Collaborative budgeting and funding is not a new practice. It has its origins in its application in the field of civic engagement, to tap into the collective intelligence of local citizens to decide how to allocate municipal funds. The first documented participatory budgeting took place in Porto Alegre, Brazil in 1989, to give citizens a stronger voice in political decision making.

Today, a new generation of organizations, including networks and traditional businesses, are applying this practice to enable their members or employees to participate in transparent budget allocation.

In product or service companies the decisions often concern how to value individual contributions, and how to budget for work and other purchases. What projects should be funded? How much should a contributor be paid for hosting an event or upgrading software? What should the process for verifying and evaluating work be? Without a central authority who makes these decisions and where information flows to and decisions flow from, agents (stakeholders) must make these decisions themselves.

Budget governance is an essential pillar part of running a DAO. There are multiple pillars of a DAO and- governance of the treasury is the most important first step. By giving stakeholders full insight and control over the whole, or a proportion, of the treasury from the beginning you are enabling them to deeply care about the health of that treasury and of the organization.

Alchemy

Alchemy is a budgeting and resource-allocation tool for decentralized organizations that runs on the DAOstack. It is an interface that enables an unlimited number of individuals to coordinate towards a common purpose, by proposing and deciding on how to spend funds in alignment with goals and values.

The Alchemy platform, whose alpha launched in May 2018, includes a modular smart contract framework, a JavaScript developer environment, and a user interface that allows anyone to create or participate in a decentralized organization without technical knowledge.