Charitable giving allows benevolent individuals or organizations to donate money for a cause they are passionate about. However, not all stakeholders involved in charity have good intentions. Extrapolations from UK Charity Finance Group has revealed that more than 300 charities (including legitimate ones) have had their funds halted after been accused of illegal money sources.
Lack of trust and corruption are two significant issues when it comes to charity giving. Contributors need to be able to trust that their contributions will not be misused or wasted. Charities, on the other hand, need to trust that they are sourcing funds from legitimate donors and not corrupt entities. This problem of trust has not had any truly viable solution until the arrival of blockchain technology.
A3, a Silicon Valley-based research and development outpost of Airbus has launched an open source public blockchain venture known as Project Heritage. The project focuses on helping charity and other non-profit organizations to track funds, determine the return on investment of fundraising, and eliminate the need for third-party management.
The Heritage pilot campaign was used to test the internal donation platform; it included participants like the Museum of Art, Design, and Entertainment, HartSong Ranch Animal Sanctuary, and animal welfare organization.
A3 says that the Heritage blockchain system aims to eliminate “the need for middlemen” and help “charities and non-profits know exactly where their funds are going.”
BaaS for Charity?
Several charity organizations are facing different limitations; they may be interested in utilizing blockchain technology to improve their overall operations, but it is a difficult task for them since they lack the proper technical know-how and resources to implement distributed ledger solutions. Heritage will assist them in the same way blockchain-as-a-service (BaaS) providers allow companies with little blockchain experience to leverage the technology to solve their problems.
A3 is hoping that Heritage can serve in this capacity and also help to provide these charity firms with access to a new set of donors (crypto-oriented individuals/organizations). By doing this, the company will help bridge the gap between digital assets and charity donation.
According to a statement from A3:
“Many of the organizations that could benefit most from blockchain are denied access due to resource skill or knowledge gaps. Heritage wants to open these organizations up to a new class of donor.”
A3 will help provide Airbus Foundation with a blockchain based application for managing crypto-based donations for itself and its partners. A3 also partnered with Marker to introduce an asset-backed currency known as Dai into the system. Dai was built to protect its users against the volatility of the cryptocurrency market. Heritage is also working with UNICEF to pursue the development of other blockchain ventures.
The Rise of Cryptocurrency Donations
Fidelity Charitable, a charity organization under the Fidelity Investment umbrella, became the first firm to start accepting cryptocurrencies in 2015. In 2017, the foundation recorded an enormous rise in cryptocurrency donations; receiving $69 million worth of cryptocurrency.
Fidelity CEO acknowledged this fast growth and called it “a surprising hit,” he further added that:
“It worked out because there were so many people, newly incredibly wealthy through Bitcoin, who were looking to become philanthropists. We made it really easy for them.”
Many charity organizations are now following Fidelity’s footsteps by accepting cryptocurrency donations. Heritage has positioned itself for success by offering its services to assist these firms manage their cryptocurrency contributions.