For any group or organization to be effective, it needs to be able to make decisions about how to allocate its resources. Especially for organizations aiming to be self-managing, participatory, or 'teal', collaborative decision-making models for allocating funds are not very developed yet. Tools such as Cobudget can make collaborative budgeting and funding process easier, but there is much more to successful budget allocation than just one tool!

The participatory proposal process

There are many ways to do collaborative funding. This guide focuses on ****one type: the participatory proposal process. In the following chapters, we will take you through the basic steps of setting up and running this type of collaborative funding round for your organization, from bringing awareness to your group culture, to onboarding, engagement, proposal making and funding.

Who is this guide for?

This guide is for any organization that wants to take a first stab at collaborative funding; or, if they have implemented other types of collaborative funding before, to try out a new practice. It is has been written to support individuals and teams who are leading the design and facilitation of collaborative funding processes in their organization.

Which types of organizations? Any! What is written here is valid whether you are a company, a network, a community, a membership organization, a government or educational institution. To keep things simple, in this guide we refer to all of these as a 'group'.

About the authors

This guide is brought to you by Greaterthan, an organization with the mission to make participatory governance in organizations the new normal by spreading culture, knowledge and practices. We want to make collaborative funding easy and accessible to anyone.

The authors of this playbook, Francesca Pick and Kate Beecroft, have over a decade of experience in participatory governance, self-organization and community building. The knowledge shared here stems from their first-hand experiences as leaders and practitioners in global networks such as Enspiral and Ouishare, and the growing practice of collaborative budgeting they have helped to develop in these networks.

Acknowledgements

Thank you to:

• Enspiral for incubating the development of Cobudget and for trusting Greaterthan with its Stewardship.

• Communities who have served as testing grounds for these learnings and collaborative funding practices, Enspiral, Ouishare and many more.

• Genesis Alpha DAO and DAOstack for making this work possible with a financial contribution through Alchemy.

• Lisa Gill for editing.

License

This work is licensed under Creative Commons Attribution-ShareAlike.

****

Making a strong proposal needs to strike a good balance between being short and to the point, but include all key information and background for others to make an informed decision on it. You don’t want those reading it to feel overwhelmed, nor as if you were too lazy to give them a clear explanation of your pitch.

Collaborative budgeting and funding is not a new practice. Its original application was in the field of civic engagement, to tap into the collective intelligence of local citizens to decide how to allocate municipal funds. The first documented participatory budgeting took place in Porto Alegre, Brazil in 1989, to give citizens a stronger voice in political decision making.

To cope and thrive in today's rapidly changing environment, many organizations today want to become more self-managed, participatory and human-centered. While these new practices are becoming increasingly refined and established, applying these principles to decisions around money and resource management is still a struggle for most organizations. Yet when done well, this practice can be a very powerful starting point for creating more engagement, participation, agility and transparency in any organization.

Why organizations do collaborative funding

Budget governance is an essential pillar part of running an organization. By giving stakeholders, employees or members insight and control over the whole or a proportion of the treasury of an organization, you are enabling them to deeply care about the health of that treasury and of the organization.

The reasons for doing collaborative funding are manifold, but here are some common objectives:

• To run participatory internal innovation programs and call-for-proposals

• To catalyze employee or member engagement by enabling them to propose projects and allocate resources to them

• To create more participation and transparency in their financial and budgeting processes.

Cobudget

Cobudget was originally developed by members of the Enspiral Network for their collaborative budgeting processes. With the help of Cobudget, the 5 step process described in this guide can be run easily, but you can also use a simple spreadsheet or any other collaborative decision-making tool.

The open source tool is now available for use at Cobudget.co. To learn more about how Cobudget works, check out this Guide to Collaborative Funding.****

You are setup and ready to go, and now all you need is great proposals! Where do they come from?

A successful funding round is defined by whether you can generate relevant, high quality proposals that will help your group achieve its objective(s). As you will see -- once you get started -- this is not as easy as it seems.

What a 'high-quality' proposal looks like depends on your organization and the context. You may be using looking to fund strategic and/or operational tasks with your participatory proposal process. Depending on this objective, this means your group will need to generate proposals that range from high-level strategic actions to simple day-to-day tasks.

If a tool like Cobudget itself and a proposal comment function were the only ways for people to interact around such a budgeting process, one's ability to generate good proposals would be very limited. Why? Because high quality proposals are often the result of more than one brain working on it, together, and having gone through multiple feedback and adaptation cycles.

Check out this section for some concrete tactics on how to do this.

Even when a proposal is high quality and aligned with the objectives of the group, it still is only about half way there to being successful. The success of a proposal also depends on the level of engagement and excitement the proposer is able to create around their proposal. The skill and knowledge of a group that is needed to create engagement around a proposal is often underestimated. As a person starting your first collaborative funding round, it is important you set the right expectations in your group for what it takes to get a proposal passed, and make them aware that creating engagement is part of the “work” they need to take into account.

Tactics and Methods

Here are a few tactics you can share with the participants of your funding round to help them create engagement around proposals.

1. Involve others in the proposal creation stage

The more involved people are in a proposal before it is posted, the more engagement it will get. Raising your ideas early will enable others to contribute to the creation of your proposal, whether on online discussion channels, group calls or direct messages. A useful practice for facilitating this is creating a discussion channel that is dedicated to sharing unfinished ideas and looking for contributors.

2. Framing your proposal to the group

Once your proposal is almost done, it’s a good idea to prepare targeted messages to share it with in the group. Make sure to explain why what you are pitching is relevant for them. How will this proposal affect the organization directly and why should they care? Maybe even consider writing slightly different messages for specific sub-groups, so you can highlight parts of you proposal that have an impact on them. This can be a lot of work, but the more targeted the message, the better!

3. Communicate (but don’t spam)!

Once you’ve posted your proposal on Cobudget, you need to communicate about it to others on the communication channels of the group. Don’t just rely on others seeing it in Cobudget, especially since people have short attention spans and the web offers so many distractions.

But remember: it’s important to find a balance between sending enough information and being pushy or “spammy”. The attention of people in your group is precious, so do not waste it by sharing an overflow of information. Your style of communication will help build trust with other participants and lay the foundation for your future proposals to get funded.

4. Get support from influencers

Depending on the type of group you are in, another useful way to garner support for your proposal may be to identify key people who are recognized in your group for their expertise and have influence on the subject of your proposal. Reach out to these influencers and ask them to publicly share your proposal or endorse it will help it get attention among the right audience.

Not matter how distributed or democractic the power structure in your organization may be, there are always leaders who have a formal or informal influence on others’ decisions.

The proposal process described in this guide is focused on a model of running funding 'rounds'.

By this we mean that the proposal process has a clear beginning and end, as opposed to continuous funding. Most of the advice in this guide in steps 2, 3, 4 and 5 are applicable to both, but there are some key differences; as well as pros and cons for using rounds vs. doing continuous funding.

The reason we chose to focus on the rounds model here, is because our experience has shown that it is a good model to get started. In some cases, a rounds model gradually turns into a continuous funding model over time (if the practice is successful). Read below for some of the advantages of rounds.

Why using rounds is a good idea

• Focus and traction. One of the challenges with collaborative proposal processes, as with most communication in all types of groups, is getting people's focused attention. Rounds help to focus people's energy and attention into a certain timespan, resulting in high activity.

• Easy to design iterative experiments. By having a clear beginning and end

  to your round, you can design contained experiments to test certain ideas, and then re-configure or tweak the model for your next round. Especially if you run retrospectives in between rounds to reflect on how it went and how to better meet the needs of your group, the learning curve will be high and your process will get better with each round.

• Comparability of proposals. When you run a round, proposals are all pitched within a defined timespan, rather than spread out over long periods of time. This means that group members will be able to compare proposals with each other when funding them. People with similar ideas are also more likely to see redundancies and areas for collaboration if they are pitching at the same time.

• Funds may be spent more strategically. Since rounds give the group more focus and show a large number of proposals at once, this makes it easier to facilitate strategy making processes and prioritize which proposals will help achieve the group's goals.

Before you can start, you need to define the basic parameters of your group setup. Here are some questions to answer in order to be able to do this.

Flow of funds

• Which organizations or individuals are contributing funds into your funding round? Do you already have a fixed budget, or are you looking to raise funds from the group members itself or from an external funder?

• At what frequency will these funds come in? Will it be a regular frequency (i.e. a fixed amount per week or month), or do funds arrive ad hoc? The more visibility you have on the rhythm that funds will come in, the better; so you can design your round rhythm around the available funds.

Decision-making power

Organizations can use different parameters to distribute decision making power. In a participatory proposals process, like using Cobudget, the key parameter for who gets voting power over which funds is crucial. Key questions to be answered are:

• How will funds be distributed within the group?

• Will each person receive the same amount? If not, what are the different amounts of distributed funds based on?

Especially on questions around decision-making power, you may find disagreement in your team; so make sure to plan enough time for this conversation. Once you have clarified these aspects, you are ready to begin onboarding and start your funding process.

For more guidance on this step and choosing the right money governance model, check out this presentation. ****

Once you have chosen your parameters, you could use ****this template to formalize your setup.

Invitations matter - a lot. The way a person is invited into a space, a process or a software tool determines how they behave in or with it.

Do not underestimate the importance of clear invitations and onboarding, because these initial behaviors set an important precedent for all future behaviors and the culture of the group.

Designing the onboarding experience

From the moment a new member of your organization is invited into your collaborative budgeting process, it is important to think about what experience you would like the members to have and which behaviors you want to support.

Money can be a sensitive and emotional topic for many people. Only a small number of people traditionally engage in budgeting processes, which means that this topic may be outside of the comfort zone of the majority of group members. Hence it is important that people don't feel intimidated by the initiative and feel safe enough to jump in (and not be afraid to fail!).

Questions that will help you design your onboarding experience:

• Who would you like to participate in your participatory proposal process?

• Is this an open process or invite only?

• Are you targeting people who already feel comfortable developing and pitching ideas and making financial decisions, or is your objective to bring in people who are new to this?

• How easy should it be to participate?

• What type of behavior would you like to encourage - competition or collaboration between proposers?

Bring awareness to your group culture

If this is the first time you are experimenting with collaborative funding, take some time to reflect on the culture of your group or organization.

Though organizational culture is always dynamic and re-interpreted by being lived, it can also be intentionally shaped. Before starting a collaborative funding process, it's important to bring awareness to your current group culture and think about how this practice can meaningfully be integrated with it.

There are two important reasons for this:

1. Decisions around money and resources can bring forward strong emotions and surface tensions. The more tuned in to where your group is at, the better you will be able to integrate this practice.

2. To get a high amount of good proposals is an indicator of the health of your group culture. A strong shared culture can be an key lubricant to a successful proposals process.

Foundations for creating engagement and shaping culture

• Create spaces for interaction. People find meaning in social interaction and it keeps them engaged. If there are strong ties between people and a consistent rhythm for people to meet and exchange ideas, have discussions and connect, you have the basic cadence for your culture to be built on. There are a vast number of online tools that can facilitate this, such as Slack, Loomio, Discord, Kialo, Discourse and Telegram.

• Encourage divergent thinking. Differing opinions and robust debate is a natural part of collaboration and it can be transformative. The group needs to create implicit and even explicit norms for how divergent conversation, debate or disagreements will take place. There also needs to be a social contract about what kind of communication is welcome and where the line is. Having a named role (i.e. a moderator or community builder) ensures someone is thinking about “the (or a) line” and when it is crossed.

• Moderate for quieter voices. Asynchronous, online spaces where lots of debate ensues are fun for some and intimidating for others. If you’re going to create infrastructure useable by many you need to make space for voices and perspectives than are not typically made welcome in a-synch, online spaces. This can be done by creating a separate channel for spirited debate.

Now that you have given thought to your group culture, it’s time to get started! Over the next pages, we sketch out 5 basic steps that you can follow (and adapt!) to run your first funding round.

How to run a kick-ass collaborative funding round in 5-steps.

This is a guide about the practice of 'collaborative funding' and a five step recipe to getting started with it.

To navigate this guide

License

High quality proposals are most likely the result of more than one brain working on it, together; and having gone through multiple feedback and adaptation cycles. Here are some tactics to achieve this.

1. Create alignment through articulated goals and objectives

Having a clear purpose and shared goals are a powerful way to align a group towards collective action. If your funding round has no clear collective objective, participants will not know what types of proposals to make.

It is good to have goals and objectives. We define goals as: tangible, qualitative and implementable. We define objectives as 'North Stars' - or an agreed upon direction for the organization.

2. Design your process to incorporate an 'Ideas phase'

Nobody's proposal starts out perfect. Getting to high quality proposals requires multiple feedback cycles to refine and improve them. While encouraging participants to ask for feedback from their peers is great, it is even more effective if you design a feedback loop into your participatory proposal process.

Here are some things you can try:

• Encourage people to share ideas even if they are half-baked. Maybe another person in the group has a similar one they can merge with, or has exactly the perspective needed to complete it!

• Define a time frame during which new proposals need to be discussed before they are be opened up for funding. This conversation can take place directly on the proposal page, or any other place for online or offline sharing (see #4).

• Organize a session with your group to give feedback on each others proposals and workshop them together.

• The Ideas Phase in the Cobudget software can help you formalize this step.

• • When you create a new bucket, proposals first appear in that section.

• In this step, it is not mandatory yet to add a budget to your proposal. This will give the proposer time to get input from others on how much funding is needed for the idea

2. Foster a 'proposal mindset'

Instilling a 'proposal mindset' in your group is important to turn conversations into action. Every time the group is talking about a subject, it is useful to ask questions such as: “Is this ripe for a proposal?”, or “Where does a potential proposal sit beneath the topic being discussed?”. Looking for the proposal in every conversation will help you make things concrete more quickly.

3. Create spaces for collective deliberation, strategic reflection and self-organization

Another key part of creating relevant proposals is offering your group ways to share context, self-organize around interest areas and deliberate together. If people can work in groups of three to generate proposal ideas, they will be much more successful than if everyone is trying to come up with their own ideas. Here are some things you can try:

Online Forum and group chat

Have channels for casual conversation, as well as channels for deeper conversations on proposals or other governance issues. The Ouishare community, for instance, uses Telegram for general conversations and Loomio for more complex topics, as overall strategy of projects.

Working Groups

These are a useful mechanism for helping small groups of people align to get work done. They are (often temporary) groups of people sharing knowledge and working on a topic for a certain period of time; which then dissolve when the work is completed. Examples of working groups could be communications, events or open source development working group.

Weekly calls

In addition to asychronous online communications, in-person meetings or group calls are very useful tools for giving participants rich context and information about your initiative. This is an important foundation for creating alignment and high quality proposals. This type of meeting may only be necessary for key milestones, such as a kick-off call or a live proposal pitch session where proposers can present their ideas. But if your round will last several months, we recommend having a weekly call which takes place at the same time every week for one hour. We recommend having a facilitator and a note-taker (rotating role), to store notes openly so that anyone can access them.

Facilitation

If you are using meetings or online calls as a way to align and connect it is important to utilize facilitation. Facilitators can help the group achieve outcomes and co-create.

One of the beauties of running a participatory proposal process with Cobudget is that deciding which proposals to fund is quite easy and fun.

The next step after that --managing the flow of funds, ensuring work is delivered and proposers are held accountable-- is unfortunately less so. This is when things get serious! If your organization is small, you can rely to a large extent on interpersonal ties and trust to help ensure proposals are delivered, but once you reach a certain size, you will need an accountability system that does not rely on people knowing each other.

Every group has different needs in terms of accountability, so it is important that before starting your funding round, you think about the accountability standards in your group and how to ensure accountability.

Methods for creating accountability

1. Make accountability part of your proposal template. Include the question: "How do I want to be held accountable for this proposal?". This will help you get clear deliverables that can be tracked.

2. Setup a proposal tracking sheet to keep an overview of proposals that have been paid out, delivered, etc. You can find tracking templates here.

3. Ask proposers to share regular updates in a place you agree on:

   1. A certain communication channel or directly on the proposal page.

   2. If you have a regular call (i.e. weekly or monthly), make it part of your rhythm to have a time-slot where proposers are invited to share proposal updates. This helps create a strong feeling of accountability to the group.

4. Create a delayed payout policy for funded proposals. For instance, you could agree to hold back part of all funds in an escrow account, and pay out those funds based on pre-defined milestones (tied to deliverables).

5. Nominate a proposals accountability team to manually follow up on the status of proposals and flag to the group if a proposal is late or not being delivered.

You can download and reuse this tracking template:

Here is a summary of case studies mentioned in this guide for inspiration, copy & pasting!

Evolutionary Leadership Institute

The Institute for Evolutionary Leadership is a training company and community of thought leaders working towards a more just, sustainable, and flourishing world. > See case study****

League of Intrapreneurs

The League of Intrapreneurs is a global learning community of “intrapreneurs” (entrepreneurs inside companies), who believe in creating change from within. > See case study****

Outlandish

Outlandish is a worker owned cooperative that uses Cobudget to democratically distribute dividends to all cooperative members as a way to invest in new projects they care about, for example new tech products, social impact projects that need software, match funding of international initiatives. > See case study****

Blackwood Seven

Blackwood Seven is a marketing platform that uses artificial intelligence to help organisations get better results for their marketing spend. Their Barcelona team of 16 agile developers and people working in administration, human resources and communication experimented with Cobudget. > See case study****