##### tags: `hypercerts` `proposal` `request` `report_investment` `ATT:GC="grant committe"`
# Research on Donation Acknowledgement ~~Receipt~~ Issuance
> [!Tip]
> Moved links to bottom so TL;DR can be at top for time-scarce voters. Elsewhere I suggested a 3x3 matrix {invest,sponsor,spend} x {event, proj, report} @ERLabYTUSzyKmy-SFjjXcA
## Summary (TL;DR)
<details><summary><a href="https://gitcoindonordata.xyz/projects/lexdao/rounds/28">GG20</a> got <a href="https://hypercerts.org/">hypercert</a> grant funds seeking matching R&DD (market scoping) of $1k</summary><br>
LexDAO has participated in several QF grant rounds and other open/participatory grant programs, in the spirit of promoting law as a public good.
Some of these programs have rules (e.g. Gitcoin) about "quid pro quo" practices, prohibiting grantee projects from rewarding their donors. However, non-financial acknowledgment of donations tends to be fair game.
Where permissible, LexDAO may wish to issue notes of acknowledgment (aka donation receipts) to donors/grantors. This practice may involve certain requirements if/when LexDAO or any participating LexDAO-adjacent entity obtains tax-exempt status from the IRS.
Aside from these potential requirements, the issuance of donation receipts may prove useful in terms of accounting purposes, and in terms of building out onchain networks of trust and association. If donors were to receive non-transferable donation receipts, these receipts could serve to enrich said donors' onchain reputations within the onchain philanthropic ecosystem, and could also help LexDAO quantify and evaluate its supporter base.
</details>
> [!Important]
> Please following OS handbook template(elsewhere) for consistent information presentation to reduce friction when voting
## Squad~~b~~
| Who | Role | Notes |
|--------|-|---------|
| @clinamenic | Seeker | _put hand up_ |
| /tba @taxPanda / | Sponsor | most relevant experience? /tba will ask/ |
| /tbc LexDAO LLC / | Steward | potential use case as fiscal [sponsorship](https://propelnonprofits.org/resources/a-boards-guide-to-fiscal-sponsorship/) |
| @drllau | FYI | to be kept aware of progress as reactivating LexDAO LLC |
> [!Warning]
> Clarify whether LLC rather than Spenser as individual can be recipient
## Problem - Techpush, not Marketpull
Hypercerts appear to be a solution looking for product-market fit. First discussed in 2023, there is no apparent actual usage (at least not depicted on website).
> hypercert is a public claim on a discrete piece of work and impact resulting from that work. Projects can create hypercerts and distribute them to contributors.
So theoretically the flow of $$$ from grantors to end-recipients is conceptually matched by information (embodied in the hypercert) flowing in reverse direction. Currently postulated for DeSci, RegenFi, etc but apparently not widely deployed /tbc/. If it traverses the R&D stage, LexDAO LLC will deploy (betatest) for documentating program related investment (PRI) for [L3C](https://en.m.wikipedia.org/wiki/Low-profit_limited_liability_company)
## Flow of Funds /tbd/
```mermaid
flowchart
GG20(("Gitcoin"))
GG20-->|$$$|LexDAO
GC{"GC"}--->|$100 + 3xW4M|project("this R&D project")
LexDAO-->|Spencer as sponsor|project
project-.->|failure|write("Write article
explaining flaw")
project-.->|success|Deployment("deployment
options")
Deployment-->Decide{"branding"}
LLC-->|2.5% royalty ~$3.5k|clinamenic["Clinamenic LLC"]
LLC[["Lex DAO LLC"]]-.->|fiscal sponsorship reporting|GG20
Decide--o|open source|ProPublica
Decide--x|smart giving|LLC
bDAO[["external edu recipient"]]-->|subsidised course|LLC
```
1. Research
2. Market probing
3. Deployment
4. $100 (upfront)+200(contingent) petty cash eg Miro Pro subscription
## Goals and Objectives
### Milestone 1: Research
This proposal suggests a modest ~~research~~ market probing scope, with the goal of identifying a minimum viable practice for the issuance of onchain donation ~~receipts~~acknolwedgements. Spenser (via Clinamenic LLC) will conduct this research, and the key deliverable will be a research report (the "report") regarding:
1) what we would need from such a practice,
2) how well Hypercerts could meet those needs, and;
3) if alternatives like Karma HQ are a better or complementary choice.
If Hypercerts do meet these needs, the report will include a basic implementation schema for the issuance of donation receipts using Hypercerts.
If Hypercerts do not meet these needs, the report will suggest an alternative.
The findings from this research, if approved, will hopefully serve as a basis for an evolving set of practices and conventions around onchain philanthropic donation acknowledgment. The research itself can be published under the auspices of LexDAO, should LexDAO so choose, with Clinamenic LLC merely being credited as a contracted researcher.
Goals for ~~LexDAO~~ any nonprofit to be taken in consideration in evaluating Hypercerts:
- Ease of use for contributers and members
- Tansparency and accessibility to internal and external community
- Funnctional utility for future grant-writing
- Privacy and GDPR concerns
- Utility for invoice or recepit versus recognition of non-financial contribution
### Milestone 2: Issuance
If Hypercerts, or some suggested alternative, prove sufficient (Good Enough, Safe Enough) in meeting the identified needs, Clinamenic LLC will work with ~~bestape~~>LexDAO LLC to deploy. The alpha use case is issue donation receipts to donors from GG20 and the Giveth Galactic round.
This milestone may be considered severable and may be abandoned if, after the initial research milestone is completed, such issuance is not considered prudent by LexDAO.
### /tbc added/ Deployment within LexDAO LLC
LexDAO LLC is the Delaware SeriesLLC subordinate to LexDAO (Wy UNA). It acts as a mere legal continer for various Ricardian LLCs which are ring-fenced accounting entities. As such it would need to document that expenditure was sourced from tax qualifying projects (charitable) or as fiscal sponsorship for L3C (low-profit companies) which would get concession loans for social impact.
## Project
### Time
The deadline for the delivery of this report will be 1 month from the approval of this proposal, but this may be extended pending approval of a deadline extension proposal, should additional needs be identified by either Clinamenic LLC or LexDAO's Grants Committee.
The deadline for the issuance will be two weeks after the previous milestone is completed, but this may be extended pending approval of a deadline extension proposal, should additional needs be identified by either Clinamenic LLC or LexDAO's Grants Committee.
### Treasure ~~request~~
> [!Caution]
> *Refactor to better align* eg smart-invoice in escrow
> Upon delivery, Clinamenic LLC will issue an invoice to LexDAO, for the payment to be made onchain.
>
1. Milestone 1: $1000 (USDC or DAI)
- Clinamenic LLC requests from the Grants Committee $1000 (USDC or DAI) for a range of 20-30 hours of work, to conduct this research, to test Hypercerts and/or comparable tools, and to produce a concise report on findings.
2. Milestone 2: $200 (USDC or DAI)
- Clinamenic LLC requests from the Grants Committee $200 (USDC or DAI) for a range of 4-6 hours of work to facilitate, with bestape, the issuance of donation receipts via Hypercerts of any other advisable alternative.
- a decision whether to open source or brand the "smart-giving" will be determined by LexEd as they have identified a beta-tester for comissioned workshops
~~Upon delivery, Clinamenic LLC will issue an invoice to LexDAO, for the payment to be made onchain.~~
3. Milestone 3
- If successful, LexDAO LLC will deploy with escrow released and additional reach-thru royalties aggregating at least 2x request to be returned to Clinemanic LLC
~~The invoicing process of this engagement will, too, consitute an experiment, with the intention of refining LexDAO payroll/engagement processes.~~
### Talent
3 x w4m bounties will be issued to to accelerate the R&D phase
- lvl 2- scribe - analyse the tax implications of L3C DRI matched against issued hypercert
- lvl 2- figher - alter any LexLockerV2 interface as Proof of Concept
- lvl 1+ mage - write the smart contrat to do escrow
## Transfers (Expenditure)
1. $100 - petty cash (eg MiroPro)
2. $200 - as per milestone 2
3. 3xw4m - rated at $300 per = $900
4. royalties = 3@($300 equiv) +100 = $1k with 3x ROI = $3k with $200 cliff
5. royalties 2x $200 back to LexDAO
15hrs x 3 = 45hrs will reduce time to complete milestone 1
LexDAO cashout {-100, +300}
Clinematic cashin {+100, +300, +3.1k)
LexDAO LLC = (breakeven) -3.4k = 5% royalty on $68k commission workshop
# Game theoretical payoff /tbc/
```mermaid
quadrantChart
title Payoffs to reward market-pull not tech-push
x-axis Spenser --> Clinematic LLC
y-axis LexDAO LLC --> LexDAO UNA
quadrant-1 OpenSource
quadrant-2 Abandon
quadrant-3 Failure
quadrant-4 Branded Product
"-100 + articles, +100" : [0.25,0.25]
"-100, +100": [0.25,0.75]
"-100, +300": [0.75,0.75]
"-300, +3,500": [0.75,0.25]
```
## links
Hypercerts website: https://hypercerts.org/
IRS info about donation acknowledgements:
https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions-written-acknowledgments
Edit or comment on this document here: https://hackmd.io/q3on-SF4SzONETb61D6kuQ
Institutional conversation here: https://discord.com/channels/682960432272506907/1243605774698025000
Invoicing tool:
https://cryptoinvoice.new/
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