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Most companies distribute profits to shareholders. But there’s another model: giving everything away to charity. We call this embedded philanthropy.
The pioneer in this space is Newman’s Own, which has been donating after-tax profits to Newman's Own Foundation for 40 years. The Foundation gives this money to causes that were near and dear to Paul Newman's heart; their tagline is: “Let’s give it all away.” (The Consumer Power Initiative is a working group dedicated to advancing this business model.)
Likewise, Patagonia’s founders gave away 98% of the company’s shares to a nonprofit dedicated to fighting global warming, and a shop called BOAS is creating a pre-owned fashion platform donating all profits to save kids' lives.
Each of these companies embeds philanthropy into your everyday life. You go about your day, buying your normal stuff, and every time you do, you’re helping someone in need.
What Patagonia does for fleeces, Glo does for dollars
Glo is the antipoverty dollar. It’s a nonprofit currency that will donate 100% of its profits to creating basic income for people in extreme poverty.
More specifically, Glo is a fully-backed stablecoin (a stablecoin is a cryptocurrency that’s pegged to some real-world asset—in Glo’s case, the US Dollar). Stablecoins typically earn money by investing reserve assets in secure assets like Treasury Bills. T-bills have an average yield of about 3.37%. If you invest 80% of your reserve assets in T-bills, you’re looking at about a 2.7% return on total market cap (the amount of the currency in circulation).
That might not sound like a lot, but it is when the numbers get big. And stablecoin numbers are huge. There‘s about $81.5 billion of the largest stablecoin in circulation, and about $30.8 billion for #2. Per the above ballpark calculation, each billion in market cap yields about $27 million in revenue. So the largest stablecoin is looking at about $2.2 billion per year in revenue.
One option is to distribute it among shareholders. The other option—the Glo Dollar option—is to put that money towards a philanthropic cause. Glo’s cause is basic income provided by GiveDirectly, a nonprofit that sends cash to the poorest people on earth, no strings attached. If Glo gives GiveDirectly $1 billion in donations, it will radically transform the lives of millions of people. (About 2,083,333 people to be exact; see this article for how we calculate impact.)
Glo takes something pretty boring, a stablecoin, and turns it into something with radical implications. That's because embedded philanthropy is a radical goal that we can achieve with pretty straightforward means.
Embedded philanthropy means equal parity
Patagonia didn’t become a market leader just by telling a nice story about where your money goes. They got there by selling great products. That’s the best possible outcome. If you’re just selling a more costly product with superior ethics, then your philanthropy stops being embedded, and the difference in price is just a straight up donation.
That might be fine at first—there’s nothing wrong with donations!—but complete equivalence in customer satisfaction opens up a much, much larger market. If you can buy two jars of pasta sauce and they both taste good and cost the same, it’s an easy choice: go with the one that does the most good.
For Glo, this means working to bring our new currency as much utility as you get from the money you use today. As we gear up for launch in the coming months, our first goal is to provide the same availability, security, and liquidity that folks have come to expect from leading stablecoins.
Our next goal is getting Glo accepted at merchants so you can use it the way you use cash today. The more we achieve that, the closer we get to the ideal of donationless philanthropy – a way you can help those in need at no cost to yourself in either money, time or convenience.
Here’s the ask
We need early support to get this ball rolling. If this resonates with you, join the Glo movement.