The Universal Impact Pool

Donating to the Universal Impact Pool (UIP) offers the same tax-free status and perks as donating to a DAF, but with a couple of key differences:

• The UIP is open to the public - Anyone can contribute, any asset. It’s a great place to donate to if you don’t have a specific nonprofit in mind.
• Grant Recommendations are Automated - Instead of having individuals advise the fund, grant recipients for the UIP are determined automatically through Quadratic Funding. At the end of each quarter, the allotted Round of funds is distributed as grants across the organizations receiving the highest volume of donation traffic to their org. Each gets a little bump of funds based on community signaling.

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The Principles of Quadratic Funding

The funding an organization receives from the UIP (out of eligible recipients) corresponds to the square of the sum of the square roots of contributions made to eligible recipients during a specific time period, known as a Round. Grants are distributed from the U.I.P. following the conclusion of each Round according to Endaoment’s Quadratic Funding formula:

$Percentage_{k} = \sum_p \frac{(\sum_k C_{pk})^2 - \sum_k C_{pk}}{(\sum_k C_{k})^2 - \sum_k C_{k}}$

where:

$C_k$: Unique contribution for the current project $k$.

$C_{pk}$: Unique contribution $k$ to project $p$.

In the case that an eligible organization only receives a single contribution during the round, we inject a $1 USD equivalent donation into the formula so that the eligible organization is not excluded from impact pool distributions.

Our goal in creating the Universal Impact Pool is to amplify the impact of small donations, incentivize participation, and utilize a funding mechanism that diminishes the influence of a small number of large donors, fostering a more democratic and decentralized decision-making process on grant distribution.