Crypto Social Responsibility: Bitcoin-backed special funding vehicles for social purpose initiatives

This post is the most recent chapter of a story that began in the early 2010s, when Dyne.org was awarded the first EU-funded research grant on Bitcoin and Blockchain technology for digital social innovation. That work eventually resulted in the Social Wallet API, a Blockchain-agnostic wallet for digital credit.

In the 2020s, our thinking in this space evolved to consider opportunities for Bitcoin-enabled participatory grantmaking, where we conceptualised the Whales to the Rescue crypto-charity mechanism.The idea behind it emerged through conversations between Jaromil, Radium and anique at the intersection of performative art, social purpose Fintech innovations and software development for the social good.

Bitcoin was created as a non-government issued currency that should provide, and in part has provided through successful circular economies, an alternative to the fairly broken fiat money system. From its inception, Bitcoin and charity have been keeping each other company, for example during Operation Payback.

As the years have passed, Bitcoin has increasingly been integrated into the conventional monetary and financial infrastructure. As the best performing asset in history, crypto is first and foremost Bitcoin. Consequently, its impact through financialisation is growing steadily, poised to become a widespread standard of value.

In this context, we envision new approaches for justice-informed wealth redistribution that build on the private sector's engagement in social purpose initiatives like Corporate Social Responsibility. Therefore,we want to design new Bitcoin-backed special purpose vehicles that work across the spectrum of philanthropic and impact funding. We do so aligned with the #ShiftThePower movement and by taking stock of what Joseph Stiglitz and his team showed recently in their report for the G20 on how to move the world beyond inequality and towards “common prosperity.”

So we think it's time to re-imagine what it means to shift from Corporate to Crypto Social Responsibility, not through opposition but as a series of Aikido-like moves that leverage the energy of financial capitalism to re-direct it towards those who can benefit the most.

The idea behind Crypto Social Responsibility (ČSR) has evolved as we've been thinking about how to create a resilient business model for our social-purpose organisation, Rinfresca. Rinfresca offers co-designed well-being, capacity building and self-advocacy programs for families with intellectual disability, like our own. We've been wanting to implement a business model that can scale through diverse revenue streams while also ensuring accessibility for lower-income clients.

And so the following four initial special purpose vehicles have emerged to begin mapping the ČSR territory. From the least to the most financialised, they demonstrate where Bitcoin could be leveraged as a source of working capital that supports social purpose initiatives. We will unpack each vehicle in a standalone post that details its mechanics and potential impact:

1. Whales to the Rescue

As per the vehicle outlined in our former post, Whales to the Rescue, through a co-designed funding strategy a Bitcoin whale allocates BTC proceedings to support a social-purpose organisation and their beneficiaries.

2. PoS Round Up

Building on the success of Point-of-Sale fundraising, customers of retailers where one can pay in Bitcoin - from South Africa, El Salvador to the USA and Switzerland - can round up their purchase to the next fraction of BTC measured in sats, which would then be allocated to a ČSR community partner.

3. CEX Fractional Tx-fee

Another of Corporate Social Responsibility's greatest successes is Payroll Giving, where companies engage a workplace giving software in order to automatically deduct a percentage of participating employees' salary as a charitable donation. In the ČSR case, social-purpose organisations can partner with Centralised Exchanges to develop rules where a fraction of transaction fees is donated to a selected ČSR campaign. DEXs could also be partners.

4. BTC Treasury Perpetual Dividend

Apart from putting BTC on a company's balance sheet through differently blended finance solutions, social-purpose organisations can raise fiat money and invest directly in BTC treasury companies, where they allocate either part or the full dividend amount to perpetually fund their social-purpose services with products like Michael Saylor's $STRC.

Practicing the Art of Unix Programming, we want to code reusable software modules that process and allocate funds to recipients of Crypto Social Responsibility initiatives.

We are now proving the ČSR concept with the case of Rinfresca, and intend to share best practices in order to support it becoming a successful funding model for any purpose-driven initiative with positive social, environmental and/or economic impact.

We want to build a proof-of-concept for each vehicle: participatory grantmaking BTC allocations by whales; round up fundraising by retailers; fractional fee-giving by centralised or decentralised exchanges; and dividend distributions by BTC treasury companies to ČSR social purpose initiatives.

So we're on the lookout for partners who want to join us in creating positive externalities in areas of general, public interest.

Are you a BTC exchange? A BTC treasury? A social impact investor? A retailer that accepts Bitcoin? Or perhaps you're hodling but have that feeling that you'd like to do something worthwhile with what you hodl without losing its value?

If you're ready to be a part of an unprecedented exploration in the positive impact Bitcoin can have on society at large, or if you simply want to know more, let us know with the button bellow, and join forces with us!