Framework for Seasonal Budgets, Projects reviews and budget tracking

Title: Framework for Seasonal Budgets, Projects reviews and budget tracking

Authors: TommyOlofsson, Kouros

Date: 10/21/2021

SUMMARY

BACKGROUND AND MOTIVATION

  • The DAO needs a way to create and manage a budget to enable it to operate efficiently and effectively. DAO members need tools to control that budget.
  • DAO Projects that receive funding need guidelines and a process.
  • The DAO has a procedure to allocate budgets to the projects and guilds, to help the Grants Committee and future budget processes we should align our budgets and expense tracking.
  • The DAO needs to account for its expenses, profits, losses and assets.
  • Treasury Guild has the capacity to help other guilds/projects manage accounting, budgeting and presentations.

The DAO Treasury will allocate an amount for each season based on suggestions from the Grants Committee, the size of each allocation should be a consideration for the DAO Treasury after all requests are submitted, the recommended allocation would be voted on by the DAO. This suggestion should be submitted two weeks prior to the start of the Season and voted on Snapshot.

Guilds and projects need to submit their budget request one month prior to the Season start to be reviewed by the Grants Committee. The GC will then advise the DAO of the budget needed for Guilds and projects to be included in the specifications of the Season. The specifications may also include other budget allocations like compensations or salaries for contributors and that would have been decided in the DAO.

This process aims to avoid both funding too many projects and stretching the DAO to thin which leads to few quality deliveries being made and frustration built on. But also more important to forecast and allocate the appropriate budget to all important projects for the Season.

Projects excluded at this point will either wait for the next season or request a grant from the Grants Committee mid season.

Projects funded will have to show their progress either with KPIs or milestones, these can be tied to further payments in the case of large projects or grants. It’s also important to have a highly transparent spend and spend reporting should be considered critical.

DAO Project Reviews

Projects that accept funding will have to show their progress either with KPIs or milestones, these can be tied to further payments in the case of large projects or grants. It’s also important to have a highly transparent spend and spend reporting should be considered critical. Focus for all projects should be to have complete transparency as to usage of DAO funds, this will also enable later learnings where we can compare budget/ambitions to outcomes.

Funded projects are expected to provide bi-weekly updates to the Ops guild, for expense tracking the project can either ask the Treasury guild or manage their own accounting in line with demands described below.

Expenses should be tracked in their budgeted category and currencies and presented versus budget and completeness of task/category. We suggest project champions also comment on major expense categories and tasks. Please note that projects should apply accrual accounting for remuneration, in practice this would be to show how much money has been spent but not paid for work done. An easy example would be for a paid position of 7kBANK/week and paid at the end of the season, to show how much has been spent to date the project would estimate the cost based on # of weeks.

It’s also important to indicate if funds have been allocated to other remuneration such as Coordinape, we suggest Coordinape amount and other remuneration to be tied to milestones when possible. As an example, 700kBANK Coordinape round for all translators once the international media nodes reach 1 million readers/followers. This ensures the DAO won’t continue to fund projects not moving forward, and if the project deviates from plan, they should present a new plan.

We suggest all projects have a spreadsheet or a report where they appoint a person to update this accounting or contact the treasury for this service (should be budgeted for). In general we should aim for clear rewards for work done and projects moving along according to plan. If projects decide to deviate or change plans and this results in milestones not being met the project can ask the DAO/GC for more funding and explain why they haven’t moved towards their goals as planned. We’re all new, it will and can happen but we have to ensure funds are used as voted on.

If you want help with a template and/or report template please reach out to the Treasury Guild

DAO Guild expense tracking

The Treasury Guild will monitor and track the budget of the Guilds in the Budget Tracker spreadsheet. The Treasury Guild would then ask the Guilds for any information regarding expenses and transactions. We suggest the Guilds appoint people to provide this information.

Expenses should be tracked in their budgeted category and currencies and presented versus budget and completeness of task/category. There should be comments on major expense categories and tasks. Guilds should track their spend and remaining budget in the sheet.

Next steps

  • Create roles in Ops Guild to oversee projects.

AUTHORS BACKGROUNDS

  • TommyOlofsson. Working as a financial officer in several companies and capacities during 8 years, have been responsible for budget/forecasting processes for several years and therefore understands the need for clear processes, accountability and structure. Cash Flow is essential for any business to keep running, to ensure the survival of the DAO and keep its pace it’s important to have a working back-end structure for finance.
  • Kouros. Treasury Guild Organiser. Grants Committee member and Bankless DAO multisigner.
5 Likes

I’m in love with this. @0xJustice and I are releasing a proposal today for some tooling that might really help with this. @tommyolofsson has seen a demo of how it tracks milestones and polls automatically in Discord for project updates. Let us know how we can help! Big fan of greater transparency and accountability for funds received from GC.

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That I have, as you know I’m a fan!

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I’m a fan of KPI tracking for project payments. Perhaps there’s a simple dashboard that can be created so that each project/guild can input their expenses and it flows into a database or an internal blockchain. Simplify the data collection and keep everything consistent so that analysis is much easier. I’m pretty sure other DAOs are running into similar problems so maybe there is an existing solution.

We’re looking into several solutions built on top of gnosis that could help, most of them aren’t at the analitycs / monitor several wallets at this stage. But tools are coming and we’re helping the ones we can scope our needs and hoping we get that on top of their to-do

I totally support this proposal. Projects need to be checked!

I want to stress one point:

We need to create a body which is competent to present a proposal for the allocation of the funding for the entire Season.

I think that the piecemal approach adopted with the series of forum posts does simply not work, because voters do not usually compare between the different proposals, the milestones and the requested funding. Such a way of deciding things could go against the interest of the wider community.

Having a budget proposed by a Guild or a Committee would not necessarily mean loosing decentralization. In reality, the voting rate of the forums is very very low and it is hard for a member to have the full picture. IMO the community should vote on 1 allocation proposal presented by the “budget committee.” We would have much more voters and more oversight

Though I don’t like the idea of doing it, I agree with @Eagle that an Omnibus Bill is likely the best approach.

Instead of “We have 20m, where should it go?”
We can do “We have 20m of project funding, do we all approve?”

It can be split into Guild & Project votes, with a classic Grants Committee existing to cover mid-season gaps.

KPIs and Milestones are going to be interesting to evaluate and negotiate. Would love to see some examples or recommendations for the existing projects.

Seems reasonable that Ops & Treasury can take some role in maintaining transparency for projects and their KPIs/milestones, but I want to be sure that these guilds do not have principal oversight on all projects - only ensuring that the data is tracked and available for an elected body to review (Grants Committee, Guild Senate, etc).

Glad we’re working to improve this!

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Yeah, my point was that the Ops guild keep track of the projects and milestones and then make the info available to the DAO and the GC so decisions can be made with that data. But we should totally have people dedicated to this.