At Handprint, we are committed to facilitating and generating real-world impact. Yet, given the diversity of projects we support, ensuring that all impacts are indeed real is a complex endeavor. So, how do we do it? We are building our impact engine with six complementary drivers of trust that jointly form the acronym ‘SAFEST’:
Before onboarding a project on the platform, we do our own due diligence process to ensure the impact partner is credible, the project is real, and the potential of the project to generate positive impact efficiently is high.
This involves interviews with the impact partner leaders, document exchange and verification, and assessing the track record of the partner. We build long-term relationships with the partners on our platform, which creates interpersonal and inter-organizational trust.
Not only do we automate positive impact contributions with our plugins, but we also automate the reporting of the eventual outcomes. Our goal is to integrate automatic impact reporting into as many impact services as possible. Automation reduces the risk of human error or the deliberate underreporting of damage (or over-reporting of positive outcomes).
As Handprint evolves, more and more metrics will be provided by third parties. This can help measure and monitor projects on our behalf and automatically insert the data into the Handprint platform.
We ask our impact partners to be transparent about the financial flows that support their activities. Our impact app empowers local employees to confirm receipt of funds, even if they do not have a bank account, and this helps assess the validity and effectiveness of the money flows.
For all our projects, we also think hard about the tangible flows they enable and how we can make sure the reported flows are real. One example of forestry is that we build carbon buffers by estimating carbon absorption potential conservatively so that we do not overpromise sequestration. For plastic removal, the resulting flow is either landfilled safely or recycled, and the quantities of each appear on official invoices, which provide additional evidence of the flow.
Handprint generates slow-drip funding for many partners and projects all over the world. While impact partners are commonly funded by large donors or governments, resulting in sudden and significant cash disbursement, our system protects against opportunism by creating repeated smaller funding streams. Impact partners risk losing significant future revenue if they were to deceive us.
Structurally, our system thus creates long-term incentivize alignment which reduces the risks of moral hazard.
Social impact reporting
Using the same impact app, people on the ground can report on the actual impacts that are being created. This involves pictures of the projects on the ground, and how these evolve over time. These pictures are made available to our clients on the dashboard. For some of our partners, this social verification is enhanced by third party certification. E.g., the quantities of plastic removed from Bintan by Seven Clean Seas’ crew are validated by government officials.
For other projects, social verification may involve long-term testimonials (e.g., of students who follow an education program supported through Handprint). In the future, our impact app will also enable reporting of on-the-ground measurements and quantities of flow observed by local communities. The provision of these metrics can be connected to game-theoretic approaches which can almost eliminate the risk of false reporting.
Handprint is developing, either in-house or in collaboration with partners, ways to verify impact through independent technology as well. For instance, we are experimenting with remote sensing and machine learning to measure carbon sequestration in mangrove forests. We can use pictures or even video material of ocean clean-ups to make independent estimates of how much plastic has been removed.
This is the trajectory we are on. This also means that we will onboard projects that do not have external certification (e.g., reforestation projects without certified carbon credits from Verra, Gold Standard, or Plan Vivo). The reason we dare to include such projects is because of the presence of all the other trust pillars.
Moreover, we are also always thinking about the cost and scale tradeoff. External certification is currently also very expensive, which creates a possible impact deficit. If a small-scale reforestation project would cost 40,000 USD to fund but another 40,000 to get verified, we prefer to spend more money putting trees in the ground. This also allows us to build impact buffers as mentioned before.
In an ideal world, we could guarantee that all impact we report to be 100% true. However, the cost of achieving that level of certainty is too high. Because our impact contributions cannot be traded in a secondary market, external certification (involving third party audits and so) may be a luxury we do not need and the world cannot afford.