Blockchain and Charitable Giving — Is it all hype?

Blockchain is a quickly evolving technology that is often surrounded by hype. Consequently, the internet can be full of outdated and misleading information about the current state of this technology. So how do we learn about Blockchain and how it can be used for social impact?

Rather than starting at the beginning and asking questions like ‘what is blockchain?’, I thought I would jump ahead and see who is actually using blockchain today, right now, to improve lives around the world. In the first of a series of articles for the Blockchain Philanthropy Foundation, I wanted to look for real-world blockchain initiatives in the charitable giving sector. I asked ‘how and why are they using blockchain?’ and ‘what can we learn from them?’

Although most charities do amazing work, high-profile scandals and a lack of transparency have reduced trust and confidence across the sector. The following 5 case studies demonstrate that blockchain technology is already being used to improve transparency and efficiency in charitable giving:

World Food Program — Syrian Refugees, Jordan
Alice Funding Platform — St Mungo’s, United Kingdom
Amply — School Subsidies, South Africa
BitGive — Chandolo Primary School Water Project, Kenya
AIDChain — AidPay and AidCoin Cryptocurrency

These case studies range from small-scale pilot programs that aim to help 15 people, like St. Mungo’s homelessness project on the Alice platform, to large-scale projects like the World Food Programme (WFP) that provide aid to more than 100,000 Syrian refugees. Through this program, blockchain technology is used to provide efficient, transparent and secure transfers that have reduced service fees by 98%. The program has been so successful that the WFP is expanding the program to cover all 500,000 Syrian refugees in Jordon by the end of 2018.

Organisations like Alice and Amply are using blockchain technology, and specifically smart contracts, to help charities collect donations and automate the transfer of payments only when predetermined milestones have been met. By integrating the independent verification of milestones into the system, these results-based financing platforms create transparency and trust. They also significantly reduce costs and improve efficiency by automating much of the checks and balances required. In particular, the Amply platform has helped South African teachers save over 4,000 hours every month, by digitally capturing and verifying class attendance records needed for government subsidies.

BitGive, a bitcoin donation platform, has been encouraging charities to accept bitcoin donations since 2013. In one of their projects, they partnered with the Chandolo Primary School in Kenya to successfully raise bitcoin for rainwater tanks, latrines and training. Using bitcoin and blockchain technology made transactions faster, cheaper and more secure — less than 1% of donations was spent on fees. It also allowed donors, non-profits and the public to see when donations were received and spent in real time. AIDChain has developed multiple blockchain products in the charity space including a payment gateway, AidPay, to allow charities to accept cryptocurrency donations on their own websites. AIDChain has also issued its own cryptocurrency token called AidCoin. It can be bought and sold on certain cryptocurrency exchanges like any cryptocurrency, however, its value is derived from driving AIDPay and the AIDChain ecosystem. All donations that go through AIDPay are converted to a new cryptocurrency, AidCoin, which allows charities and donors to track and manage donations using a single cryptocurrency.

Many of these projects are still in the early stages of partnering with charities, non-government and government organisations to test the technology and collect data. Blockchain technology continues to evolve and many risks remain. Nevertheless, these organizations are already demonstrating the types of problems that blockchain can solve and where that can take us.

To read more about these case studies, including some of the difficulties and limitations that these projects still face, go to the full article here.

Disclaimer: This is not investment advice or endorsement of any blockchain technology, cryptocurrency or specific provider, service or offering. Blockchain technology is an early stage technology that is constantly changing and has many unknowns. Cryptocurrencies are speculative, complex and involve significant risks — they are highly volatile and sensitive to many factors. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service before making any decisions.

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