Recurring vs Changing Categorisations

Comparing the differences between recurring and changing funding categorisations

Funding categorisation can be recurring when it is well defined and repeatedly used in each funding round. Alternatively categorisation can also be always changing where new categorisation approaches are defined and used each round.

Recurring categorisation

Recurring categorisation means looking to make sensible groupings of similar focus areas that are well defined. These categorisations can be used on a recurring basis in every funding round. Recurring categorisation would still be changed over time, but the aim would be only to change the categorisations when necessary.

Changing categorisation

Changing categorisation looks to introduce a new groupings of focus areas for funding each funding round. This is not to say similar categorisation couldn't be used again but instead that categorisation would compete again to be used and can be redefined or updated as part of the funding process.

Factors to consider

• Budget weighting complexity - What complexity is there for deciding budgets that should be applied to each of the funding categorisations? How difficult is it or how long will it take to produce a well informed outcome?

• Directing funding - How effective is the categorisation for directing funding to certain focus areas?

• Proposer effort - How much effort is required by the proposer who will submit proposals into the categorisations that are used?

• Voter effort - How much effort is required by the voter to understand the categorisation and vote on how they are used?

• Proposal assessor effort - How much effort is required by the proposal assessors who will assess the categorisations?

• Category team effort - How much effort is required by the category teams who suggest the categorisations?

• Categorisation justification - How complex is it to provide justify why the categorisation should exist and why it should be selected for a given funding round? How much effort is required?

• Governance complexity - How much complexity is there to govern this approach for funding categorisation?

Recurring funding categorisation

Advantages

• Less budget weighting complexity - Using recurring categorisations in each funding round will mean having more data and insights on how the categorisations were used in previous rounds. This data will make it easier for the community to make better informed decisions on how to better distribute funding between the categorisations in the following rounds.

• Lower proposer effort - Proposers become familiar with the categorisations so can more easily learn and use them in each funding round.

• Lower voter effort - Voters become familiar with the categorisations and how they've been used which makes them better informed on what budget weightings will make sense based on historical usage and future demand.

• Lower proposal assessor effort - Assessments would not be as necessary on recurring categorisations and this effort could be spent elsewhere on other proposals.

• Lower category team effort - Category teams would save time by not needing to define categorisations each funding round if they were recurring.

• Low categorisation justification - All effort for categorisation is done upfront and then changed when necessary. This means stakeholders involved in managing the categorisation don't need to justify it each funding round and this effort is done upfront.

• Lower governance complexity - Repeatedly using the same categorisations means you don't need the community to review and vote on which categorisations to use. Instead the focus stays on only the budget weightings to use for the ones that are being used.

Issues

• Harder to direct funding - Using recurring categorisations could mean they are less effective at directing funding from one area to another at the categorisation level. This is not a large issue as the voters still get to decide where they want to allocate funding using their vote and there are many approaches for directing funding that can be used.

Changing funding categorisation

Advantages

• Easier to direct funding - Changing categorisation each funding round means the community could make groupings that focus on a different areas that are of higher importance in the short term. This however comes at a cost of putting a mandate on where funding must be allocated and increases the risk of issues that occur in adverse situations where few or low quality proposals are presented for the categorisations that are available.

Issues

• Increased budget weighting complexity - New categorisation approaches would need to find relevant insights, data and community feedback to justify the budget weighting of the categorisation. If it is a new type of categorisation it would be more difficult to be well informed in most cases on what budget weighting should be applied.

• Higher proposer effort - Proposers would need to review all the categorisations every round before submitting proposals.

• Higher voter effort - Voters would need to spend time understanding different categorisations each funding round before they could decide what budget weightings make sense and which categorisations they want to vote on.

• Higher proposal assessor effort - Assessments would be necessary every round if they were always changing.

• Higher category team effort - Category teams would need to create categorisations every funding round and justify why they are important.

• Increased categorisation justification - If categorisations change every funding round the community will need to review and justify that the categorisation is suitable and should be used in the funding process.

• Higher governance complexity - Every funding round those involved in governing the categorisation would need to review all the categories being suggested and ensure the right information is covered to make well informed categorisation decisions.

Summary

• Many ways to direct funding - Having changing funding categorisation can be one way that the community could use to direct funding. The problem with this is it means predicting ahead of time what ideas and innovation will be submitted for those categorisations of focus areas. There is never a guarantee that proposals will be submitted or the ones submitted are of sufficient quality. Alternatively there are other approaches to direct funding that do not need to impact funding categorisation.

• Changing categorisation introduces high effort and complexity - Constantly changing categorisations increases effort required for all the community roles involved in the funding process in terms of total time required and governance complexity. There are numerous ways to direct funding outside of changing the categorisation. With no other significant benefits for changing categorisation on a regular basis there does not appear to be many reasons to use this as an approach for funding categorisation.