Discover more from Impact Markets
Experiment in Retroactive Funding
An EA Forum prize contest
TL;DR: We want to buy the impact of quality EA Forum posts.
We’re working on building impact markets to make public goods tradeable by retroactively funding the labor of the people who create them.
Our overall goal: make the nonprofit space work more like for-profits. Pay for outcomes, not for promises.
We’re doing this to increase funding for public goods and make it easier for large funders to find and fund valuable projects among other benefits. (See below for more detail on our vision for these markets.) We are receiving a grant via the Future Fund Regranting Program and are excited to start launching experiments to iterate towards a large open impact market. You can check out our new informational website and join our community Discord.
Our first “minimal viable product” is this contest. We are purchasing the impact of EA Forum posts in a centralized and moderated way to create a controlled sandbox in which we can observe the consequences and course-correct with feedback from the community. This way, we plan to mitigate potential risks and downsides to impact markets.
If it goes well, we plan to progressively expand both the prize pool amount for each contest and the scope of the market to things beyond the EA Forum. More broadly, we envision a world where markets for public and common goods (with mechanisms such as impact certificates, impact stock, retroactive funding, quadratic funding, dominant assurance contracts, Harberger taxes, etc.) play a significant role in the creation and funding of these goods.
Below are the instructions for the contest. If you feel confused, there are examples and analogies below the instructions.
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Please submit your post on app.impactmarkets.io.
If you want to save time, you can leave the justification (i.e. description) of your impact certificate empty and add it only if and when someone indicates interest in buying some fraction of it. Without the description it should only take a minute or two.
EA Forum posts from May and June are eligible. Posts submitted after June 30th will not be considered for this particular contest but may be eligible for future contests.
We value forum posts in proportion to how much we consider them morally good, positive-sum, and non-risky. (More on our criteria below.)
We have, for almost a year, thought a lot about risks from contests like these and from the markets that they may turn into. You can read more about our thinking in the post Toward Impact Markets.
We welcome any feedback you might have, positive or negative! Here is an anonymous feedback form that you can use. Comments on this post are of course welcome too.
Please only submit EA Forum posts. For example, if your post discusses a project that you’ve launched, then please make it clear in your certificate text that the certificate is for the Forum post only (a similar purview to copyright) and does not extend to your project.
If we buy some percentage of the impact of your post you will be required to edit your EA forum post and put a note at the bottom linking to your certificate on our website (for future tracking purposes).
You can give some percentage of the impact (and potential sale price) to someone else you collaborated with (coauthors, editors, proofreaders, etc.). Make sure to discuss and agree on the shared percentage before submitting your forum post for sale. We will not facilitate this sharing, you will have to coordinate between yourselves.
Don’t take advance monetary investments or make promises of future profits or you might get in trouble with your local securities law. Ask us if you're unclear whether this is a concern for you.
We and interested funders want to spend ~$10,000 in total to buy the impact of EA forum posts.
We think there is at least a 90% likelihood we spend the full amount, however, on the off chance we do not find enough valuable posts we are not fully committing all of the funds. We may also spend more if we really like what’s on offer. Buying the impact does not give us the rights to any intellectual property.
At our discretion, we will invite other funders to buy impact as well. Please reach out if you're a funder and you’re interested. These purchases will not count as donations for tax purposes.
We will take the month of July to assess which posts we’d like to make offers on. If we’re sufficiently interested in your post, we will contact you via email or EA Forum message. You can decline the offer or make a counteroffer on the price or percentage of the impact being purchased.
If the offer is accepted we will pay you via wire transfer, check, ACH, or any other payment method that works for both of us (e.g., Paypal, Venmo, Zelle, Wise).
If you write a post and submit it, there is no guarantee whatsoever it will be funded.
We do not plan to resell or consume/open the impact of the posts in the short term but reserve the right to do so in the future. We also reserve the right to give you your impact back for free in the case we think this prize contest was not optimal at initializing the right framing for impact markets.
(Parenthetically: Consumption/Opening are tentative names for a potential mechanism whereby a piece of an impact certificate can be "consumed" by an owner and forever after they "own" that piece of impact.)
Other less important details
We’re currently aiming for transactions to be more than ~$250 (e.g., purchasing 50% of a post valued at $500). If you’re unsure whether your post might be worth it, we encourage you to please submit it anyway! It might be considered for future contest rounds and by different future buyers.
It’s not a requirement to read all of the following, but it will become more important in future contests/rounds. The certificate description justifies the value of the impact as defined by the latest version of the Attributed Impact definition (currently 0.2).
The issuers won’t try to benefit one moral goal at the expense of another or otherwise violate the preferences of others.
In particular, they won’t risk destroying our civilization or creating great suffering, regardless of century, species, or substrate.
Rather they will try to achieve their goals in a morally cooperative, respectful manner.
Topics we’re interested in seeing:
Here’s Dawn’s longer list of inspiration for articles. As a quick-and-dirty heuristic, you can assume that if Brian Tomasik and Nick Beckstead are excited about an article, Dawn will also be excited about it. In particular:
How can you allocate shares in a past project if you can’t talk to all other contributors?
Can you make the case that any of the submitted impact certificates are the result of cheating of some sort? (Submissions of this sort are allowed to come in a few days after the deadline. Please give us the heads-up if you’re working on one.)
But there are also many suggestions on the list that are not directly connected with impact markets.
Dony’s interests are illegible and should not be Goodharted. He wants to incentivize good posts in generality, especially if he couldn’t have predicted them in advance.
Other topics of interest include but are not limited to:
You can enter posts you've submitted into other contests a part of our contest as well!
Our tentatively planned provisional evaluation process (we may change this):
We want to use something like the Utility Function Extractor to aggregate our (Dawn/Denis, Dony, Matt) relative preferences for the submissions,
normalize the sum of the resulting weights to our budget,
set some base fraction that we want to buy for that money,
suggest the deal to the issuers,
and then maybe haggle a bit to make sure everyone is happy with the deals.
Please contact us if you're interested in joining our Evaluation Team!
What does it mean to sell your impact, exactly?
An impact certificate describes some impactful action and represents an entitlement to a fraction of future retroactive funding for that action.
The metaphor here is that you can put some good deed into a bottle, trade it around, and some people will be motivated by profit and some by intrinsic interest in funding good deeds.
It is a new experimental funding mechanism that, we think, can lead to more impact-focused incentive structures in philanthropy.
The Story of An Impact Sale: Two Examples
Story 1 (by Dawn/Denis):
Alice Altruist wants to do a project, such as a scientific paper. Ivan Investor gives Alice money in return for shares in her impact certificate. (This step is not part of this contest.) Ivan also does this with many other projects and helps them succeed. Turns out, Alice did succeed! Finally, Alice and Ivan pitch the project to Reto Retrofunder. Reto loves the outcome of the project and offers to buy shares in it at a price that Alice and Ivan are happy with.
Because of this market/mechanism:
Alice can make a profit from creating good impact
Alice can draw on a larger hiring pool and align incentives through participation
Ivan can make a profit from investing in good impact
Reto can save time and invest it in better prioritization
Reto can draw on market signals to find things he wants to fund
Story 2 (by Dony):
Meet Johnny. Johnny is an altruist. He wants to help reduce global warming and restore the environment. He considers planting trees, but it has costs involved, including the financial cost of buying the seeds and the shovel, as well as the time cost of planting and other personal costs.
There are many people like Johnny, but while some may be intrinsically motivated enough to go through the effort, most won’t. There are many future beings who may benefit from the presence of trees he plants in the present, but they miss out. Economically speaking, the people and animals and other entities in the future benefit the most from the fruit of the tree, from its shade and beauty and carbon sequestration, while people in the present have to bear the burden of supplying it.
It would be nice if there was a way for future people to pay for Johnny to plant the trees now.
Impact markets are a way for money to time travel from the future to the present.
Johnny can plant a seed, and issue an impact certificate. The certificate can describe what he did, show the location of the tree, and link to permanently-stored video evidence of him planting it, perhaps with other evidence such as witness testimony.
The tree sprouts to become a seedling. Johnny can hold onto his certificate or sell fractions of it to others, such as friends, early supporters, or unknown profit-oriented people who are combing the marketplace for opportunities. Now he has some money for his altruism and can spend it on more tree-planting, on a completely different cause area, invest in an index fund, buy food, or whatever he feels like. It’s a reward for doing something no one told him to do, but the impact market is acting like a prediction market over what value it thinks the future will give to the act of tree-planting.
The tree becomes a sapling. The early purchasers can sell their pieces of impact certificates to others. Royalties could be set up to flow back to the issuer or early funders to reward them.
The tree becomes an adult. As it grows over time, the certificate’s value should grow, or at least change as more information comes in. The price may grow if it proves to be a healthy tree and was undervalued by people earlier on. Reasons the price might go down might include: it was planted on private land without permission or was cut down.
At some point, a retroactive funder aka Final Buyer comes in. This is the equivalent of a philanthropist, but instead of funding unproven projects, they’re purchasing certificates representing outcomes that have already happened. They don’t have time to evaluate everything that’s happened, but luckily most of their work has been done for them by smaller funders/investors. The retro funder comes in and says “I will buy certificates for having planted trees”, and either this incentivizes more tree-planting to happen, or they dig up certificates that are already on the market and buy them. Whether this retro funder is actually the Final Buyer or is an early purchaser in a hypothetically unending chain of retro funders depends on your theory of how impact markets will work.
This story, while probably wrong in some details, should give you a broad picture of how this should work. We aren’t accepting submissions for forestry in this contest.
Forum posts aren’t trees, but they are seeds of thought.
Acknowledgments for reviewing and feedback on this post: Amber Dawn, Ben Hoskin, Chris Leong, Dr. Inga Grossmann, Elika Somani, Fabian Chandler, Jeff Bergen, Keller Scholl, Robert Colvin, Sasha Cooper, Siméon Campos, plex