A certificate of impact (also known as an impact certificate) is a kind of altruistic instrument at the center of a funding model proposed by Paul Christiano. Certificates of impact attempt to harness the benefits of the price system in altruistic contexts, where prices are usually unavailable.
In this model, altruistic work receives some or all of its funding after completion rather than beforehand. Once an individual or organization completes work with a positive social impact, they can apply for a certificate of impact. They can then sell this certificate to another organization or individual. Following the sale, the new certificate holder can claim credit for the project's impact, and the organization that carried out the project must acknowledge that they have sold its impact.
This scheme has been proposed and tested by some members of the effective altruism community. They argue that the scheme is better than funding incomplete projects, because it allows for payments by results rather than by effort, which better incentivizes those running the project to do a good job. They also argue that awarding certificates of impact might be simpler and clearer than pre-funding projects.
Recently, some related funding models have been proposed.
In early May 2021, the organization Noora Health—which implements educational programs for mothers of newborns in South Asia—launched a non-fungible token (NFT) which may in some respects be regarded as a certificate of impact. The auction opened with a list price of $2.5 million, and computer scientist and tech entrepreneur Paul Graham—a long-time supporter of the organization—placed the winning bid of ETH 1337, at the time worth $5.23 million. A difference between this use of NFTs and certificates of impact as conceived by Christiano is that those bidding in the NFT auction pay for the prospect of future impact. In contrast, an impact purchase is a transaction involving the transfer of past impact.
In late July, a group of authors, in collaboration with Vitalik Buterin, proposed a model called retroactive public goods funding. The model consists of a decentralized autonomous organization (DAO), called "the Results Oracle", which funds projects with high social value. The funding is done retrospectively rather than prospectively, by assessing the value of the project after it has been completed. Once the Results Oracle evaluates a project, it can send the reward to the person or group responsible for the project, or, alternatively, it can use the funds to establish a price floor for a token associated with the project. As the authors note, rewarding via a project token effectively creates a prediction market for the amount of funding the Results Oracle will decide to allocate to the project, and allows the same project to be funded multiple times or by other sources besides the Results Oracle....