Ukraine | 6 Ways Web3 Made Better Aid
Compared to existing NGO aid organizations, UkraineDAO is exceptional in six areas.
Looking back on 2022, the most significant thing that happened in the world was Russia’s full-scale invasion of Ukraine. (Unless maybe you are from Argentina…)
So for this final newsletter of 2022, I investigated whether web3 has made a positive impact for Ukrainians victimized by war.
Going into my research, I was skeptical. Surely, I thought, a lot of crypto has been donated for the cause, but how would that be any different from the Red Cross raising cash and credit card donations to help Ukrainians?
I was surprised to find that there actually is a compelling case for web3 making an impact in Ukraine.
Compared to existing NGO aid organizations, UkraineDAO is exceptional in six areas: speed, agility, efficiency, transparency, participatory decision-making, and censorship resistance.
In addition to the work they’ve done for Ukraine, this web3-native organization has leveraged blockchain technology to demonstrate a new model for how international aid can operate.
Let’s dig in. 👇
Speed
On February 24, 2022, days prior to Russia crossing the border, Alona Shovshenko formed Ukraine DAO to raise funds for Ukrainians. In just five days, UkraineDAO raised over $7 million in crypto donations from 3,000+ people on the Internet.
In an interview with Crypto Good in August, Alona said, “I wasn't a political activist… I was a normal person. I had 400 followers on Twitter… It's amazing how the community can come together and can raise a lot of money in a short span of time.”
UkraineDAO organization didn’t waste time and effort doing paperwork to incorporate their nonprofit, hire people, and navigate the international banking system to get resources to Ukraine.
Within one week they collected millions of dollars and donated it to the Ukrainian government and to causes like Come Back Alive.
Efficiency
UkraineDAO is Internet-native. They have no office, no official legal status, no bank accounts, no board of directors or any other overhead of a traditional nonprofit organization.
Besides Alona Shovshenko, their one paid full-time contributor who earns $5,000 per month, they are completely run by volunteers.
Their volunteers’ understand the situation unfolding on the ground and which local organizations can do the most good with the aid.
The result of this grassroots knowledge and financial efficiency is an organization donating over 99% of money raised to their cause. That is unheard of.
Transparency
Since all the money raised and deployed is on a public blockchain, you can look at UkraineDAO’s crypto account and see every donation they’ve ever received and every donation they’ve ever made. It is here.
This Dune analytics dashboard shows the inflows and outflows in more visual ways.
Contrast this with nonprofits based in the United States whose financial reporting isn’t publicly accessible online for 2-3 years.
Religious organizations (like Catholic Charities) face no financial reporting requirements. What?!
UkraineDAO can be audited by anyone at any time, while traditional nonprofits cannot be audited for years after they raise the money, if ever.
Which seems more trustworthy?
Agility
Initially, UkraineDAO focused on providing financial support to organizations directly serving the needs of Ukrainians. They have shifted focus to fact-checking and countering misinformation online.
“The beauty of a DAO,” said Alona, “Which is not possible with a traditional charity, is that we adjust to Ukraine and to its needs immediately.”
They are able to adapt quickly because the volunteers self-organized into “pods” to carry out the DAO activities, each with functional leads. Not all pods are active at all times. Currently, the most active pod is Fact-Checking and Media Literacy, owing to the pressing need to amplify Ukrainian voices amid the flood of Russian government propaganda.
When Alona needs support with something, volunteers connected over the Internet spring into action.
Participatory Decision-making
UkraineDAO is governed by up to 150 volunteers self-organizing to get things done. They’re driven by their passion to help Ukraine defend itself against Russia.
In March, a proposal was made by a UkraineDAO contributor to pay Alona a salary so that she could support herself while working full time for the cause. The proposal was overwhelmingly approved.
When people have a say in how their organization is governed, they are more engaged and committed over the long term. This is another sharp contrast with how traditional NGOs involve their volunteers in decision-making.
Censorship Resistance
UkraineDAO is not restricted from raising money from any source or donating to any organization that they believe is doing important work on the ground.
This was highlighted very early in the war when Come Back Alive was banned from Patreon, a San Francisco-based fundraising service.
Come Back Alive’s website clearly states they use contributions to finance and train military personnel. This is what Ukraine needed in the early days of the invasion, but this sort of fundraising went against the web platform’s terms of service.
At the exact same time, UkraineDAO was raising and donating over $7 million to causes that their members - who were on the ground in Ukraine - deemed most important to the Ukrainian cause. It did not matter that an American tech company didn’t like that they were training people to use lethal weapons.
Russia had just invaded their country, after all.
Conclusion
While leveraging web3 technology, UkraineDAO showed the world a new model for how international aid can operate.
Compared to traditional NGOs, they demonstrated exceptional speed, agility, efficiency, transparency, participatory decision-making, and censorship resistance.
I am sympathetic to the counter-argument that no good can come out of war, and so UkraineDAO’s impact on society could not be a positive one.
However, Russia was the aggressor here and Ukraine was acting in self defense. Against long odds, they have fought off the Russian invasion.
No doubt that organizers in other countries will learn from the UkraineDAO example when they need to mobilize support to help their people.
Charles “Chuck” Cummings is building Bankless Consulting’s social impact practice. We’re helping organizations implement web3 technology to maximize their impact. He also serves as the Strategic Advisor to the Do Good Institute at the University of Maryland. Chuck lives in Baltimore and likes to eat tacos.
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