How trust drives resource commitments

Ostrom’s Law in Action For decades, mainstream economists pushed the idea (and still do) that shared resources must be privatized or controlled by the state to prevent overuse. The dominant fear? The so-called “Tragedy of the Commons”—where people deplete shared resources due to self-interest. But Elinor Ostrom proved them wrong. 🔹 Ostrom’s Law: “A resource arrangement that works in practice can work in theory.” This principle wasn’t coined by Ostrom herself—it was named in her honor by scholars who saw how her research overturned traditional economic assumptions. She demonstrated that communities worldwide have successfully managed common resources for centuries—without centralized control. Her work, which earned her the Nobel Prize in Economics in 2009, showed that self-governance, local rules, and social trust create sustainable economies, independent of external control. Before money became the dominant medium of exchange, communities thrived using commitment-based economies—systems where trust, labor-sharing, and reciprocal exchange sustained livelihoods. Commitment Pooling, as practiced in Grassroots Economics, revives these traditions by structuring resource-sharing agreements where people contribute labor, goods, or services into community-led pools. These systems didn’t collapse from overuse—instead, they thrived for generations because social accountability and trust replaced top-down enforcement. ✅ Communities create their own rules for managing shared resources—customized to their realities. (Grassroots Economics pools operate through local agreements rather than imposed regulations.) ✅ The "Tragedy of the Commons" doesn’t happen when clear rules, trust, and accountability exist. (Commitment Pools use rotational labor, mutual credit, and resource limitations to maintain balance.) ✅ Reputation and relationships matter more than external enforcement. (People honor commitments because they are socially accountable to their community.) ✅ Top-down economic policies fail to recognize local needs, but community governance adapts efficiently. (Commitment Pools respond to real-time conditions, unlike rigid financial systems.) ✅ Technology can enhance these traditional structures. (Blockchain tools like Sarafu.Network track commitments transparently, ensuring trust at scale.) Ostrom’s Law tells us that real-world solutions should guide economic theory, not the other way around. Grassroots Economics is proving this today—using ancient economic structures combined with modern digital tools to build resilient, decentralized economies. 💡 The future isn’t about top-down control—it’s about communities reclaiming economic sovereignty, one commitment at a time. 🔥 How do you see Ostrom’s insights shaping today’s decentralized economies? Let’s discuss! ⬇️ #OstromsLaw #GrassrootsEconomics #CommitmentPooling #CommunityWealth #RegenerativeEconomics

Call it the “X factor.” Engaged donors give more. That’s the key insight from research Ron Cohen and I did on the connection between engagement and giving. According to data from surveys of nearly 10,000 donors, those who feel highly engaged with an organization—defined as frequently meeting with people related to and feeling valued by the organization—give at significantly higher levels. In fact, the most engaged donors give at up to 5 times the rate of donors overall. For organizations focused on fundraising, engagement with donors and constituents dramatically multiplies giving over time. Donor engagement is the X factor that significantly boosts giving from key donor groups: • Gifts under $1,000: Highly engaged donors gave at 1.2 times the rate of all donors. • Gifts $2,500-$9,999: Highly engaged donors gave at 2 times the rate of all donors. • Gifts $10,000-$24,999: Highly engaged donors gave at 3 times the rate of all donors. • Gifts $25,000-$49,999: Highly engaged donors gave at 4 times the rate of all donors. • Gifts $50,000 and up: Highly engaged donors gave at 5 times the rate of all donors. The more an organization can cultivate engagement, the more it will see giving increase over time, especially among mid-level and major donors. The key is focusing on the three elements of trust that drive engagement: Credibility, Reliability, and Intimacy. This means communicating transparently and consistently, following through on promises, and personalizing interactions. Donors who trust an organization, talk about it, and feel valued will become partners in its mission. While tactics like increasing call volumes or events may boost short-term dollars, engagement builds lifetime value and transforms donors into advocates and ambassadors. For long-term funding, engagement is the strategic “X factor” that multiplies giving across the donor pyramid. Nonprofits that make engagement a priority will thrive. Those that don’t risk being left behind.

Leaders launching programs without trust are building dream homes on unstable ground. Trust forms the solid foundation that makes all other leadership efforts possible. Without it, every program—no matter how innovative—collapses under pressure. Think of trust as your organization's shock absorber. When market conditions shift, strategies pivot, or difficult decisions arise, trust ensures your team adapts rather than fractures. Without established trust, even your best initiatives quickly lose credibility: • An innovative employee-experience project feels superficial. • Conscious leadership training is dismissed as performative. • New DEI efforts are viewed cynically as compliance exercises. Building trust doesn't require complex theories—just consistent, predictable actions: • Clearly outline what's coming next quarter, and then deliver exactly as promised. • Regularly communicate updates, maintaining transparency even during quiet periods. • Address unavoidable changes openly, providing clear context and sufficient notice. I've seen this approach succeed repeatedly. One executive team facing significant distrust after leadership turnover made three clear promises for Q1. They met each commitment exactly as promised and communicated the results transparently. Within two quarters, their trust metrics improved by 12%. Start simply: Commit to one concrete action your team can count on in the next month—and follow through precisely. Invest first in trust. Every other initiative depends entirely upon it.