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Blockchain has the potential to make a huge difference to the third sector, increasing the trust in which it has been lost and ensuring transparency and efficiency.
There are 700 billion charitable donations each year globally and 70% of international brands are involved in charity in some way.
Problems with charitable associations and crypts include the speed of transactions if one thinks of natural disasters and transaction costs, as well as lack of transparency.
To solve this problem, AidCoin was created, supported by the team behind Charity Stars, the leading online auction site that donates 85% to charity.
Traceable and transparent
AidCoin consists of AidChain, the browser where donors meet with charities and service providers and donations are tracked and transparent. AidPay is an integrable widget that can be used by charity associations in different cryptocurrencies and converted into the AidCoin token, an ERC20 token provided via Ethereum.
Federico Malvezzi, managing director of AidCoin, states: "No record can be deleted on the blockchain, which means traceability and zero frauds, and there is no need for intermediaries or transaction fees.
"Smart contracts could mean that if certain predetermined conditions are not met, donors could receive their donations or be able to redirect to more deserving or urgent causes.
"I firmly believe that we can bring transparency and efficiency to the charity sector: Crypto donations are cheap, easy and traceable, even cross-border for unbanked."
Bigger problems
He was interested in the blockchain as "I wanted to solve the biggest problems and I studied how the blockchain could help".
Previously, he worked as a founder and CEO of Dryve, a car maintenance app based in Los Angeles, and has 12 years of experience in management consulting with companies like Bain and Co. He is certainly "obsessed with the blockchain".
The goal, he says, is to bring "transparency and traceability of how funds are spent by charitable organizations".
Apart from fundraising, he argues that WWF used blockchain technology to track resources – including tuna to prevent and combat illegal crimes and practices in the fishing industry.
Smart contracts
"If blockchain allows us to think that charities behave correctly – because transactions are transparent – think of smart contracts, the funds will be distributed as predetermined by the smart contracts themselves".
For example, a charity in Africa that is building a school: "They will receive the funds to pay the labor only after buying the land and have purchased the supplies, the materials provided to build the school".
Recognizes: "Charitable associations are not massively adopting blockchain due to lack of IT skills, lack of regulation and lack of resources and, in particular, current tools, current solutions are not designed to meet non-profit needs."
But he believes that stablecoins are important for mass adoption and that there is "a wide spectrum of different use cases and needs".
Volatility
He says that the high volatility of cryptocurrency is "exciting or frightening, but it is not for nothing, no one should invest any more than they are willing to lose".
"Blockchain by definition is a fiduciary machine and this concept can be applied to many different industries.When we see an industry as opaque as the charity sector, it is nice to see it use blockchain.
"It is a great platform for the charity sector as a whole and the reason is due to trust and we can not discuss this, because everything is immutable and transparent".
He points out that in 2010 the Red Cross raised more than $ 500,000 to provide homes to 130,000 people in Haiti following a natural disaster. But after five years, only six houses had been built.
obstacles
Some of the obstacles to overcome include speed and transaction costs, opacity of funds and low efficiency in fund management.
With AidPay, charity associations have access to a simple user interface portfolio for those people who are not used to using Crypto.
He says that 43% of those interviewed say they do not trust charities and 59% say they donate more if they knew how the money was spent.
It is influenced by entrepreneurs who "put an end to success" while people embrace technology.
"We are positioning ourselves at the crossroads between blockchain and charity, the clear advantage for them is that it will bring more money and offer a better user experience so that they are incentivized."
