Tracking Real-World Impact In Grant Programs - Bangkok 2024

[Music] all right well super excited to be here uh there was an awesome panel just now I'm very inspired to be honest like I'm here um just to like really uh I guess further some of the thoughts around the real world impact and how uh you know how this can actually Bridge into what we think about with web 3 Grand programs um going next slide um just in case if you didn't catch it during the last panel here some quick explanations just to give some context of some of the use cases I will dive into today so Stellar it's an open source uh decentralized layer one blockchain network built for everyday financial services and and products with over 15 billion operations and 9 million accounts in launch Stellar Powers a global network uh and ecosystem of hundreds of thriving businesses um its development is led by the Stellar development foundation a nonprofit founded in 2014 with the mission to create Equitable access to the global Financial system um at the foundation my team I believe like I think Elizabeth will come later on as well who is on my team uh we managed a stellar Community Fund which is an open application grants program that leverages Community input for project support and funding allocation since 2019 the fund has allocated over 34 million in xlm which is Stellar's native currency uh to over 500 projects uh ranging from applications to infrastructure to financial protocols and de tooling um these are some high level output metrics they don't say anything about the ROI or what kind of impact these uh projects have made but it's the founders unwavering efforts and real world impact that uh to further Financial inclusion that has kept me at the foundation for nearly 5 years and gets my team U me and my team and I out of uh bed in the to work at at the foundation every day so yeah let give you an idea hopefully the video will work of what kind of impact I am talking about and I'll walk you through one the funded projects called decaf from the lens of one of their end users um meet Zach Zach is an entrepreneur who conducts business in San Francisco now not San Francisco in California but San Francisco a rural town in Colombia without basic uh Financial infrastructure such as banking he set up a school for digital skills in two businesses one of which is virtual Assistance Center uh with new opportunities in towns locals such as uh Iana weren't forced to leave and could actually find work in town in a place that they call home but there was one problem how to pay his employees in a country with with strict Financial controls and in a town where no one has a bank account the solution that I found was just to withdraw cash from ATMs so I've gone and gotten a bunch of debit cards and I've just spent my day going around the city from bank to bank the bank making withdrawals in cash I had special clothing constructed so I had a jacket and jeans with little pockets in them throughout the day I would just have to collect money in a non-suspicious way and then I'd get on my motorbike and I'd ride out to the Village so that I could pay everybody's salaries so you're rting a motorcycle through Royal Columbia with months of people's salary in your pockets two weeks to a month I'm not stupid weeks I might be a bit casual with all of this but I'm not a fool I have all the protocols like Jeep is bulletproofed I never go to the same bank twice but even if you've got every plan in the world even if you set everything up the the problem is is that at the end of the day you've got a bag of cash all right well that was quite funny you think but actually on October 30th um Zach got robbed and shot while collecting cash in medine so he nearly died he went into a coma and he woke up after 3 days now I never met a person like with a higher risk tolerance than Zach he's he's quite amazing but at this point the risk was simply too high to continue to operate the same way and Zach considered quitting altogether that's until he met Rick one of the co-founders of decaf you know how do I pay these people when we're just sort of brainstorming and I happened to be working in a space that happened to have a really perfectly good solution for this that solution is called decaf a decentralized payment app co-founded by Rick the app allows people without bank accounts to send and receive cryptocurrencies in Zach's case he pays them in digital US dollars when they want to they can go into town and convert the money into local Colombian pesos it's no coincidence that Decap is so perfectly suited for Zach's problem the app's co-founder Fernanda orun ganel comes from a town in Mexico just like San Francisco [Music] there are hardly any fees for converting crypto to cash and the whole process happens through money ground but wait but wait indeed let's first hear from Juliana who works as a virtual assistant e [Music] this renewed access to financial services unlocked unforeseen real world impact on the town's economic opportunity well-being and even education for the future generation so going back to the topic of this talk right the type of Impact May differ from the impact uh that you've just seen May differ from the impact that you're talking about in your grand program and that's why I'd like to start by categorizing impact in three dimensions one um the impact of the grant funding and support has on the project itself so think grants providing the ability to build new products or services or conduct daily operations expander team like conduct marketing raise funds Etc so in the case of decaf they were able to build out their integration with stellar and MoneyGram uh with the grand funding received two um what impact the output of the project has on the ecosystem and so this is related to like internal ecosystem Health metrics such as active accounts like transaction volume tvl functionality uh Etc so in the de example the integration with MoneyGram allowed uh for uh brought another wallet using this critical on and off RM which enhances the ecosystems functionality and reach three uh what imput impact the output of the project has uh supported by the ecosystems health and functionality on the real world in relation to Global issues on like social economic uh environmental issues for instance so in df's case like uh the integration with moneyam unlocked the ability to do business in a town hisor Ally excluded from the financial system leading to New Economic Opportunity so there is already uh this going back there are many Grand programs who measure project in ecosystem impact to some extent right um we supported by tooling such as karma Gap metric Garden open source Observer hypers searge and Thrive protocol however um measuring these real world impacts in the web through Grand space has yet to be solved uh for several reasons one it's pretty hard as you might have noticed from a previous panel uh real world metrics are difficult to verify and compare to one another there's a lot of and in Grand programs there's a lot of different types of projects there's even a you know even in a single app like decaf has a number of different use cases and that impact different situations and different geographies and audiences it's also hard to create a good Baseline as available research may be outdated or not aligned with what they're looking for and two uh unlike the stive development foundation whose mission it is to create Equitable access to the Global Financial system many Grant programs and or foundations May historically not have outcomes related to real world impact um and or and as such do have an ability incentive or priority to do so but there's change happening um many Grand programs are maturing and actually uh supporting the development of long-term impactful projects in their ecosystem so over the last year there have been an increasing amount of of uh like conversations as also about impact measurements in the space like medov is one of the organizations that leads it and there there have been an increasing amount of conversations and when I looked at the schedule this morning uh I was excited to see not one but like seven or eight sessions related to real world impact which is a super exciting development you bet I'll attend all of them so why measure real world impact if I didn't have you at the Decap video um for obvious reasons um there's also some other reasons why we are interested um more impact and higher Grant arei in the wrong term wait a minute how can like measuring impact lead to more impact well actually by requiring projects to measure impact early they can pivot quickly if results don't align with the goals ensuring resources are focused and purposeful with high Roi initiatives second one is adoption and policy demonstrating real world benefits of blockchain strengthens our position for ADV advocating for reasonable regulations and Broad adoption this is something we learned also in sdf's work to support policy issue efforts so the third one is tap into like uh especially like non web 3 like impact investing opportunities uh verifiable alignment with um goals such as the UN SGS can attract nonwe 3 impact investors expanding funding resources and amplifying positive change driven by blockchain projects and lastly um by uh it can also unlock new governance opportunities within Grant programs um within the Estella Community Fund we leverage something called neor governance and we where we can adjust voting power uh based on like a Project's proven impact creating a feedback loop that rewards impactful decisions uh with greater governance uh influence all right so in much of the research that I've read and conversations I've had with people such as guip which also happens to be a sell Community Fund Award winner by the way um uh on impact measurement the secret sauce or maybe not so Secret Sauce lies in leveraging theories of change now the theory of change is a strategic framework that Maps the path from inputs to long-term impact ensuring that every step in the process aligns with the desired Mission so with three Grant programs the framework can help awarded projects as well as the grant program itself to visualize the change they aim to create ensuring resources are effectively used and project projects remain focused on actionable and measurable outcomes so by breaking down the projects like into clear stages uh inputs activities outputs and outcomes it helps identify early on whether a project is on the right track to deliver its intended impact allowing for timely pivots if needed most grand submitters will say and I'm sure some of you will agree with me uh I need X doll usually the maximum amount that the grand program can provide to do X that will result in Z and that is even they add the last part right but theories of change are actually created inverse to create a theory of change you start with outlining the desired outcome powered by the relevant outcome metrics to what extent you'd like the current situation to see changed and this means you'll need to conduct research to understand what the Baseline is uh and what variables have historically um impacted this Baseline then Define uh the uh tangible results and outputs that you need to produce in order to achieve the outcomes and third what activities you'll need to do to undertake uh in order to get the outputs and finally what inputs or resources invested you will need to be able to conduct the activities which can include funding development time Partnerships time BD Etc um so if your also grant program has outcomes related to a larger Mission uh or like to drive systemic kind of long lasting uh real world change we also recommend to add a long-term impact section as well and these long-term impact sessions can possibly be related to U Global Mission goals such as the uh un SGS or the esds um the um the first one here uh launched by the United Nations in 2015 is a global cult action uh to achieve 17 specific goals by 2030 addresses challenges such as poverty inequality or climate change and education also this is 2030 it gives us less than or a little bit over 5 years to solve all the world's problems so we'll better get on it we got this right there's other goals as well such as dgs hey with blockchain we can do it y' um such as originated in the kind of investment and corporate sectors to really help evaluating company longterm uh sustainability and impact into environmental social and uh governance so for instance like um like a long-term impact uh goal related to financial inclusion can be a key driver of multiple SGS such as solving for like poverty or for Hunger or health education Etc oh you're taking a there also I actually have a don't uh if you don't have time to take a picture I do have some resources at the end no worse um there's also like several impact measurement standards and Frameworks that you can use such as the sroi uh which converts social and environmental benefits into Financial value showing the return for every dollar invested um there's also the iris plus metric from G the global impact investing Network which provides a set of standardized metrics for impact investment I've actually been playing around quite a bit with this one as it allows you to create a framework for your desired outcomes um there's also like country specific indicators such as the the ones that I have here for the US uh that focus on specific social and economic indicators such as poverty reduction Financial inclusion or uh economic devel velopment all right I feel like I'm a bit on time here so I'm going to move to the next slide to see um to introduce you to a company called um click PAC of De fund and one of their customers and how it impacted them so I can actually show you how a theory of change could work with a uh with a use case no I guess not all right he can we play it okay all [Music] right we might have to skip to the next one for time sake uh you know like I have a very nice video which is linked in the resources um but it actually goes into a company called click Pasa and a use case on micro Finance more than 95 uh % of the businesses in Tanzania are small or medium Enterprises and as or smmes for short and these contribute to about onethird of the country's GDP and generate up to 40% of total employment however there is a significant funding gap for smmes uh particularly women-owned businesses of the 3 to 5 million smmes in Tanzania it's uh estimated to for 70% to not have access to formal credit and this is like for a bank account this does not include credit of friends and family but the formal credit that a normal business can uh can acquire um so click PESA actually aims to bridge this Gap by leveraging sellers advention functionality to manage Financial Services uh and recently adopted the ability to leverage a def5 protocol on Stellar to connect lenders and borrowers directly um and I kind of wanted to walk you through a preliminary kind of use case that I put together um on the theory of change for for this particular use case again it's very basic and you know kind of like can go in many more uh different levels but it kind of gives you an idea right so let's say here the outcome is cu like we're starting from outcome to inputs the outcome actually is that um they want to see an increase in let's say Tanzanian and FGM um accessing affordable credit right and so then they have to figure out well what do we need to do for that so they came up with a solution to actually disperse a usdc on Stellar to uh four mfis which Empower about which have over the past I guess the pilot period which was from March 2023 to 2024 uh empowered 1,800 um small median businesses with 250,000 usdc to predominantly women-owned uh businesses and this actually has gone through a few different loan Cycles as well and the activities to do so was to create critical products and services to be able to uh support that dispersement as well as research and evaluation of over 700 MF mfis in the region with the detailed analysis of the top 100 and then the actual input was $125,000 in Grand funding to actually create the digital uh to created products and services as well as $90,000 of their own loan Capital allocated and time and team effort um and so their long-term goal of the outcome kind of what they're focused on um can be directly contributed to the to like um several of the stgs I know that and I created 0.0 like 6% based of the base there again like these are some of the very limited Baseline metrics that we have but it does give you kind of an idea how to think about creating a theory for change um and it's exciting too because in the next uh because in the next uh round they will actually use defi on Stellar so you can actually as an individual investor um put in funding to support smmes directly now some of the next steps because I only have a minute um we're we're looking to actually further some of the research around this and um expand this exercise interactively with award recipients of the ne of this year and publish it into a report sometime in early 2025 and to be able to actually um measure uh proactively measure we're looking to create a holistic uh framework uh and Empower projects to create effective theories of change for their own use cases as well as incentivize these activities retroactively since it does cost a lot of time and and effort to do so so very excited for the next year um again I will say this isn't something that we'd like to do in Silo so we'd love to collaborate with aligned partners and anyone else who is really interested to could to um to also like join us in this research and activities so thanks again uh yeah here's also a QR code for some resources [Music]