BP allocation (Bootstrap Project)

✳️ These funds SHALL be received and administered by ZF.

This allocation of the Dev Fund will flow as charitable contributions from the Zcash Community to the Bootstrap Project, the newly formed parent organization to the Electric Coin Company. The Bootstrap Project is organized for exempt educational, charitable, and scientific purposes in compliance with Section 501(c)(3), including but not limited to furthering education, information, resources, advocacy, support, community, and research relating to cryptocurrency and privacy, including Zcash. This allocation will be used at the discretion of the Bootstrap Project for any purpose within its mandate to support financial privacy and the Zcash platform as permitted under Section 501(c)(3). The BP allocation will be treated as a charitable contribution from the Community to support these educational, charitable, and scientific purposes.

ZF allocation (Zcash Foundation's general use)

This allocation of the Dev Fund will flow as charitable contributions from the Zcash Community to ZF, to be used at its discretion for any purpose within its mandate to support financial privacy and the Zcash platform, including: development, education, supporting community communication online and via events, gathering community sentiment, and awarding external grants for all of the above, subject to the requirements of Section 501(c)(3). The ZF allocation will be treated as a charitable contribution from the Community to support these educational, charitable, and scientific purposes.

Zcash Community Grants (ZCG)

This allocation of the Dev Fund is intended to fund independent teams entering the Zcash ecosystem, to perform major and minor ongoing development (or other work) for the public good of the Zcash ecosystem, to the extent that such teams are available and effective.

✳️ These funds SHALL be received and administered by ZF (or FPF, pending TBD outcomes of FPF proposal: 14). ZF MUST disburse them for "Major Grants" and expenses reasonably related to the administration of Major Grants, but subject to the following additional constraints:

1. These funds MUST only be used to issue Major Grants to external parties that are independent of ZF, and to pay for expenses reasonably related to the administration of Major Grants. They MUST NOT be used by ZF for its internal operations and direct expenses not related to administration of Major Grants. Additionally, BP, ECC, and ZF are ineligible to receive Major Grants.
2. Major Grants SHOULD support well-specified work proposed by the grantee, at reasonable market-rate costs. They can be of any duration or ongoing without a duration limit. Grants of indefinite duration SHOULD have semiannual review points for continuation of funding.
3. Priority SHOULD be given to Major Grants that bolster teams with substantial (current or prospective) continual existence, and set them up for long-term success, subject to the usual grant award considerations (impact, ability, risks, team, cost-effectiveness, etc.). Priority SHOULD be given to Major Grants that support ecosystem growth, for example through mentorship, coaching, technical resources, creating entrepreneurial opportunities, etc. If one proposal substantially duplicates another's plans, priority SHOULD be given to the originator of the plans.
4. Major Grants SHOULD be restricted to furthering the Zcash cryptocurrency and its ecosystem (which is more specific than furthering financial privacy in general) as permitted under Section 501(c)(3).
5. Major Grants awards are subject to approval by a five-seat Major Grant Review Committee. The Major Grant Review Committee SHALL be selected by the ZF's Community Advisory Panel or successor process.
6. The Major Grant Review Committee's funding decisions will be final, requiring no approval from the ZF Board, but are subject to veto if the Foundation judges them to violate U.S. law or the ZF's reporting requirements and other (current or future) obligations under U.S. IRS 501(c)(3).
7. Major Grant Review Committee members SHALL have a one-year term and MAY sit for reelection. The Major Grant Review Committee is subject to the same conflict of interest policy that governs the ZF Board of Directors (i.e. they MUST recuse themselves when voting on proposals where they have a financial interest). At most one person with association with the BP/ECC, and at most one person with association with the ZF, are allowed to sit on the Major Grant Review Committee. "Association" here means: having a financial interest, full-time employment, being an officer, being a director, or having an immediate family relationship with any of the above. The ZF SHALL continue to operate the Community Advisory Panel and SHOULD work toward making it more representative and independent (more on that below).
8. From 1st January 2022, a portion of the MG allocation shall be allocated to a Discretionary Budget, which may be disbursed for expenses reasonably related to the administration of Major Grants. The amount of funds allocated to the Discretionary Budget SHALL be decided by the ZF's Community Advisory Panel or successor process. Any disbursement of funds from the Discretionary Budget MUST be approved by the Major Grant Review Committee. Expenses related to the administration of Major Grants include, without limitation the following:
   • Paying third party vendors for services related to domain name registration, or the design, website hosting and administration of websites for the Major Grant Review Committee.
   • Paying independent consultants to develop requests for proposals that align with the Major Grants program.
   • Paying independent consultants for expert review of grant applications.
   • Paying for sales and marketing services to promote the Major Grants program.
   • Paying third party consultants to undertake activities that support the purpose of the Major Grants program.
   • Reimbursement to members of the Major Grant Review Committee for reasonable travel expenses, including transportation, hotel and meals allowance.

   The Major Grant Review Committee's decisions relating to the allocation and disbursement of funds from the Discretionary Budget will be final, requiring no approval from the ZF Board, but are subject to veto if the Foundation judges them to violate U.S. law or the ZF's reporting requirements and other (current or future) obligations under U.S. IRS 501(c)(3).

ZF SHALL recognize the MG allocation of the Dev Fund as a Restricted Fund donation under the above constraints (suitably formalized), and keep separate accounting of its balance and usage under its Transparency and Accountability obligations defined below.

ZF SHALL strive to define target metrics and key performance indicators, and the Major Grant Review Committee SHOULD utilize these in its funding decisions.

Qedit

✳️ These funds SHALL be received and administered by FPF.

This allocation of the Dev Fund will flow as charitable contributions from the Zcash Community to Qedit, for the purposes of supporting their ongoing activities related to Zcash Shielded Assets, and related protocol/ application/ legal/ and other efforts.

ZecHub

✳️ These funds SHALL be received and administered by FPF.

This allocation of the Dev Fund will flow as charitable contributions from the Zcash Community to ZecHub, for the purposes of continuing their ongoing content contributions, community organizing, et al within the Zcash ecosystem.

Obligations

BP, ECC, ZF, ZCG, Qedit, FPF and ZecHub are recommended to accept the obligations in this section.

Ongoing public reporting requirements:

• Quarterly reports, detailing future plans, execution on previous plans, and finances (balances, and spending broken down by major categories).
• Monthly developer calls, or a brief report, on recent and forthcoming tasks. (Developer calls may be shared.)
• Annual detailed review of the organization performance and future plans.
• Annual financial report (IRS Form 990, or substantially similar information).

These reports may be either organization-wide, or restricted to the income, expenses, and work associated with the receipt of Dev Fund. As BP is the parent organization of ECC it is expected they may publish joint reports.

It is expected that ECC, ZF, and ZCG will be focused primarily (in their attention and resources) on Zcash. Thus, they MUST promptly disclose:

• Any major activity they perform (even if not supported by the Dev Fund) that is not in the interest of the general Zcash ecosystem.
• Any conflict of interest with the general success of the Zcash ecosystem.

BP, ECC, ZF, and grant recipients MUST promptly disclose any security or privacy risks that may affect users of Zcash (by responsible disclosure under confidence to the pertinent developers, where applicable).

BP's reports, ECC's reports, and ZF's annual report on its non-grant operations, SHOULD be at least as detailed as grant proposals/reports submitted by other funded parties, and satisfy similar levels of public scrutiny.

All substantial software whose development was funded by the Dev Fund SHOULD be released under an Open Source license (as defined by the Open Source Initiative 5), preferably the MIT license.

Enforcement

For grant recipients, these conditions SHOULD be included in their contract with ZF, such that substantial violation, not promptly remedied, will cause forfeiture of their grant funds and their return to ZF.

BP, ECC, and ZF MUST contractually commit to each other to fulfill these conditions, and the prescribed use of funds, such that substantial violation, not promptly remedied, will permit the other party to issue a modified version of Zcash node software that removes the violating party's Dev Fund allocation, and use the Zcash trademark for this modified version. The allocation's funds will be reassigned to MG (whose integrity is legally protected by the Restricted Fund treatment).