Aidcoin: bringing blockchain technology to the charity sector
In view of the upcoming AidCoin ICO starting January 16th 2018, we explain why AidCoin is the most simple and transparent solution to donate efficiently, boost charity fundraising and reinstate trust in non-profits.
1. A QUESTION OF TRUST
The non-profit sector is, at best, a $2 trillion bungling giant, stumbling between corruption scandals and gross inefficiencies. In the worst cases, they are murky black holes, leeching off our altruism: don’t take our word for it, but that of the everyday men and women.
Trust has been eroded by the non-profit’s lack of transparency and accountability, as public perception is being influenced by outrageous scandals — pick your favourite: how about Helpers Community Inc actually doing no charitable work? Trump Foundation admitting to self-dealing or James Reynolds’ $187m misappropriation? The list of outrageous anecdotes is depressingly long.
The continuous slump in trust on the part of potential donors, therefore, seems justifiable: in the US, 35% have little or no trust in them. In the UK, figures aren’t promising either: trust in charities has fallen from 6.7 out of 10 in 2014 to 5.7 in 2015, with 33% of those polled explaining their reduction in donations with the dent caused by recent scandals on charities’ reputations. The consequences are alarming: in the US, 52% of charities are unfunded and cannot match the distressing increase in demand for their services.
At CharityStars, we’ve been working every day, for years, on this problem, helping charities transitioning to efficient and engaging digital fundraising. Today, we couldn’t be more excited to share with you our beautifully simple plan to revolutionise the non-profit sector. We introduced the oafish giant to the dark side of the web: blockchain.
Given its current reputation, the blockchain may need of a good PR agent as much as the nonprofit sector. Moreover, one may be sceptical of simple solutions, but blockchain-powered smart contracts may be just that: their ease of use, efficiency, transparency and ultra-low cost are just some of solutions ensure that their adoption will be exponential as it is inexorable. In this series of articles, we’ll show you how our CharityStars’ AidCoin tokens are manna in the wildness for fundraising charities.
2. AIDCOIN ECOSYSTEM: A SIMPLE SOLUTION
- Transparency: thanks to the Distributed Ledger Technology, donors can track how their money is being deployed and spent by the charities. No record can be erased on the blockchain, thereby providing traceable accountability showing the exact flow of any coin in the ecosystem.
- Lower costs: with traditional donations, money goes through various middlemen (eg. government agencies, financial institutions) and fees (around 3%) are charged by credit or debit card as well as by clearing houses. AidCoin donations are be executed directly to a charity instantaneously and at a lower cost.
- Efficiency: if certain KPIs or other predetermined conditions aren’t fulfilled, smart contracts could allow donors to receive their donations back or to redirect them towards more deserving or pressing causes. In 2010, for example, the Red Cross raised $500m to build 130,000 in Haiti: what would you have done with your donation upon realising that, 5 years later, only 6 homes had been built?
- Tax Deductible: Although formal guidance still isn’t available, the IRS treats virtual currencies as noncash assets and, therefore, eligible to be treated as long-term capital gain property. Moreover, while for traditions donations over $5,000 a qualified appraisal is required, blockchain donations are exempt as they are transparently and publicly traded. Thanks to AIDPay (AidCoin’s exchange payments gateway, allowing charities to accept donations in crypto) any fiat currency and all the major cryptocurrencies can be converted into AidCoin, providing a tax deduction receipt to donors.
- Traceability: in addition to delivering all the benefits outlined above, AidCoin allows donors to track their blockchain donations even if and when the charity in question converts the cryptocurrency into fiat money. AidCoin is the only cryptocurrency that can achieve such a degree of transparency thanks to its AIDChain system integrated with the banks’ API, providing a full picture of how charities are using the funds and full knowledge of who they very end user of the donation is.
3. AIDCOIN AND EFFECTIVE ALTRUISM
AidCoin aims to become the dominant de facto giving token serving the entire community of donors, charities, fundraising platforms and corporate giving programs. AidCoin will help charities raise more money, more frequently, with less hustle and at lower costs — while at the same time ensuring the highest efficiency and scrutiny.
With AidCoin transactions and donations, we are getting one step closer to the fulfillment of effective altruism and one step further away from ineffective donations. One of the most damning examples of low-quality evidence concerns microcredit (proselytized by Muhammad Yunus and the Grameen Bank): it seemed like a cost-effective solution and donors were spellbound by anecdotes of people who had used their microloans to start businesses that, in turn, helped them escape poverty. But when high-quality studies were conducted, microcredit programs were shown to have little or no effect.
Once again, there’s no shortage examples of less than ineffective charity projects. AidCoin can put an end to these “bubbles” overnight and ensure that every cent is devolved in the most efficient way and fostering innovative financing solutions.
4. AIDCOIN’S VISION
The non-profit sector is painfully slow in terms of innovation: the costs are enormous and are borne by those most in need. In the US alone, $370 billion donations flow every year into over 1.5 million charities. Online donations, however, account only for 5% of total transactions, while the use of cryptocurrencies is almost non-existent. Yet, by 2025 10% of GDP is expected to be generated on blockchain and cryptocurrencies already reached a total market capitalization of $200 billion.
The issues plaguing charities worldwide are innumerable and cannot be countered by relying on traditional methods. Nor can we afford to maintain the status quo or harbour doubts about the impact new technologies can actually bring about: wars, climate change, natural disasters, immigration and the erosion of the welfare state render the resources and the services provided by nonprofits ever more in demand by billions of people and animals worldwide. The solution is, for once, simple and close at hand: there needs to be widespread adoption of blockchain technology by charities and donors alike, encouraged by clearer and friendly cross-border regulation and, eventually, a blockchain ledger to for all transactions — for all currencies.
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