# Use-Credits and investment *or, How to use fiat currency to build capacity in a non-extractive manner* [Chris Cook](https://nondominium.co.uk/) & [Dil Green](https://www.linkedin.com/in/dilgreen/) March 2020 License: [CC BY-ND](https://creativecommons.org/licenses/by-nd/4.0/) ### Overview Social Enterprises providing value can receive investment without taking on debt or paying returns in cash. This paper shows how 'use-credits' manage risk at every stage. We illustrate, through a simple example, how an issue of 'use-credits' (*more technically, 'Use Credit Obligations' or UCO*) in return for money for investment in capacity can be beneficial for all stakeholders around the issuer's purpose. ### Context - an example of a typical problem A community kitchen that delivers ready meals to housebound people has been asked to increase capacity by the Local Authority (LA) to help meet their new requirement to support 'Shield' category individuals in the Covid-19 crisis. They have a block, though, which is that they need a new fridge; this will cost £1k, which they don't have (they also can't borrow any more in time to meet the LA's decision date, even if they wanted to). They ask their funders for a pump-priming loan or grant, but the fund is swamped by other requests to be evaluated. Everyone's in crisis. *No new capacity. Opportunity missed. Needy clients not serviced. No new impact.* ### The Use Credit solution Instead of asking for a loan or a grant, they offer the fund a deal: 250 ready meal vouchers in return for £1k (the kitchen produces meals at a cost of £4). *These vouchers are what we call 'use-credits', or 'UCO'.* Ready meals cost £5 - so this represents a 25% RoI on paper. The fund knows the kitchen, and believes in their ability to make good on the increased capacity. So the deal goes to the front of the queue, as it comes with a clear and believable RoI. Of course, there are conditions on the redemption of the vouchers, but they are simple: max 50 tokens per month to be redeemed, the first redemption 3 months after the fridge is commissioned. The fund knows the LA, and can verify that the kitchen is sure to get the contract if they can deliver. They also get the LA to agree that it will buy the tokens if the price is right. The fund's investors like this model when compared to the usual 'pump-priming' justification, which has only loosely measurable impact and feedback - they like the idea that outcome gets measured precisely both in financial terms and in terms of meals delivered - so the deal is made. The kitchen takes on an enhanced supply contract from the LA, and the fridge is installed. The fund verifies that new fridge is enabling increased supply a few weeks after delivery - the investment has been de-risked. At this point, the fund decides to sell the vouchers to the LA - well in advance of the 3 month maturation date. The LA's contract with the kitchen pays £4.50 per meal. The LA agrees to buy the vouchers (with their £5 face value) for £4.25 each, as it can easily verify that the kitchen now has the capacity to serve them. ### Outcomes The fund gets a 6.25% RoI in a turnaround time of six weeks, and can use the cash to help other clients. For the kitchen, the pump-priming was effectively an interest-free loan (£4 x 250) with no hassle, and is paid off in just over 8 months. The fridge increased their capacity by 100 meals / month, and the demand is there - so they increase their turnover in those 8 months by £2750 (800-250 meals x £5), and in each month from then on by £500. The LA saves 5.5% on the delivery of 250 meals and, more critically, makes significant progress towards its imposed targets. It also gains a little bit of forward planning security, as it knows how it will pay for 50 meals a month for 5 months. The investors see reports with measured additional impact (funds effectively applied, cash available for re-investment, meals delivered). Needy housebound people get meals they would not otherwise have got, at decreased cost to the state. Everybody gets what they want, everyone is better off in cash terms, risk was minimal, opportunity costs were low. The next time the kitchen comes back with a similar proposition (say for a more significant capacity increase - or for a new enterprise that bakes bread), everyone is more willing to take it seriously. ### Key Takeaway The RoI for the fund was not obtained from the needy clients, or from the kitchen - but from the LA - another funder - who critically also received an RoI. The capacity *and* throughput of the social impact economy has been enhanced through a viable fiat investment that has taken nothing out of the sector it was designed to support. #### Reference [Introducing the ECO - Chris Cook](https://bellacaledonia.org.uk/2018/08/21/energising-scotland-introducing-the-eco/)
Last changed by  
 
Dil Green
571

Read more

LocalLoop Merseyside - Overview

Feature:

12/4/2023
Lonesome No More - a Generative Identity Instance - paper outline

'Lonesome No More' is the campaign slogan of the protagonist of Kurt Vonnegut's book 'Slapstick' as he runs to become President of the USA. He passes a law which gives every US Citizen a new middle name, comprising a flower name and a number (such as 'Daffodil-8'). In this way, every citizen acquires a set of ~10k brothers and sisters, and 100k cousins (Daffodils with other number suffixes). since these families are assigned at random, these new families cut across all divides. Last edited June 2023 (significant changes from Jun 2020 version) Intent Set out the scope and themes of a paper proposing the mvp for a generative identity scheme in which asserted membership of a variety of groups is the core mechanism for establishing trust in a message provenance address as being controlled by a specific Agent. Context The next phase of civilisation requires a relocalisation - an emphasis on Agents (mostly humans, but possibly bots, too) as members of several more-or-less well-defined groups, rather than rootless, atomised individuals, only defined by nation-states. However, it must be accepted that reversion to historical group modalities cannot succeed. Capitalism is not the sole driver of atomisation - it has also resulted from people 'voting with their feet' - deliberately relinquishing the prescribed sociality of historical in-groups in order to be able to express themselves more fluidly, with more variety. Far from seeing this fluidity and variety as symptoms of 'social breakdown', this paper is based in the assertion that it is through the increased diversity that they support that civilisation can evolve to the required next stage, where with and through increasingly purposive consciousness, we increasingly take charge of our own evolutionary path (for good or ill).

6/11/2023
Brixton Mint CCF Bid timeline

Brixton Mint CCF Bid Phase1 Project Timeline gantt title Brixton Mint Phase 1 - Sep '22 - Jan '23 dateFormat YY-MM-DD axisFormat %W-'%y Project start : milestone, mile1, 22-09-01,0.1d section Engagement Engagement Strategy : strategy, after mile1,5d

6/22/2022
Colabora outline

To build an open, federated marketplace for collaborations; a social technology supported by digital tooling, a global community and a world-wide movement of local events. A kickstarter-meets-angellist for the new economy. A place where a person with a purpose can search and find valuable collaborators to make a shared dream a reality. They can form a crew, organise the collaboration, make good agreements, and work in concert towards shared goals. A system enabling crews to find each other and discover purposes, projects and teams to support through easy to use software tools based around open protocols. A software system and movement of local events enabling incentivised curation of people, crews and projects. A system for effective social discovery based on data sovereignty, open protocols and open software.

5/16/2021
Read more from Dil Green
Published on HackMD