Funding
How to link awards to funding pools and manage them
Overview
Award Funding is a powerful mechanism for driving user acquisition, engagement, and retention.
Both Funded Units, as well as Status & Badges, can be associated with a funding pool. This means that holders of these awards will be paid out some share of the funding pool on a specified date or frequency.
This section walks through how to link awards to a funding pool, how to determine the size of the funding pool, the mechanism by which this pool will be funded, and the date and frequency that holders of these awards will receive payment.
Whether you are rewarding top performers with periodic bonuses, creating revenue share models or creator funds, Village’s award funding mechanism is a powerful tool to increase engagement and retention.
Example: A ride-sharing platform creates a funding pool to reward drivers for completing rides, achieving high ratings, or working during peak hours. In this scenario, funded units are called 'Drive Points'. Every completed ride earns a driver 1 Drive Point, while a 5-star rating earns them 2 Drive Points. A driver's accumulated Drive Points entitle them to a share of a pre-defined bonus pool that is determined by the total number of trips taken on the platform, at the end of the payout period. This ties the driver's incentives to overall platform growth and service quality.
Use Cases
Revenue Share: An incentive structure that can be created to pay users a percentage of revenue generated on a platform in a given period, proportionate to the total funded awards held.
Users receive medallions for positive actions they do on the platform. 1% of all platform revenue is distributed to medallion holders each month, as long as they continue to be active
Users in Power Status receive 1 revenue share unit for every 100 trips they complete on the platform. Each month, the total pool is distributed among revenue share unit holders
Bonus Pools: An incentive structure that can pay out a percentage of a fixed bonus pool proportionate to the total funded awards held.
Each month, a company Awards $100,000 to top employees. Employees receive points based on tasks fulfilled and other valuable actions and the pool is distributed proportionate to total points held each month.
Creator Fund: An incentive structure that can pay out a percentage of the fixed or variable bonus pool, proportionate to the total value brought to the platform by a creator.
An edtech company allocates 20% of total subscription revenue into a creator fund. Each quarter, top creators are Awarded a share of this pool based on how many times their content was accessed or engaged with.
Awards that can be associated with funding pools
Funded Units
Funded units are a type of non-monetary award. Each funded unit entitles a user to a proportionate share of an associated funding pool. The share per unit is calculated based on the total pool size for a given payout divided by the total units distributed.
Status & Badges
Similarly, you’re able to associate a funding pool with a status or badge award. This functions in the same way as a funded unit; the total payout that a holder of a status or badge is entitled to is determined by the total funding pool size divided by the total number of users who hold that status or badge.
Example: A food delivery platform wants to create a strong partnership with its highest volume restaurant partners. The platform creates a pool that is funded by $0.02 for every $1 GMV processed on the platform. The restaurant only wants this 2% revenue pool to be shared by the top 1% of restaurants, ranked by GMV generated. First, the platform creates a top 1% status by using a percentile-based goal that places the top 1% of restaurants by GMV generated over a period into the 1% status. Next it funds this status by associating the status with the 2% funding pool it created.
Determining the size of the funding pool
There are two ways that you can determine the size of a funding pool:
Fixed funding: when creating a funding pool, you’re able to specify a fixed funding amount that will be added to the funding pool. This can be used in conjunction with variable funding below (as a minimum contribution to the pool), or be the only source of funding so as to create a total fixed bonus pool. For example, a platform can create a fixed monthly bonus of $5,000 distributed among award holders.
Variable funding: alternatively, you can create variable funding rules which will fund the pool based on actions or other triggers on the platform. These funding rules are created, and function in a similar way to other rules within Village. For instance, a certain percentage of every sale or transaction could be contributed to a funding pool, or you might contribute a fixed amount per action taken on the platform by all or a subset of users, for example, $1 for every trip taken on the platform.
Combination: you're able to specify a fixed funding amount, in addition to any variable rules that you create.
Example: An online delivery platform sets up a 'Delivery Bonus Pool'. For each delivery completed, the platform contributes $0.25 to the pool. At the end of each week, the total pool is distributed among the delivery personnel based on the number of 'Delivery Points' they've earned for things like on-time and 5-star rated deliveries. This can motivate delivery personnel to complete more deliveries and improve service quality.
Payouts
Frequency
When creating a funding pool, you specify the frequency —daily, weekly, monthly, quarterly, or annually— and / or date that a funding pool will payout to award holders.
Payout Value
Because the size of the pool and the number of associated funded units may change up to the point of payout, the final value of any given funded unit (and therefore payout amount) may vary until the point of payout.
However, the implied value of any given unit is the total current funding pool size divided by the total associated units distributed. The implied value of a funded award - the current value of the payout that a user will be entitled to on the payout date, so long as they remain active on the platform - is displayed to award holders in the end user dashboard. This is a strong motivator to holders to both increase the total size of the funding pool, as well as maintaining engagement with the platform.
Award Expiration
Depending on whether an expiration period is defined for a funded award, none, some or all of a funded award that a user holds will carry across different payout periods. This will be a function of the rolling expiration period set at the award level. It's important to consider the interaction between the payout schedule and award expiration.
Mandated expiration: Please note, there is a mandated bulk expiration on funded awards after 180 days of inactivity.
Creating a Funding Pool
In the 'Funding' section, click 'Create Funding' (the purple button on the right-hand side). This will open the 'Create Funding' page.
There are a number of inputs and optional conditions when creating an award that we walk through in detail below.
Linked Award
Select the award that you want to fund from your existing awards.
Remember, the only awards that can be funded on the Village platform are non-monetary funded units as well as status or badges.
If you do not see any awards here, it means you need to create an award that is able to be funded.
If you see an award grayed out here, it means that you have already created award funding rules for that award and you should instead edit the existing rules.
Distributed Award
The denomination of the award that will be paid out. Usually this will be cash, but a pool can also payout points or other non-monetary awards.
For example, you might have a 10,000 point bonus each month. Users earn badges (linked award) to earn a share of the bonus. At the end of the month, users get paid out a share of the 10,000 points (the distributed award) proportionate to how many badges they hold versus the total badges held.
Active Date Conditions
After selecting the award to be funded, specify the active dates during which this funding program should be active. Note that funding will only be paid out at the frequency you set and as long as it is within the active dates. If you want the payouts to continue indefinitely, do not set any active date conditions.
Payout Frequency
Next, choose the payout frequency for your funding. This can be set as:
Daily
Weekly
Monthly
Quarterly
Annually
Custom Frequency
When you select 'Custom Frequency', a modal will open that allows you to distribute funding every 'X' [Period], starting on a specific date.
Max Payout
This optional setting allows you to cap the amount of funding that goes into the pool, either on a per-action or per-user basis. It also lets you limit the amount of funding based on a total amount per time period, or alternatively, a total amount per user per time period. The following options are available:
Per Action
Per Day
Per User per Day
Per Week
Per User per Week
Per Month
Per User per Month
Per Quarter
Per User per Quarter
Contributing Segments
This setting is useful when you want to fund a pool based on the actions of a specific group of users, instead of all users on your network. Set the 'Contributing Segment' restriction to only include the users whose actions you want to contribute to the funding of this pool. You can also specify segments whose users you do not want to contribute to the funding pool.
Funding Type
There are two ways to fund a pool - Fixed and Variable. Both fixed and variable funding can also be used in tandem.
Fixed Funding: If you'd like the size of the pool to remain constant, enter the fixed funding amount per period, for example, $5,000 per period and do not create any variable funding rules.
Variable Funding: If you'd like to set up variable funding rules (i.e., a certain amount of funding per action), use variable funding rules. If you only wish to use variable funding rules, do not enter a fixed funding amount. Please note that you can use both variable and fixed funding rules in tandem, in this case the total funding amount will sum the total fixed funding amount in addition to any funding from variable funding rules that have been executed.
Creating Variable Funding Rules
Variable funding rules function in the same way as other rules on the Village platform. Just like with other rules, variable funding rules require a trigger to be specified, and can be restricted by optional conditions. When the trigger and conditions are satisfied, it will execute the rule and the specified variable funding amount will be contributed into the funding pool.
For example, if you wanted to contribute $1 into a funding pool per peak hour delivery, you would create a peak hour delivery variable funding rule where the trigger was a peak hour delivery, and the contribution amount was $1.
You can create as many variable funding rules as you like. Note that when you create these rules, they will initially be in draft state, and you will need to launch these rules before they actively contribute to the funding pool.
Creating Variable Funding Rules
To create a funding rule, go to the funding detail page and click the purple 'Create Funding Rule' button. This will add a new row in the 'Draft Rules' tab. Below are the inputs you'll need to specify for a rule to function:
Name
Give the rule a specific name for easy identification
Type
Choose the type of trigger for the rule: Action, Goal, Sale, or Connection
Trigger
Define what will trigger the rule. The dropdown contains existing triggers that are eligible for this funding rule. If you don’t see any triggers here, you’ll need to create a trigger.
Amount
Define the funding amount per trigger
As with rules elsewhere on the Village platform, you can also add rule-level conditions to this variable funding rule. Remember that these are optional conditions, and you can create rules without specifying any or all of them. However, they provide a higher degree of control over how and when your funding rules apply. Rule-level conditions are as follows:
Active Dates
Specify the period during which this variable funding rule will be active.
Max Payout
Set limits on the funding amount that this rule can contribute. This can be specified in several ways:
Total Amount
Amount per User
Per Action
Per Day
Per User per Day
Per Week
Per User per Week
Per Month
Per User per Month
Per Quarter
Per User per Quarter
Contributing Segments
The Contributing Segment condition defines which group of users' actions will contribute to the funding of the pool. For example, if you only want trips taken by your 'Power Driver' segment to contribute the variable funding amount to your funding pool, make sure that you specify the 'Power Driver' segment as a contributing segment in this condition. To exclude a certain segment from contributing to the funding pool, use the 'Not in’ segment logic in this condition.
Launching, Editing, Deleting Variable Funding Rule
To launch a variable funding rule, click the green 'Launch' button next to the draft rule. Once the rule is active, it will be evaluated whenever triggered and will contribute to the funding of the award when the evaluation is successful.
To edit an active rule, click the 'Edit' button. Be mindful that this will impact any funding currently contributing to a payout as part of this rule set.
To delete a rule, click the red 'Trash' icon.
Editing, Duplicating, Deleting Award Funding
Navigate to the 'Funding' page to manage these settings:
To edit the overall details of an award funding, click 'Manage'. This takes you to the 'Funding Detail' page, where you can edit the overall funding conditions or any individual funding rules.
You can also duplicate or delete funding programs using the corresponding the purple duplicate icon, or the red trash icon respectively.
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