Great question. Often we say DALY averted, but saved works too and maybe is more intuitive.
Yes, to determine the DALYs saved we would need to have an RCT. This would be to establish the methodology. Once the methodology is established then other organizations can apply to have their credits verified under the same methodology. For example, if we show that bednets prevent malaria and thus save DALYs in an RCT then there is no need to have every organization do an RCT, only that they prove how many people are using bednets and the base rate of malaria in the area.
This is excellent. I'm wondering, how has your thinking on this evolved since you wrote it?
I've been tinkering with a similar idea: tradable Impact Credits. The idea is that a big corporation might have an oil spill and want to buy lots of impact today and they are willing to pay top dollar for it and they need it fast. They don't want to fund something that may or may not save 10,000 acres of Amazon forest in 5-10 years. They need verified impact and they need it now. Meanwhile, an angel donor might be rather patient and willing to donate to a cause that he/she believes in but is higher risk. Then if it turns out they were right they can resell the impact to Big Corp at a higher price in the future.
Another way to think about is as a general case of Carbon Credits. Carbon credits are just one area for selling impact. Meanwhile Impact Credits would be used for any kind of impact.
I see a few benefits of impact credits:
Reduced due diligence efforts
Increased urgency for donors to pull the trigger
Continuous funding mechanism for impact orgs
Community Membership for donors
Reduced Due Diligence. The benefit of Impact Credits is that the market sets the value of them. Right now each donor has to do their due diligence but Impact Credits could crowd source due diligence. Further, increasing price indicates underlying belief that the Credit is valuable, further reducing the need for due diligence.
Impact credits also increase urgency for donors. Currently this is a challenge for anyone raising a grant. The donors take 6 to 24 months from the time an organization applies to the time they get cash in the bank. By this time an organization may no longer be able to use the money. Equity investment solves this problem because investors get FOMO and thus tend to act quickly. It might take only a few days to get cash in the bank for a fast growing startup. Impact Credits create more urgency for donors because the market might increase the price of the credits if the donor takes too long to decide.
Continuous funding. Either impact orgs can take a royalty payment or transaction fee everytime the token is traded or they can create new Impact Credits that they can sell, just like when a company creates new shares for sale. This inflates the number of shares so an impact org would only do this if they think it wouldn't depress the price too much.
Community Membership. Donors often give to be part of something bigger than themselves. Why not make that explicit? They get access to a new group of friends and can display their patronage as a profile picture on their social media accounts. Our generation is all about experiences so maybe buying a token entitles the donor to visit the organization once a year or something.
Neither NFTs nor ERC-20 tokens seem like a good fit for this. NFTs would be good for giving donors a profile picture. But if many people want to fund one impact org then ERC-20 tokens would be better suited. Perhaps a new kind of token is required for Impact Credits.
Well, this was the short version of the idea I've been working on. Can you share any updates on your idea? I'd love to know!
Great question. Often we say DALY averted, but saved works too and maybe is more intuitive.
Yes, to determine the DALYs saved we would need to have an RCT. This would be to establish the methodology. Once the methodology is established then other organizations can apply to have their credits verified under the same methodology. For example, if we show that bednets prevent malaria and thus save DALYs in an RCT then there is no need to have every organization do an RCT, only that they prove how many people are using bednets and the base rate of malaria in the area.
Does that help?
Cool. I just minted my Save the Whales NFT on your prototype site. :-)
This is excellent. I'm wondering, how has your thinking on this evolved since you wrote it?
I've been tinkering with a similar idea: tradable Impact Credits. The idea is that a big corporation might have an oil spill and want to buy lots of impact today and they are willing to pay top dollar for it and they need it fast. They don't want to fund something that may or may not save 10,000 acres of Amazon forest in 5-10 years. They need verified impact and they need it now. Meanwhile, an angel donor might be rather patient and willing to donate to a cause that he/she believes in but is higher risk. Then if it turns out they were right they can resell the impact to Big Corp at a higher price in the future.
Another way to think about is as a general case of Carbon Credits. Carbon credits are just one area for selling impact. Meanwhile Impact Credits would be used for any kind of impact.
I see a few benefits of impact credits:
Reduced Due Diligence. The benefit of Impact Credits is that the market sets the value of them. Right now each donor has to do their due diligence but Impact Credits could crowd source due diligence. Further, increasing price indicates underlying belief that the Credit is valuable, further reducing the need for due diligence.
Impact credits also increase urgency for donors. Currently this is a challenge for anyone raising a grant. The donors take 6 to 24 months from the time an organization applies to the time they get cash in the bank. By this time an organization may no longer be able to use the money. Equity investment solves this problem because investors get FOMO and thus tend to act quickly. It might take only a few days to get cash in the bank for a fast growing startup. Impact Credits create more urgency for donors because the market might increase the price of the credits if the donor takes too long to decide.
Continuous funding. Either impact orgs can take a royalty payment or transaction fee everytime the token is traded or they can create new Impact Credits that they can sell, just like when a company creates new shares for sale. This inflates the number of shares so an impact org would only do this if they think it wouldn't depress the price too much.
Community Membership. Donors often give to be part of something bigger than themselves. Why not make that explicit? They get access to a new group of friends and can display their patronage as a profile picture on their social media accounts. Our generation is all about experiences so maybe buying a token entitles the donor to visit the organization once a year or something.
Neither NFTs nor ERC-20 tokens seem like a good fit for this. NFTs would be good for giving donors a profile picture. But if many people want to fund one impact org then ERC-20 tokens would be better suited. Perhaps a new kind of token is required for Impact Credits.
Well, this was the short version of the idea I've been working on. Can you share any updates on your idea? I'd love to know!