About Impact Pools

Donating to an Impact Pools offers the same tax-free status and perks as donating to a DAF, but with a couple of key differences:

• Impact Pools are open to the public - Just like Community Funds, anyone can contribute.

• Automated Grant Recommendations - Instead of having individuals advise the fund, grant recipients for Impact Pools are determined automatically through Quadratic Funding. The guidelines for each Impact Pool are established at its inception and govern this process.

The principles of Quadratic Funding remain consistent across all Impact Pools: the funding an organization receives from an Impact Pool (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 Impact Pools following the conclusion of each Round according to Endaoment’s Quadratic Funding formula:

$\text{Percentage}(k) = \frac{{\left(\sum_{k} \binom{C}{k}\right)^2 - \sum_{k} \binom{C}{k}}}{{\sum_{p}\left(\left(\sum_{k} \binom{C}{p}\right)^2 - \sum_{k} \binom{C}{p}\right)}}$

$where$

$C_{k}:Unique contribution for the current project$

$C_{pk}:Unique contribution K to project P$

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.

The key difference between individual Impact Pools is the group of eligible recipients eligible for grant receipt.

Our goal in creating Impact Pools 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.