Crypto Philanthropy meets Quadratic Funding in new Endaoment-Gitcoin Partnership
Crypto Philanthropy is one of the most exciting developments to emerge in the “tech-for-good” world in recent years, with thousands of nonprofits signing up to receive crypto donations including big names like UNICEF, the American Cancer Society, and Save the Children.
Endaoment, the first on-chain 501(c)(3), has long been viewed as a leader in the crypto philanthropy movement, and to date, has facilitated over $50M USD in crypto donations and onboarded nearly 8,000 nonprofit organizations to their platform. Beyond facilitating crypto donations, Endaoment has consistently introduced new innovations to the space, pushing the crypto philanthropy ecosystem to new levels.
This includes the launch of three new developer tools in March 2023 to facilitate flexible crypto philanthropy, including a software development kit (SDK), application programming interface (API) endpoint, and queryable subgraph. These tools provide rich data and access to Endaoment’s digital rolodex of thousands of nonprofit Ethereum addresses and community funds, creating an easy pathway for developers to integrate infrastructure for donating crypto assets to nonprofits from within their project or protocol.
Fast forward to May 2023, and Endaoment announced that it has partnered with GlobalGiving, “the #1 provider of due diligence for international grant-making,” to onboard their 4,200+ nonprofits to Web3, helping amplify the philanthropic impact of the Web3 community.
Introducing the Universal Impact Pool
Just a couple of months later, On June 30, 2023, Endaoment announced the unveiling of the first “Universal Impact Pool” (UIP), an innovative new fund which makes use of Gitcoin’s Quadratic Funding mechanism to distribute matching donations to nonprofits who receive donations or grants on Endaoment.
“Quadratic Funding is a new, special kind of matching mechanism,” according to Robbie Heeger, CEO and President of Endaoment. “Quadratic Funding is unique because it not only looks at how much has been donated to a recipient, but it also takes into account how many individual donors have supported that recipient. The matching calculation will favor recipients who have more individual donors over those that have a single or fewer donors. This means the broader the support an organization fields, the more matching dollars it's entitled to. Cool, right?”
What in the world is Quadratic Funding?
According to Gitcoin, Quadratic Funding is “the mathematically optimal way to fund public goods in a democratic community”. Their innovative algorithm amplifies the impact of smaller donors, making sure that they have a voice in how community funds are distributed, while ensuring the projects with the most widespread support get the funding they deserve. Check out our blog post on how Quadratic Funding will revolutionize crowdfunding for more information on the exciting potential of this innovation.
For a 60 second introduction to quadratic funding, we recommend checking out this video from the Gitcoin team:
Quadratic Funding flips the concept of matching funds on its head. While matching funds have long been used as a tool to incentivize donor contributions, they have often relied on a 1:1 matching ratio, meaning that each dollar donated was matched by one dollar in matching funds, typically from a corporate sponsor. This traditional matching mechanism inflated the impact of wealthier donors, who were able to make larger individual contributions, and thus, secure larger matching funds. Using Gitcoin’s Quadratic Funding mechanism, however, the UIP aims to democratize philanthropy by attributing greater value to the number of contributions a nonprofit organization receives, rather than the total dollar amount.
“Matching funds are one of the best ways to encourage people to give,” explains Heeger. “Whether it's an NPR pledge drive, or a celebrity campaign, or an internal corporate program offering to match gifts, nonprofits know that matching gifts can be the extra incentive to push people to donate.”
Endaoment’s Universal Impact Pool (UIP) Dashboard shows real-time data on donations received, grants made, recipient organizations, and the countdown until the next Quadratic Funding distribution.
Thanks to Endaoment supporters and Gitcoin corporate partners, the UIP will launch with an initial matching pool of $200,000 USD. Each quarter, 25% of the matching pool will be distributed to nonprofits on Endaoment’s platform, based on new calculations using the Quadratic Funding algorithm. This will ensure the distributions stay up to date with Endaoment’s current giving trends.
“The Universal Impact Pool is a fantastic example of what is possible with the composability of web3 protocols.” said Zakk of Gitcoin. “This integration with Endaoment is living up to the promise of web3 and I hope it incentives even more crypto-based donations.”
To learn more about the Universal Impact Pool, see real time data on the fund, and make your first contribution, head to https://app.endaoment.org/universal.
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