# BFF Governance and Capital Allocation 5. BFF Governance and Capital Allocation 106 5.1 Key consideration: What are the values? 107 5.2 Key consideration: Who participates? 108 5.3 Key consideration: What frameworks, processes, and tools? 109 5.4 Key aim: Work to shift power imbalances 110 5.5 Key aim: Work with existing authorities 111 5.6 Key aim: Build right relationship with other BFFs across regions 111 and scales -> 5. BFF Governance and Capital Allocation The governance structure of BFFs underpins their ability to both decentralize financial resource governance and catalyze the transition to a regenerative economy. As BFFs represent an intentional attempt to encode an institution with worldviews, values, logic, and context that are fundamentally distinct from those of existing financial institutions, governance will be a challenging area requiring great care and collective experimentation. The assumptions and habits of governance learned through participation in traditional institutions may not serve BFFs, and both intra- and interpersonal friction in the learning process will likely emerge. It is critical for BFFs to cultivate a healthy unlearning/learning culture where they can carefully consider and experiment with what values are encoded in their governance, who participates, and what frameworks, processes, and tools are applied. At the highest level, we encourage BFFs to implement an inclusive, participatory governance structure that represents the bioregion and is built upon a solid relational foundation of trust. BFFs governance design does not emerge from a vacuum, but rather from the rich context of the learnings and relationships built throughout bioregional organizing efforts and the creation of a Bioregional Regeneration Strategy, which can clarify specific, place-based understandings of the values that are to be upheld governance. In particular, we recommend careful consideration of the “R Values” that many Indigenous communities center in their governance (Section 4.1).11 We offer many proven and emergent frameworks, processes, and tools that can support BFFs in both governance design and practice. Finally, we encourage BFFs to explicitly design their governance towards three key aims: shift power imbalances, work with existing authorities, and build right relationship with other BFFs across regions and scales. This is hard, messy work with no easy answers that fit all contexts. However, we trust that through experiments in creating BFFs around the world, the collective intelligence of place can be harnessed to inform and support an entire network of BFFs – allowing common patterns of trustworthy governance structures to emerge. role in governance design.218 In particular, we highlight that given the complexity and delicacy of governance, BFFs can only succeed if built on a solid relational foundation that creates a culture of trust. 5.2 Key consideration: Who participates? The Bioregional Organizing Team will organize and activate key bioregional actors, and identify appropriate bioregional representatives to serve in BFF governance. There are pros and cons in taking a more democratic approach, so BFFs may want to consider an approach of progressive decentralization, where a Bioregional Organizing Team might decide to pursue something more open after a given BFF has a solid foundation. A participatory process to identify trusted actors in the ecosystem (including through leveraging Web3 technologies) can play a role. To sincerely “represent the bioregion”, the management, board, investment committee, and participatory processes that feed into the capital allocation should be representative of the people living and working in the bioregion, and the people that have historically stewarded land in the bioregion (if they have been misplaced). We strongly recommend that the board be ethnically and culturally representative of bioregional residents and, particularly, that Indigenous groups are represented in the places where they reside.219 This is important, as Indigenous representatives will bring wisdom from centuries of regenerative land stewardship, relational worldviews focused on kinship, and life-centered theories of value. Additionally, a process should be established to receive regular input from both youth and elders. Additional processes might be established to ensure other underrepresented groups have a voice – including low-income, previously incarcerated, otherly- abled, LGBTQIA+ people, ethnic minorities, refugees, and others. This diversity will be beneficial for cultivating the collective intelligence needed to effectively drive financial capital to regeneration. We strongly recommend that governance boards rotate periodically in order to bring new energy and ideas to BFFs. For the board in particular, a town hall or election could be held to select members. We also recommend the inclusion of representatives for more-than-human life on BFF boards to ensure that the financial capital raised is not used to narrowly serve human interests, but is allocated to serve all of the life in the bioregion. There is a growing body of work around rights of nature and how nature can be given jurisdictional rights. Species and geological or hydrological features (e.g. rivers and mountains) are also being placed on boards through human proxies and even own assets (more about this in the case study on Regen Network).220 Technical expertise and relationships with key stakeholders will also be important enablers for effective BFF governance. BFF management teams must be bridge builders – understanding economics, finance, systems change, as well as having a connection to local context, risks, and opportunities. Team members are likely Transcontextual – The to be transdisciplinary experts who can perceive and act transcontextually, recognition that complex navigate diverse theories of value, and oversee an integrated approach to data systems do not exist in single contexts, but rather are formed between multiple contexts that overlap in 218 For example: relationality, reciprocity, responsibility, respect, reverence, regeneration, redistribution, and reconnection living communication and 219 Indigenous Commons, a group of diverse Indigenous representatives working to get more capital governed by among living systems. “Warm Indigenous groups, has developed a set of principles for capital management based on wisdom from a range of Data” can be defined as: Indigenous traditions around the world. Transcontextual information 220 Earth Law Center has a public library of rights of nature templates of laws, resolutions, letters and other legal about the interrelationships instruments that can be used to support representative governance of BFFs. that integrate a complex 221 The International Bateson Institute: Warm Data Labs. system.221 management. The BFF management team should be adept at using software tools – including the latest nature MRV, community engagement, and participatory budgeting software. Governance representatives should also be long-term thinkers, as they will be making investment decisions that should align with a 20-100+ year or multigenerational Bioregional Regeneration Strategy. Selecting the right people for these positions is critical in ensuring that BFFs can effectively serve as connective tissue. Another consideration for BFF governance is the interplay between public and expert forums. Public forums should be a place for free expression and, therefore, not dominated by experts, while expert forums222 should provide latitude for experts to exchange specialized knowledge without having to conform to popular opinion or to cultivate a following. BFF governance processes should support this balance, and the integration of voices from both the public and experts can help ensure that decisions are data-driven, account for stakeholder needs, and are democratically legitimate.223 5.3 Key consideration: What frameworks, processes, and tools? A wide range of frameworks can be applied to support the implementation of an “inclusive, participatory governance structure that represents the bioregion.” We offer no prescriptions here, besides strongly recommending study of place-based Indigenous governance frameworks and commons management frameworks – including Elinor Ostrom’s 8 Principles for Managing a Commons. However, several frameworks that may be useful in establishing a governance structure include: — Prosocial, a scientific framework (built upon Ostrom’s foundational research) and guided process for designing governance structures that support cooperative behavior — Sociocracy and Holacracy, two similar systems that support self-governance and decentralization224 — Traditional hierarchical structures with checks & balances (e.g. wisdom/elder councils, purpose guardians/trustees) Regarding processes, each BFF will need systems in place to enable transparency and responsiveness around capital raising and allocation. To the extent possible, BFFs should seek to make documents about these processeses public. Decision criteria about which projects are selected and why should be published. Tools such as Open Collective, “a fundraising + legal status + money management platform for grassroots groups,” can support these efforts in their early stages. The affiliations of the board, investment committee, and management of BFFs should be disclosed, so conflicts of interest can be identified and addressed as appropriate. Additionally, BFFs should be responsive to the requests and recommendations of the public. BFFs should enable empowered participation – recognizing that all citizens of 222 More information on this in Block Science: Arbitrum Expert Service Provider Network Program Development. 223 Credit to Jessica Zartler, Block Science. 224 “Holacracy is one form of sociocracy. While sociocracy leaves a lot of room for many parameters to be set by the individual organization, Holacracy comes with a lot of pre-set parameters.” (Sociocracy For All: Sociocracy and Holacracy: Sameness and differences). the bioregion have a right to shape the decisions about the future of their place. For example, citizens assembled might play an important role early in the BFF strategy process. Later on, BFFs might host town hall meetings at regular intervals in order to hear about urgent investment needs directly from community members before making grant or investment decisions or to get feedback on the impact of investments. Innovative social methodologies and tools for collective decision-making that may support the design and execution of broader governance structures include: — Liquid Democracy, “a form of delegative democracy, whereby an electorate engages in collective decision-making through direct participation and dynamic representation.”225 The non-profit Liquid Democracy provides open-source tools to support such processes. — Participatory budgeting through an Edge Prize-inspired model — Emerging tech that allows for real-time preference signaling (such as Quadratic Voting and Conviction Voting). — Novel voting delegation mechanisms (e.g. Neural Quorum Governance).226 — “Two Eyed Seeing” – a concept from the Acadia and Eskasoni Nations integrating Indigenous wisdom and Western Science.227 — Systems for sourcing and privileging contextual data based on social relationships of trust. For example, the opinions of trusted subject-matter experts and place-based representatives can be highlighted in the discussion of issues, which may support finding common ground and weighing of trade-offs. If using a voting system, their votes could carry more weight.228 — Polis, “a real-time system for gathering, analyzing and understanding what large groups of people think in their own words, enabled by advanced statistics and machine learning.” — RadicalxChange, a platform that provides tools that support participatory and pluralistic funding, voting and ownership structures. — Convergent Facilitation, “a decision-making process designed to build trust across differences and integrate what's important to everyone involved.” 5.4 Key aim: Work to shift power imbalances Shifting power imbalances requires BFF management and board members to see, understand, and commit to addressing these imbalances among themselves, with citizens in the bioregion, and between financial capital holders and regenerators. To do this, they must embrace this work as a collective learning and unlearning – recognizing how their worldview and life experience have shaped them. For those holding substantial financial capital or financial and legal expertise, their ways of thinking, communicating, and acting, both consciously and unconsciously, are likely 225 Wikipedia: Liquid democracy 226 Block Science: Introducing Neural Quorum Governance 227 More details here: Two-Eyed Seeing: Current approaches, and discussion of medical applications. 228 This can be done without the use of digital technology, and many Web3 efforts are underway to support such efforts; In their 2022 paper, Etheruem Co-founder Vitalik Buterin and others “illustrate how non-transferable “soulbound” tokens (SBTs) representing the commitments, credentials, and affiliations of “Souls” [i.e. unique, identity-protected individuals] can encode the trust networks of the real economy to establish provenance and reputation.” (Olhaver, Weyl, and Buterin: Decentralized Society: Finding Web3's Soul) to have been crafted in part by learning how to “succeed” in navigating dominant systems of power. These learned traits may present challenges in a diverse group orienting around alternative value systems, especially in conversations of money and governance. Thus, it is critical that BFFs intentionally work to foster a healthy learning culture with a shared commitment to engaging in discussions about shifting power imbalances openly, humbly, and with care. Employing professional facilitators and educators, along with broader engagement with the BioFi Community of Practice (see attribute #12 in Section 4.1), can help establish and maintain this culture. BFFs can also take steps to structure governance to prevent incentives that might put profits over purpose and compromise the BFF’s ability to serve the Bioregional Regeneration Strategy. For example, operating governance can be separated from governance of the distribution of profits, so that those overseeing operations are not tempted to drive profits over purpose. 5.5 Key aim: Work with existing authorities BFFs and Bioregional Organizing Teams can partner and support existing public work that is aligned with the Bioregional Regeneration Strategy and receives aligned public funding to educate and advocate to local authorities in areas where they see gaps in public programs; mobilize resources for critical activities when Partner state – Multi- local authorities are failing to do so; and act as a ‘partner state’ over time.229 stakeholder cooperatives While bioregional governance, capacity building resources, and financing facilities or commons-based are under development, national and sub-national authorities continue to hold institutions responsible for the management and provision of the majority of these resources and management responsibilities. Therefore, certain public goods, common knowledge of public programs and procedures can support BFF management assets, or services that were and boards in effectively raising and allocating financial capital or other resources once the responsibility of through existing publicly-funded programs. For example, in the United States, state governments, which knowledge of how to access public finance allocated through the Inflation Reduction instead provide funding and Act will be critical. BFFs can also work with authorities to collaboratively develop performance evaluation to partner states.230 strategies for devolving decision making around resource allocation to bioregional entities. This has been done with watershed authorities in many places globally, including Washington and Oregon in the US, New Zealand, and Australia. Similarly, Costa Rica has Territorial Councils. 5.6 Key aim: Build right relationship with other BFFs across regions and scales Bioregionalism is about appropriate alignment with the natural systems and cultures of a region. The understanding that bioregions are interdependent with each other and contain within them many scales of natural systems and cultures is fundamental to achieving appropriate alignment. For example, rivers often cross multiple bioregions that each have fractal watersheds and distinct cultural regions, all of which are interdependent with the river. Appropriately allocating financial 229 Credit to Lawrence Grodeska of the Bay Delta Trust. 230 P2P Foundation Wiki: Partner State resources to support the regeneration of the river and its interdependent regions simply cannot be done by a single institution. For BFFs to effectively fulfill the vision of planetary regeneration, they must be able to govern in right relationship with each other. In some cases BFFs may form relationships of solidarity, deciding to share resources — and their governance — towards interdependent aims. In other cases, BFFs may identify the need to invest in the creation of additional BFFs at higher or lower scales so that resources can be governed and distributed fractally. These are only two possibilities; there is no theoretically ideal prescription that can be offered today for what these right relationships should be, as it will depend entirely upon the emergent capacity in each area. At this early stage, however, it is critical that BFFs are designed with this fundamental entanglement in mind, and that they seek to build relationships of trust with other relevant BFFs and emerging Bioregional Hubs, such that healthy conditions for gradual experimentation towards shared, interoperable governance in right relationship are established.  6. Innovative Mechanisms for Financing Bioregional Regeneration  6. Innovative Mechanisms for Financing Bioregional Regeneration There are a range of innovative financing mechanisms that we believe can help BFFs achieve their objectives. Many of the themes explored in this book are aligned with the values and patterns driving the decentralized finance or “DeFi” movement. The authors believe that the potential of existing protocols, tools, technologies, and templates in the Web3 space to bolster the bioregional movement and supercharge grassroots regeneration, has – as yet – not been realized. Additionally, there is potential for further innovation, building on what has been learned in Web3 to date and what we have laid out with the objectives, attributes, and templates of BFFs. The BioFi x DeFi intersection provides fertile soil for experimentation. In this section, we explore a range of innovative financial tools and approaches (in the DeFi space enable participatory capital allocation, and support the transition to regenerative bioregional economies. Some areas we would like to see further innovation and experimentation include: bioregional Nature-based Currencies, bioregional participatory capital allocation (including through Quadratic Voting or Quadratic Funding), and the construction of Ecological Institutions for ecosystems or species to support their regeneration and sovereignty. 6.1 Web3-based eco-credits, Decentralized Autonomous Organizations, and Ecological Institutions Web3-based eco-credits, Decentralized Autonomous Organizations (DAOs), and Ecological Institutions present innovative tools for financing bioregional regeneration efforts. Web3-based eco-credits, built on blockchain or Holochain231 231 While similar to blockchain in using cryptography to create a distributed ledger for decentralized data management, Holochain is designed to empower peer-to-peer coordination and agreement customization while yielding greater efficiency and scalability by avoiding blockchain’s dependence on a single universal system state across all participating computers. (HOLO: Here’s Holochain in 100, 200, and 500 words)