5 Non-Profit Mission-Based DAOs
DAOs (Decentralized Autonomous Organizations) are becoming a good alternative for operating digital-native groups, as they provide a unique chance to decentralize the growth and development of societies and companies.
While there are different types of DAOs, philanthropy or non-profit, DAOs have gotten wide-scale attention since the inception of the COVID-19 pandemic. They have remained relevant ever since as the clamor for humanitarian needs thrives.
Generally, decentralized non-profit organizations are created to advance moral obligation by gathering around a common goal to influence the Web3 environment. For instance, a DAO recently raised $3 million for the Ukrainian military.
The idea is straightforward: allow crypto enthusiasts to give to the appropriate charities in a secure environment. This article aims to reveal how non-profit DAO works and the top decentralized charities in the industry.
What Are Non-Profit DAOs
Non-profit DAOs are philanthropic organizations built on blockchain technology for transparency and integrity. These organizations are created to serve a common purpose in the community.
Big Green DAO, for example, is affiliated with Big Green, a nationwide 501(c)(3) food justice organization. The company educates individuals on how to produce food to increase nutrition sufficiency, psychological health, and climate effect.
Like traditional charities, founders of non-profit DAOs and their donors often hold the same values. However, many differences make DAOs a better option than traditional organizations.
Charity organizations are founded by filing papers with a governmental agency, usually in the state department where it is established. As such, its founders are untouchable because of its corporate structure.
When the organization faces legal disputes, the directors, executives, workers, shareholders, and contributors are not personally responsible. Instead, the corporate body is responsible for its obligations.
On the other hand, there is no official statutory body in a mission-based DAO. DAOs are never constituted in any state and are built utilizing the same blockchain technology that underpins the virtual currency environment.
Given the public's lack of faith in charity organizations to get contributions to the proper individuals, such an idea might revolutionize the way people give. Blockchain technology enhances the advantages of a DAO and a charity by adding value, safety, and creativity to give.
How does a Non-Profit DAO Work?
Non-profit mission-driven DAOs operate similarly to other decentralized organizations. When a DAO is first built, its policies are encoded as smart contracts designed to run when specific events occur.
When people invest in the DAO, they commit to following the regulations. Therefore, violating such regulations will result in different consequences, as stated in the smart contracts.
Non-profit DAOs are created in the following steps:
- Develop: Programmers write smart contracts that govern the group's policies and determine its mission. This is followed by intensive testing to make it safe and secure.
- Fund: DAOs rely on pooled cash raised from their founding members. People join the organization if they believe in its objective and agree to acquire a particular number of tokens in return for a stake. This is also the time to set governance norms.
- Launch: The code for the DAO gets put onto the ledger. It can only be amended from now on by stakeholders voting together. The project is no longer under the management of the initial creators.
Tax and Legal Issues Regarding Non-Profit DAOs
Generally, charity organizations are formed according to state or national regulations. However, regulating mission-based DAOs is still under review, as authorities like the Internal Revenue Service and state charity offices have yet to determine decentralized charities' oversight functions.
It's also doubtful if DAOs are sustainable with philanthropic donations due to their very nature. Most crypto donations to charity have supplied capital to qualifying organizations that function similarly to any other traditional non-profit.
Donating cryptocurrencies rather than money is treated like offering up stocks, bonds, or other property for tax reasons. This means that, in most cases, bitcoin donations generate a greater tax advantage than cash gifts.
Now we’ve addressed the fundamentals of non-profit DAOs, let’s take a look at the top five non-profit mission-based DAOs.
1. Klima DAO
Klima DAO was founded to influence the carbon markets. The organization is made up of developers, environmentalists, and entrepreneurs.
After the launch of Klima DAO in 2021, the carbon market has witnessed a huge impact, with the price of renewable carbon credits seeing a rapid increase.
The Klima token value is determined by the amount of the Klima Treasury, based on the value of BCT. BCT is a Toucan Protocol-tokenized legal agreement reflecting VCS-certified assets with a vintage of 2008 or later. At least 1 ton of BCT credits backs each KLIMA token.
How Klima DAO Works
KlimaDAO is creating an open-source, open network that will use Web3 to make a significant and quantifiable difference in the climate. As a growing network, the organization works to coordinate the distribution of climate money to high-impact, approved sustainability initiatives that improve the Earth.
The non-profit industry operates in the Polygon ecosystem. The energy-efficient L2 solution provides carbon balance production with DeFi needs.
How to Join Klima DAO
Users can participate in Klima's carbon market by buying the Klima token, allowing them to vote on Klima DAO policy. Moreso, users, can offset carbon emissions, interact with DeFi applications, and get exposure to the rapidly growing global carbon market. The DAO offers members better ways to earn, including its staking protocol.
KLIMA tokens are minted and distributed automatically every ~7 hours to staked KLIMA holders.
You can purchase from any decentralized exchanges (DEXs) where it is listed. Another way to obtain the token is by bonding carbon assets.
Bonding allows users to deposit their carbon assets for subsidized KLIMA tokens. The Klima treasury uses carbon credits accumulated from bonders to make a positive influence on the environment.
2. Popcorn DAO
Anthony D. Martin and Michael Kisselgof founded Popcorn in early 2021. The organization is aiding a revolutionary shift in global systems through accessible DeFi products that align financial wellbeing with positive global impact.
Generally, all products on Popcorn are designed to fund social impact organizations. In addition, users get a suite of DeFi products to generate competitive returns on their crypto assets.
Popcorn members can support three Initiatives—environmental issues, open-source, and community education.
The project partners with carbon capture and zero-emission initiatives to estimate and offset blockchain greenhouse gas emissions.
How Popcorn Works
Popcorn blockchain allows users to earn on their cryptocurrency assets through automating yield-generating tactics.
The non-profit blockchain organization gives out between 20% to 50% of its revenue to social impact groups. POP holders may only choose the social benefits.
After being accepted through a different voting procedure, The founders may provide a grant to a beneficiary. Successful candidates will include financial or impact data, a goal statement, and evidence of proprietorship via an Ethereum address.
There is a fixed supply of over 99 million POP tokens. However, the supply is expected to reduce due to Popcorn’s smart contract structure.
How to Join Popcorn
Anyone can join Popcoin by holding the Popcorn governance token, POP. Members of the PopcornDAO, or POP token holders, are stewards of Popcorn.
Token holders share a common long-term goal of fueling the growth of the protocol, decentralizing the organization, and nurturing the mission of driving social impact for the public benefit in perpetuity.
Users can participate in the network with the token by running keeper nodes with the token. They are also allowed to vote on proposals that influence the parameters of Popcorn's smart contracts.
Token Holders also can contribute to the ecosystem by voting for non-profits to receive funding. Additionally, yield farming and staking opportunities will also be available for token holders.
3. Code Green
Code Green was founded in late 2021 before the COP26 Global Summit. The founders selected the launching date to engage with key decision-makers on the planet.
The decentralized organization is built to help NFT creatives from all over the world to develop carbon net-neutral NFTs of their art. Such art can range from music to memes and everything in between, harnessing the power of the blockchain to heal the Earth.
Another purpose of Code Green is to focus on empowering marginalized groups. They also support communities where the impacts of climate change are already happening.
Individuals threatened with being displaced from their homes are equally part of Code Green's focus. They champion people-powered social & climate solutions, driven by local visionaries rather than big international organizations.
Code Green aims to disrupt current aid financing models by decentralizing the availability of finance to local community-based frontline organizations and social entrepreneurs who are deeply rooted in the communities they serve.
The project organizes auctions and awareness activities at high-level IRL events, sharing the proceeds between the artists we collaborate with and social climate projects making a tangible difference to communities living on the frontline of this existential emergency.
How Code Green Works
The organization raises funds for the most impactful climate projects by hosting dedicated NFT auctions at high-level events on the international calendar.
With the main focus on NFT creators, Code Green advises artists on maximizing their sustainability in the NFT space. Informational materials on how best they can 'give back to the planet by connecting them with verified social & climate solutions.
Setting up international global events is part of Code Green's functions. This way, they can launch open calls for emerging creatives and artists from across the globe to showcase their talents.
Code Green aims to generate endowment funds to protect community-driven climate solutions and green projects on the frontline of climate change.
How to Join Code Green
Although the organization does not have a governance token, anyone who cares about planet earth's wellbeing can become a member.
NFT creators and collectors with the community to harness the power of blockchain for social good. You can join the community on Discord or send a message through the Contact Us tab on the website.
4. Regen Network
The goal at Regen Network is to build foundational fintech infrastructure for ecological claims and data. Regen Network incentivizes regenerative land-use practices, restores ecosystems, and reverses climate change.
Broken economic models incentivize land degradation, destroy ecosystems, and fuel climate change. The group intends to produce new tools for how mankind interacts with its environment using a blockchain system and sophisticated remote sensing technologies.
Regen Network is building an on-chain registry system for carbon claims and integrating data into the marketplace with Regen Registry. The blockchain should be brought as close to the claims process as possible to keep track of the data and methodology involved in the claims process.
How Regen Network Works
Regen Registry allows land stewards to sell their ecosystem services directly to buyers worldwide. Ecosystem services benefit people from healthy ecosystems, including clean air and water, resilient food systems, and mitigation of extreme climate events.
Under the hood of Regen Registry is a decentralized, public ledger that its users govern. This public blockchain, called Regen Ledger, sits alongside a set of open protocols and tools that we build with a wide set of co-creators.
Built on a proof-of-stake (PoS) Blockchain, Regen Ledger enables multiple registries to communicate and transact, producing a public ecological accounting system. Three important groups of engaged super users will regenerate Planet Earth with their powers combined.
How to Join Regen Network
According to its founders, those who need Regen Network include all farmers worldwide and government agencies who need to support their land management programs. In addition, non-profit organizations that spend billions of dollars on ecological projects also need the data available on the Regen Network.
Researchers will also have access to a global incentivized peer-to-peer ecological data market. On the other hand, companies can use the platform to fund their supply chain security, minimize environmental deterioration, or practice CSR (Corporate Social Responsibility).
Validators manage the servers that protect the blockchain. They also make profits and block incentives while ensuring reliability, availability, and safety for Regen Ledger clients. As an active $REGEN token holder, one of the most important duties is participating in governance and voting on blockchain updates.
5. Angel Protocol
Angel Protocol officially launched in 2021. The global social organization operates on the Terra blockchain that leverages decentralized finance (DeFi) to create perpetual endowments for charities
As a non-profit DAOs, Angel Protocol empowers other charitable organizations to create non-custodial endowments by connecting them with more donors and providing a more reliable income stream.
All payments go to their Angel Protocol account. Following that, it’s invested automatically in minimal-risk, high-yielding commodities enabled by distributed ledgers.
A portion of the money from those DeFi items is paid to charity every week, and the balance is continuously reinvested, accumulating in eternity.
How Angel Protocol Works
To be featured on the fundraising marketplace, charities must first register. Every charity is assigned to one or more of the SDGs.
Donors who want to make a long-term difference may choose a single organization or a group of charities to support. They can decide whether a certain percentage of their donations goes to the charity's endowment or an account they can access.
Charity endowments have a high rate of return. A part of the fund is transferred to the charity's liquid account every month for prompt use.
Angel Protocol donations presently provide a 15 per cent annual return for partner non-profits. The organization is established to provide financial independence to charity.
How to Join Angel Protocol
You can join Angel Protocol by buying its governance token, $HALO. As a $HALO holder, you have a voice and ownership in the DAO, shaping what will become the world's largest, most effective community-owned charity.
$HALO stakeholders play a critical role in identifying which charities will be included in indexes and receive automated donations. They also signal support and increase a charity's visibility within the Charity Marketplace.
Thus, it’s fair to say that staking $HALO carries great power and great responsibility. Angel Protocol has received more than $425,000 in donations to date.
Donations have come from members of the Angel Alliance, a collective of businesses, protocols, NFT projects, and validators who have joined in a charitable giving pledge (as well as individuals who have donated independently).
DAOs are becoming more and more crucial in developing crypto and Web3. The sole concern with non-profit DAOs is volatility, which concerns all virtual currencies.
The general market capitalization of cryptocurrencies fell to $1.6 trillion in Feb 2022, from $2.85 trillion three months earlier.
This is why non-profit DAOs may have to exchange these contributions into fiat currency right away, similar to how they do with donated equities or retain them until they reach their full worth.
Non-profit DAOs, of course, confront operational, economic, and legal challenges. However, the possibility for great transparency combined with minimal costs still presents numerous chances for crowd-managed organizations financed by cryptocurrency payments.