.
Let’s say there is a DAO called Tree DAO that has the simple mission of encouraging individuals to plant trees. Their “TREE” token is used as a way to incentivize tree planting, by rewarding tree planters with a token for every tree they plant. These tokens then give the individuals ownership in the DAO, and the ability to even exchange them for goods and services.
Conclusion
DAOs are in their infancy but have already achieved so much, and there is limitless potential for them to be a true force for social good. The inherent nature of DAOs as open, decentralized, community-based organizations lends perfectly to the social impact sector, where greater emphasis is being placed on the importance of grassroots and community-level decision making, as opposed to the traditional hierarchical structures of charities and non-profits.
DAOs will be a vital part of the social impact ecosystem in the not-so-distant future, and it will be exciting to see the incredible growth that comes in the coming years.
For more videos watch this playlist:
BeesSocialTV
https://www.youtube.com/playlist?list=PLT3ArNsa9k19YcQ8G-2Y6y0fq8OYb5ld5
Please subscribe to this channel:
BeesSocialTV
https://www.youtube.com/channel/UCfQoY9QU7bsgb94NuTf_DwA
For more info:
https://facebook.com/groups/beessocal
https://youtube.com/c/BeesSocialTV
https://BeesSocialTV.com
http://shopbeessocial.com
#CryptoSwarm
#BeesSocial
#BeesSocialTV
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