Cross-posting this from my newsletter, as it strikes me as a particularly useful idea - especially for those like me who hope to create new industrial exhibitions / World's Fairs:
How was the Great Exhibition of 1851 paid for? Unlike its national-level precursors in France, it was not a state-run event. Even more remarkably, its organisers also failed to raise anywhere near enough private subscriptions to cover their costs. Instead, they used something that called a “guarantee fund”.
Instead of asking for donations from supporters up-front, the organisers asked them to commit to covering the exhibitions potential losses up to certain amounts — to be paid only if the money was required. Based on the security provided by this crowdsourced guarantee fund, the organisers then raised an ordinary bank loan in order to get the cash they needed to actually hold the event. Crucially, the guarantors didn’t actually have to spend anything unless the event made a loss, and if the event broke even or even made a surplus thanks to ticket fees, then they would never spend a penny at all.
I discuss it in a bit more detail here, but I'd be keen to hear your thoughts on how it might be used. I have no doubt at all that it would be easier than ever to actually implement - certainly much easier than it was in the late nineteenth century.
Perhaps I should even mention it over on the Effective Altruist forums too, as it strikes me as an especially useful way to make more of people's assets. It's effectively a method of leveraging charitable donations, which was successfully used for at least over 80 years, but basically doesn't exist any more (I'm not yet sure why).
In terms of when it would be most useful, the key features as I see them would be in cases where the philanthropic project:
- Is capital-intensive
- Is likely to generate its own cost-covering income (this was all the rage in Victorian times, but less so now, perhaps explaining why it disappeared)
- Needs to be scaled rapidly / urgently
I've done something similar where I've asked for backstop funding for a project in case I wasn't able to get it funded elsewhere.
First thought: seems like the kind of thing you could use for vaccine development and manufacturing in a pandemic? (How does this relate to what the Gates Foundation did… didn't they fund manufacturing facilities for several vaccines, even in advance of knowing which one would work?)
Another potential application: carbon capture systems?
Carbon capture seems like a pretty good potential use, yeah. I hadn't thought of vaccine development, though I wonder if traditional finance may be better at that, as you'd marshal more resources promising people the upside too. Good question on the Gates Foundation, I'd be interested to know too.