I don’t see any reason that using a DAO would be preferable to using traditional methods to accomplish the same goals. Traditional methods don’t carry the risk of the DAO being hacked or manipulated, or the risks of having the donor money caught up in crypto. DAOs are useful for some purposes in that they don’t require trust in any centralized actor...but I don’t see that as a major upside here.
Another obvious (to me) problem is that you likely couldn’t get tax deductibility for donations. In a DAO, code is law, and so there is no board of directors with ultimate authority who could ensure proceeds are spent only as allowable for a tax-deductible nonprofit.
You are correct in a sense but that is the strict DAO protocol. Mine would be more of a hybrid with some aspects handled on the blockchain.
On the issue of tax deductibility, there are successful DAOs who have scaled this hurdle and I believe we can study what they did and figure out how to implement ours. In fact getting a tax-deductible entity is among the things that need to be figured out during the first 2-3 months stage. Its part of the reason why I want to first work with a handful of knowledgeable experts.
On the issue of DAOs vs Traditional methods, permit me to copy-paste a slightly modified answer to a similar question in another comment:
It is possible to use [traditional means] but Blockchain has some features built in that make some critical aspects easier.
Blockchain here mainly helps with automating membership tracking and portability across apps / ecosystems. They are also important for the transparency and voting aspects. Will also help in funds security, access and control.
But everything will not be built on/around the blockchain. In fact, most of the co-ordination will be on regular websites / platforms like slack (a slack clone, actually), Discord, etc. There would even be a closed forum for DAO members only.
All of these are similar to what you are suggesting. But the NFT/blockchain aspect is like the critical thread that ties everything together.
And on the issue of hacking and manipulation, there are ways to ensure security that minimizes hacks to the barest minimum including using common sense, education and proven technology used by the best known DAOs. For manipulation, it boils down to the kind of structural framework being used.
There are also methods for managing crypto-related risk (one of which is the use of regulated stable coins).
In summary, these concerns of yours are very important to consider but they are not impossible to overcome.
Moreover, one other thing with traditional methods is: Who sets the ball rolling? Who bells that cat?
If there are people willing to pay $10MM for NFTs that grant voting power in a blockchain-based grantmaker, I don’t see why those same people wouldn’t be willing to pay the same for voting membership in an organization that did the same thing without the whole blockchain business.
I think this is a solution in search of a problem.
I don’t see any reason that using a DAO would be preferable to using traditional methods to accomplish the same goals. Traditional methods don’t carry the risk of the DAO being hacked or manipulated, or the risks of having the donor money caught up in crypto. DAOs are useful for some purposes in that they don’t require trust in any centralized actor...but I don’t see that as a major upside here.
Another obvious (to me) problem is that you likely couldn’t get tax deductibility for donations. In a DAO, code is law, and so there is no board of directors with ultimate authority who could ensure proceeds are spent only as allowable for a tax-deductible nonprofit.
In a DAO, code is law
You are correct in a sense but that is the strict DAO protocol. Mine would be more of a hybrid with some aspects handled on the blockchain.
On the issue of tax deductibility, there are successful DAOs who have scaled this hurdle and I believe we can study what they did and figure out how to implement ours. In fact getting a tax-deductible entity is among the things that need to be figured out during the first 2-3 months stage. Its part of the reason why I want to first work with a handful of knowledgeable experts.
On the issue of DAOs vs Traditional methods, permit me to copy-paste a slightly modified answer to a similar question in another comment:
It is possible to use [traditional means] but Blockchain has some features built in that make some critical aspects easier.
Blockchain here mainly helps with automating membership tracking and portability across apps / ecosystems. They are also important for the transparency and voting aspects. Will also help in funds security, access and control.
But everything will not be built on/around the blockchain. In fact, most of the co-ordination will be on regular websites / platforms like slack (a slack clone, actually), Discord, etc. There would even be a closed forum for DAO members only.
All of these are similar to what you are suggesting. But the NFT/blockchain aspect is like the critical thread that ties everything together.
And on the issue of hacking and manipulation, there are ways to ensure security that minimizes hacks to the barest minimum including using common sense, education and proven technology used by the best known DAOs. For manipulation, it boils down to the kind of structural framework being used.
There are also methods for managing crypto-related risk (one of which is the use of regulated stable coins).
In summary, these concerns of yours are very important to consider but they are not impossible to overcome.
Moreover, one other thing with traditional methods is: Who sets the ball rolling? Who bells that cat?
If there are people willing to pay $10MM for NFTs that grant voting power in a blockchain-based grantmaker, I don’t see why those same people wouldn’t be willing to pay the same for voting membership in an organization that did the same thing without the whole blockchain business.
I think this is a solution in search of a problem.