Decentralised Grant-Giving in the Nonprofit World Part II
The Lien Foundation’s experiment with blockchain-inspired funding models
Part II covers the results. Read Part I to find out why we are doing this.
In July 2023, we conducted our pilot round with the Lien Collaborative on Palliative Care, a training programme across 10 countries run by Asia Pacific Hospice Palliative Care Network. In India, at least 62 institutions had been trained by top Indian doctors and nurses.
The Seed Round
We launched with a modest US$4,000 pool. All hospitals attending the 2023 training in India could apply. We received 7 proposals:
The Zoom Call
We laid out voting rules. Each expert (doctor/nurse) has 10 votes. Quadratic funding (QF) to encourage proposals with wider support. Proposals need a minimum of US$500, to ensure a meaningful amount for implementation
30 minutes was spent discussing proposals with 12 palliative care experts. We started by asking what stood out for them. Discussion flowed freely, centering around 3–4 proposals. We called out the quieter experts. Some experts started to share their votes. After a more senior expert did so, conversation coalesced around 2 proposals.
Experts voted. After tallying the votes, we announced the 2 winners. All votes remained anonymous, a difference from blockchain. Many experts know the proposal teams, we didn’t want that to affect votes.
Results
2 of the 7 proposals won. Proposal A from Rajendra Institute of Medical Sciences took the lion’s share with 69% of the $4,000 pool, while Proposal G from All India Institute of Medical Sciences in Deoghar got 31%. Both are from Jharkhand, a state with 41 million people.
Proposal C saw the most dramatic impact due to QF. It reached the $500 cutoff, but with QF, its portion of the pool dropped from 13% to 5% (yellow highlight). Proposal A’s portion grew from 53% to 69% (orange highlight).
Observations
- Only 2 winners. Because all 12 experts voted for A, this depressed the QF share of other proposals, redistributing funds towards Proposal A. The $500 cutoff also reduced the number of funded projects.
- To QF or not? In a small group, QF possibly amplifies groupthink. We thought QF might cause the spreading of votes but most experts voted for 2 proposals each. Perhaps perceived quality varied greatly.
- What is said vs. what is voted. Proposal G raised several questions, but won many votes. This may indicate that experts spoke to demonstrate their uncertainty, but ultimately credited G’s innovativeness.
- Simple is hard. Even with low-tech, 1 voter did not correctly split votes. Another skipped Google Form to Whatsapp the facilitator.
Retrospective — what worked, what didn’t
We held a retro. Facilitation went mostly well. Making sure everyone got a chance to speak brought out new opinions. Small decisions led to good voter experience. There were 3 areas of improvement
- Diversity in winners: If some proposals receive more airtime, as facilitators, we’d decided not to intervene; it’d be to their credit. But we were surprised discussion narrowed down so quickly. Experts were familiar with proposal teams so perhaps decisions were relatively quick.
- Disclosing votes: Facilitators need to stop experts from sharing votes. Prompts could be less proposal-specific, e.g., how are you deciding?
- Influence of senior experts: We’ll need to extract valuable points from senior experts without directly influencing voting outcomes.
Was it successful? Our goal was for the Lien Collab community to feel that outcomes were motivating, i.e., winners deserved to win. We sought anecdotal feedback. Most were not surprised. “Winning teams were known to be strong” and proposals were “well-thought out” (this isn’t a comprehensive take, obviously), in line with Vitalik’s point that projects chosen by a small group of “technocrats” tend to be of “higher quality”.
What’s next
We conclude the first round of our experiment. Because we had the guts to dabble in this alien blockchain world (during the crypto winter), we’d like to shamelessly declare this a success. But what’s next, and so what?
1) Tweaking the design to diversify outcomes
We‘ll run a US$20,000 round in 2024. One priority would be to optimise for more diverse outcomes. For example, include experts from outside India and give them more power at the ballot box. As for use blockchain tech, what would be the value for our users? Is this the right use case?
2) Decentralised grant-giving (DGG): A new philanthropy tool
An unintended effect was DGG offered many learnings about palliative care in India. As Lien Foundation shifts toward international service development, DGG is valuable: where we lack experience and cannot add value, let experts guide us. DGG lets us fund a host of small projects quickly with relatively low-risk. We are grateful for the accelerated learning.
Resources
Optimism writeups on retroactive public goods funding
The Nobel Committee’s decision making process
Vitalik’s review of optimism round 1
About the writers/facilitators
Samuel He is a visual artist and data analyst. He lectures at the Wee Kim Wee School of Communication and Information. He was a Kernel Fellow (Block V) in 2022.
Luo Ren develops palliative care programmes at the Lien Foundation. In her past life, she was in product management.
