Future of Charity Fundraising — Grace vs Conventional Fundraising
Here’s a harsh reality — The current state of charity fundraising is problem-ridden. It is not uncommon to for nonprofits to be hindered by fraud, corruptions, inefficiencies and limited resources.
By implementing all donations using smart contracts on the Ethereum blockchain, these problems are largely mitigated on the Grace platform.
Conditional Release of Funds
The donations we’re currently used to making are “dumb”, meaning there is no way to add conditions to withhold donations no matter how bad things turn out to be.
Consider an ineffective charity program that fails to deliver its promises, or worse yet, one that is an outright scam. In this case, it would not be sensible to continue funding the program with all of the donations, as it would waste the resources that can otherwise be allocated to other more worthy causes.
This problem can be easily circumvented on Grace, as donations are written in smart contracts, which can be extended to support advanced payment logic such as staged payments, or conditional release of funds.
Only Designated Recipients Get the Funds
Donations implemented in smart contracts ensure that only the correct recipient addresses can receive the fund. As a donor, nothing matters more than having your hard-earned cash delivered securely to the right hands.
For more information please refer to the section in our whitepaper detailing the proposed decentralized way of verifying charities/nonprofits to be eligible for donations.
Open and Auditable Transaction Records
In an increasingly decentralized world, we believe in transparency and openness. As all transactions are stored in the blockchain, they are immutable and are publicly accessible.
The beauty of the blockchain is that every node on the network has a copy of the entire transaction history. This adds a layer of security that is almost impossible to be cracked —a malicious attempt to alter a record would require an astronomical amount of computing power, which is almost guaranteed to be economically infeasible.
The added transparency also further empowers the community, as they can evaluate and take reactive actions based on information that would otherwise kept behind closed doors.
Since Grace writes directly to the Ethereum blockchain, anyone can review and audit historical donations. “Creative accounting” is out, transparency is in.
In addition to changing the way donations are made, Grace aims to drastically improve the current state of fundraising in two major ways. They are outlined in our manifesto for charity fundraising:
The Advocate Incentive Mechanism (AIM) is specifically designed to facilitate them. On Grace, any worthy fundraising campaign can leverage the power of AIM. For a more detailed discussion on AIM, check out this post we published earlier.
Freeing Up Charities’ Resources
With AIM, Grace takes care of all of the heavy-lifting of promotional work, so the nonprofits’ limited resources can be focused on other important operational and logistical aspects. AIM also mitigates the challenges of hiring and retaining talents in outreach and marketing, and drastically reduces operating expenses for the nonprofits in general.
In traditional fundraising campaigns, the promotional efforts would have been very costly and often yield inconsistent exposures. By leveraging AIM on Grace, nonprofits can enjoy maximal exposures without any upfront costs. This is what we call limitless scaling.
Due to increasing opportunity costs, there has been a steady decline in volunteering rate as well as the annual number of hours of volunteer work done around the world.
As passionate as a volunteer may be, time is very often a limiting constraint and there is only so much sacrifice one can make before having to succumb to the unforgiving reality of daily affairs and commitments.
Passion alone can only burn for so long. This is why Grace provides nonprofits with economically-incentivized promotional help that is highly reliable and sustainable in the long run.
Altruism is all the more powerful when properly incentivized.
“The collective gasp we utter at the thought of anyone getting wealthy helping those who suffer is the axiomatic conclusion of our Puritan ethos about mixing money and meaning. That ethos is a cancer on our capacity to change the world.” — Dan Pallotta
In typical fundraising, a donor’s contribution is one-off and transactional. On Grace, it is just the beginning of a tremendously powerful value-generation cycle.
AIM allows a percentage of donor’s contribution to be allocated to further incentivizing Advocates, meaning each contribution can trigger a ripple effect with lasting results, further increasing a campaign’s exposure.
Advocates are rewarded for their efforts to onboard donors, whose contributions make in turn it more attractive for more Advocates to participate.
This is a virtuous cycle — one that aligns individual interests with social interests, making social good an unstoppable force.
Join the Movement
Our team is super excited to take part in bringing you the future of nonprofits fundraising. Stay tuned for updates and leave a comment below to let us know what you think!