Proposal for Community Mutual Funds

How to replace social welfare with communal insurance

How could a community establish their own emergency fund, be paid for having an insurance plan, benefit from specialized financial education, and have a mutual support system that functions better than current social welfare? Read below…

The Community Mutual Fund (hereafter, CMF) would be arranged in six segments.
1. VC fund
2. Established investments
3. Emergency fund
4. Community projects fund
5. Public goods projects fund
6. Communal Basic Income

1. Investing with your friends should be as easy as logging in to a smartphone app. VC should not be reserved just for VCs and wealthy angel investors. The VC fund is simply the segment of funds focused on higher risk, higher reward, and experimental investments. This could be investing in the business of someone in the community such as a member starting a business selling alpaca wool ponchos or invested in external businesses.

This may be achieved as a hackerhouse at the social layer, a syndicate for the legal layer, a DAO for the tech layer, or you might also consider this a lower barrier entry way to establish a credit union.

2. The investments in the VC fund that succeed then become established investments in segment two, which could consist of established real estate ventures, shares in index funds, successful companies, etc.

For both segment one and two, a treasurer for specific industries may be elected and release the investment plans each month where anyone may view it. The treasurer continues their business as usual unless someone objects and gains enough votes to veto a decision (more than 50%) and may also impeach a treasurer with more than 75% of the votes outside of normal election cycles. In order to be a treasurer, all personal finances should be revealed to the community in order to avoid conflicts of interest.
Many decisions may be resolved by consensus and conversation rather than votes as well and I am in favor of this operating at a small membership scale.

It is shocking how nonexistent financial education is in the USA and how one of the wealthiest countries in the world has almost half of its populace maintaining less than $400 in savings and a majority of lottery ticket winners end up far more broke or in debt a year after winning than before they received a massive pot of money. Everyone wishes to have peace of mind and financial freedom and many believe higher income would lead to this. Yes, it can. But only if people know how to invest.
But specialization exists in economies for a reason. Every single person doesn't need to know how to invest. Only one person needs a financial education in order for everyone in the group to benefit. It often takes just as much time to figure out the best way to invest $1000 as it does to invest $100,000. So the treasurer could simply be the person in your group of ten friends who best knows investing, even if that just means dumping 20% of everyone's income into an index fund that makes 8% interest per year, because that amount of knowledge is better than by far a majority of Americans' financial planning.
As the community scales, there may be one treasurer for real estate investments, one for VC investments, one for crypto investments, etc. We may harness the same amount of work and knowledge to disperse the benefits to an entire group, and then we may see our friends and our community growing and having stability, security, and a basis from which to explore and build better lives.
We need mutual support networks.
The GDP of the USA has 20Xed in the last 50 years, but the purchasing power of most Americans has barely increased 10%.
A lack of money is not the problem. It's figuring out how to share it.

3. Here's where it gets interesting. What if you could have an app where you can make money by owning an insurance plan rather than paying monthly premiums? Funds from segment 2 would flow into the emergency fund which could be established in the USA as a 501(c)15 Mutual Insurance Corporation, which means that you are your own insurance company fully compliant with Obamacare. If the fund is invested well, then instead of paying premiums you would be paid dividends for owning shares in this fund. Then when an emergency occurs, you may submit documentation and a vote will be held on whether or not to cover it. In many cases, the coverage documentation should clarify whether this qualifies under medical, dental, vehicle, home, travel, etc. As in any democratic system, risks do exist of populism and halo effects, however, a balance of both localistic personalized understanding and objectivity may be pursued. Each time a decision is made, it would be added as a precedent in the documentation in order to establish more consistency in coverage decisions.
In this way, every member would be a client, an underwriter, and an investor.
This would be insurance that you can understand. Instead of an opaque underwriting process, members may be available to explain their thought processes.
Because we are the institution, we perhaps would also be able to have this coverage extend globally. Imagine having a single provider who covers you consistently anywhere in the world? The demand for a service like this among digital nomads would be immense.
An AI chatbot may also be used as a smarter command F that answers your coverage questions and points out where in the documentation the relevant passages and precedents may be found. This also allows you to present your own argument to the group as to why something should be covered. I made this demo found here: (https://flow.multi.tech/app/canvas/rKZlp3DHj1BUi7UOiQgs/runs/live)

The next two to three segments would be the nonprofit arms of the fund.

4. The community projects fund could be for physical infrastructure for a community such as an outdoor shipping container gym (I loved using those when I trained in San Diego with the Marine Corps), or for building a website for the group, etc.

5. Public goods could be donations to charities or funding to build projects that help more than just one's own community, such as submitting a back of the napkin estimate with citations for the dollar cost per c02e conserved by donating to indigenous land rights organizations in the Amazon Jungle (which my friend told me he could forward to Oxford researchers for evaluation before adding it to presentations in partnership with science.org at hundreds of universities. I haven't found time to do this project and may post a bounty for it once I have more funds and have further built up viaprize.org)

Too many of my friends, particularly in Latin America, are scammed as someone collects a pool of funds and disappears. In this platform, no one could scoop up the funds and run away. The failsafe consists of proposals and votes for how to allocate funds, and a chunk of transactions might be voted on as a package as well as individual transactions being voted on before they are processed.
This could also become a default for nonprofits and social good funds, in particular if we add the ability to share a link to see their transactions that makes it as easy to share financial documentation as sharing a link to a google doc. I personally know pastors and missionaries in Ecuador who receive donations as they take pictures of poor children or indigenous peoples, then receive funds from churches in the USA and spend the money on nicer cars.

The technology has existed for years now, why do we still allow people to claim to be doing good things with our money behind opaque walls when transparency is readily available?

6. Assuming the fund is growing, then a portion of the APY would be released to members as a monthly dividend. In essence, this establishes a communal basic income in the style of universal basic income.

Thoughts on UBI (not essential to the overall CMF concept):
Calls for UBI are growing as a movement and are backed by numerous successful examples, such as GiveDirectly giving cash donations to the poorest people in Kenya and then being reviewed by third party evaluators as one of the most effective charities in existence. I believe this was the largest UBI program in history which began simply as a few students giving out a small number of $1000 payments as an experiment to individuals in Kenya before studying the results and being stunned to see the remarkable life quality improvement as recipients swapped out their thatched roofs for tin roofs in order to preserve food supplies from rain and thus improve nutrition thereby leading to an improvement in every other dimension including education and longevity. Then during the pandemic Gyeongi Province in Korea proved this concept on a large-scale governmental level as they issued payments of a few hundred dollars a month to residents through a debit card with funds which could only be spent on local businesses. Due to being able to track every transaction, they had remarkably accurate data to demonstrate how individuals spent money at mom and pop shops rather than McDonalds and the life quality and employment levels improved drastically, and the few people who left their jobs were usually to spend more time with their kids or to further their education. I believe the mayor of Gyeongi province ran for president of Korea on the platform of UBI and became a sort of Andrew Yang (who ran for president of the USA on the platform of UBI) of Korea.
However, UBI does not need to be established through a large-scale institution. It can begin with a group of friends. Oftentimes I see people with excellent ideas discouraged at the difficulty of enacting societal change, and a shocking number of times when you mention that we could just do it ourselves starting with our own community, the response is "oh yeah, I didn't think of that." There's a sense of individualism in the USA that I think sometimes leads us to forget: we don't need the government to enact UBI or other social welfare experiments. We can do it ourselves.
There are three concentric levels of humanity: individual, community, and society. I believe individuals feel disconnected from society because we forget the community which is the bridge between individuals and society.
Positive societal change is possible. It happens all the time. But it begins at the communal level.

Additional functionalities:
This platform may also include grants and bounties, both external facing and internal facing with the ability to switch from one to other being as easy as changing the permission settings like on a google doc.

This may be established as a DAO with smart contracts, easily visible transactions, and of course you can only withdraw your own shares and not anyone else's.

Due to the nature of some investments, a one month notice may be needed before withdrawing funds, and a lending segment may also be added (100% collateral with ethereum based tokens in order to receive that same amount as a loan is currently easy to implement.)

If scale is achieved, a bank with a fractional reserve system could be achieved. Of course, like any project where funds are held in trust this could also become a fractional reserve bank. But we don't need to do that and can keep it simple.

Social security for the elderly may also be released as a portion of dividends and any welfare program may be enacted through this platform so long as it continues to grow. The APY becomes the flex room within which you can operate and perhaps the community establishes a base line of 5% returns each year and any amount above that may be allocated to nonprofit investments.

Questions and challenges:
How do we make it as frictionless and as few clicks as possible to be able to have a fund set up so any group can do this with ease rather than setting up a complicated legal entity?

Would it be easy to set up the 501(c)15 as individuals start their communities as easily as making a new discord server?
My friend Joseph McKinney CEO of Catawba Native American special economic zone said he may be able to leverage their unique regulatory status to help make this happen.

Would Dework or Wonderverse or any DAO projects build this?

Conclusion:
This pitch describes an insurance company that offers better, clearer services and with more automation. Considering the insane amount traditional insurance companies make, this could be worth much more. Whoever builds this infrastructure may capture a multi-trillion dollar market while empowering communities to have practical, democratic, and safer mutual support systems.

If the framework is set up properly, then this infrastructure may function as your welfare network state.

My plan is to gain more experience co-founding viaprize.org crowdfunding bounty platform and continue visiting network states and charter cities over the next year, then either work in decentralizing AI or launch this project described above or join a team that is building something similar.