CTS-model "Community Resilience Foundation"

(Ukrainian context):

• the impoverishment of local communities as a result of the war requires them to seek more efficient methods of using available resources;
• the mass outflow of MSMEs outside of Ukraine requires, among other things, to develop self-employment and entrepreneurship among those who remain. The situation in Ukraine is very unstable and can change rapidly. When you are afraid of missile attacks, blackouts, occupation, etc., it complicates using usual models and tools for MSME support/development to address poverty at a local level, especially in rural areas.
• growing disunity in society and local communities will have a negative impact on rebuilding Ukraine.

(Global context) In accordance with the Challenge Overview by MIT SOLVE, over 1.8 billion adults are still unbanked or poorly served by existing financial products and services. This is a big challenge, on the other hand, it defines a big potential for new solutions.

sources: 

-The World Bank says Ukraine has a tenfold increase in poverty due to war.

-A massive exodus of MSMEs outside Ukraine can cause a problem for the economy.

Our solution is a hybrid of fintech and outreach strategy, which helps interested local communities get benefits that were unfeasible before. Its initial mechanism is a distribution of decision-making shares among residents in exchange for their contributions (products/services) following smart contracts. Testing this mechanism in different CTS models (for different tasks and target groups) demonstrated:

• increasing efficiency of use of available resources as well as additional benefits for local communities;
• providing micro- and small entrepreneurs with double benefits (funding and buyers);
• growth of unity, the human and social capital of local communities.

Presentation and discussion of the pilot results were interested representatives of 17 countries from 5 continents, record of the international conference hosted by the GFCF is available here (EN).

Initially, our solution is focused on residents of small communities (up to 50,000 people), mostly in rural areas, which need to improve the quality of their lives.

Current CTS models work well for interested local authorities, micro and small entrepreneurs, and citizens. These target audience groups demonstrated a high level of satisfaction after they participated in CTS piloting.

Our team is working on developing and piloting solutions for local communities in close contact with representatives of local authorities, civil society, and businesses in these communities.

My proximity to the communities was significantly strengthened due to my personal story. After Russia's invasion in 2022, the missile strikes began. After the first casualties in my home city, I took my two minor children and left for one of the partner rural communities in western Ukraine. For three months, we were IDPs, and I met with all challenges of the IDPs' life. On the other hand, it was an excellent opportunity for me to go deep into local life and needs, communicate with people and participate in common activities to address local issues. 

My personal experience has greatly enriched my background. However, the most significant influence on the team's engagement with communities comes from the decentralized structure of our informal partnership network, in which local partners are the main drivers of change in their communities.

Initial piloting of the model took place in 2 local communities with total population about 45,000 people; both communities use our solution after pilot. Now our team provides a pilot scaling (testing of scaling technology) in two other local communities from other regions with total population about 50,000 people. But it's still a pilot of the model to ensure target groups benefits and effective ways of scaling. Further growth needs in development of  special digital tools, business model, etc.

1. Solve’s recognition of our solution should be a very useful step toward growth and an excellent record for negotiations with potential partners.

3. Some financial support will also be very welcomed for our next tasks on the way to growth and sharing new opportunities and benefits for local communities in and outside Ukraine.

CTS combines governance tokens with the most potent post-invasion trend - citizen support for resistance in Ukraine. CTS adds value to the local communities' resilience due to the original redistribution of the decision-making power to people with governance (crypto) tokens following smart contracts. Our team considers this solution a hybrid of fintech and outreach strategy, which helps interested local communities get benefits that were unfeasible before. Financial institutions do not provide micro and small entrepreneurs with monetization of loyalty (funding&buyers); local authorities do not multiply benefits to local communities for the same budget. CTS helps to do it, and both aspects are crucial for strengthening local communities' resilience and successful post-war reconstruction in Ukraine.

People from other countries expressed interest in our solution to address their issues, which indicates its good potential to scale outside Ukraine.

Our vision of theory of change is available here 

CTS will help multiply local communities' benefits based on the more effective mobilisation of local resources, strengthening communities' unity, and developing their human and social capital. 

CTS will help strengthen the financial market in the niche of micro- and small entrepreneurs and startups with monetization of loyalty (funding&buyers), a service which is unavailable for traditional financial institutions.

Dashboard of the CRF’s progress indicators includes: number of self-managed CRFs, size of their capital ($), number of the engaged people by smart-contracts and size of their contributions as added value to public goods ($), number of served M(SM)Es by CRFs and their structure (% of vulnerable groups), "monetization of loyalty" index (three main types of M(SM)Es support by engaged people: potential buyers, informational supporters, other supporters of M(SM)es projects), loan repayment percentage, percentage of timely repayment of the loan.

First, our solution adds value to the local communities' resilience by redistributing the decision-making power to people with governance (crypto) tokens following smart contracts. It is an innovative idea. Its integration in different models provides great flexibility to the whole system to address different issues of specific target groups and ensure local context.

Further development of the CTS as an ecosystem and specific digital tools (including blockchain and AI) has excellent potential for developing various innovative solutions (out of this project stage).

It helped to increase the community's benefit by 4.5 times compared to the usual method (confirmation by officials) and provided a double benefit (funding and buyers due to the original mechanism  “monetization of loyalty”) to micro and small entrepreneurs. Up to 90% of people noted a high level of satisfaction from using our solution while piloting in local communities during survey by their local communities' authorities.

More details, data and evidence, feedback of local officials and people you can find in a record of the international web-conference hosted by the Global Fund for Community Foundations on pilot results here (it has timing in comments for your convenience).

It is an original decentralized model of the solution team (as a partnership network), which allows to integrate interested local stakeholders and residents (up to 4,000 people at this stage).

2 years: 1st year for CTS piloting, 2nd year for pilot scaling of the CTS models.

First of all, thank you for your link to your Diversity, Equity, and Inclusion Statement! After detailed acquaintance with it, I can state that our original decentralized model of the solution team ensures compliance with its values, principles and recommendations. 

Design of the business model for further project development is one of our reason to apply to MIT SOLVE.

During our pilot CTS were used within three options: B2C, B2B, B2G (correct answer to the next question).

Design of the business model for further project development is one of our reason to apply to MIT SOLVE.