Revolutionizing charitable donations by harnessing the power of blockchain
February, 2018. We live in a real world with real problems. Hurricanes, earthquakes, and wildfires ravaged the world in 2017, as they do each year. Year 2017 was a very expensive and deadly year of natural disasters on Earth. Let’s remember famine victims in Somalia and Yemen, wildfires, avalanches in Afganistan, super-strength hurricanes from the Carribbean to Ireland… People all around the globe witnessed many disasters over the past year. If you look at the trend of economic losses since 1970, the world should prepare for greater losses in the future.
On the other hand, charities have modernized themselves and embraced the Internet and social networks to engage more people. It is now easier than ever to recruit people, raise money for a cause and deliver it to the people in need. But people still have second thoughts, and they all concern charitable organizations. First of all, people don’t like to pay for administrative and marketing overheads as it feels like lost money. Second, donating to major charities doesn’t give you the sense that you are making a difference. Finally, charities are like businesses in that they employ people, have their own agendas, and find it difficult to detect fraud. The process is centralized and rigid with difficult supervisory challenges and high overhead.
Explosion of Crypto donors
Cryptocurrency enthusiasts have proved quite charitable, according to Fidelity Charitable’s annual report. Fidelity Charitable received $69 million in donations of cryptocurrency, such as Bitcoin, a nearly tenfold increase from the previous year.
“The donations represent a tenfold increase since the organization started accepting Bitcoin in late 2015, a figure that grew 140 percent faster than the other options (real estate, shares of LLCs and bags of grain) that Fidelity Charitable accepts as donations”, according to the company’s vice president Amy Pirozzolo.
If that comes as a surprise, perhaps it shouldn’t — donations have been one of the key use cases from cryptocurrency since the beginning.
If You Don’t Want To Pay Taxes, donate
For many cryptocurrency holders, the main impetus for donating their cryptocurrency is taxes. In 2014, the Internal Revenue Service in USA classified cryptocurrencies, including Bitcoin and other digital digital currencies such as Ethereum, Litecoin and Ripple, as an asset, like a stock. Thus, meaning that sales are subject to capital gains.
Due to the tax efficiencies of donating noncash assets, this uptick results in more overall dollars available for giving.
The IRS treats cryptocurrencies as personal property, not currency. Therefore, buying and selling cryptocurrencies is the same as buying and selling gold or stock.
So, the traditional rules apply:
(1) is it a business asset; or
(2) a passive investment?
If it’s not a business asset, then:
(1) what did you buy it for;
(2) how much did you sell it for; and
(3) how long did you own it?
Let’s assume for this article you’re not using your cryptocurrency for business purposes and you’ve bought cryptocurrency on a market at a very low price. And now you’re potentially facing a large gain if you sell those coins.
Donating cryptocurrency to your favorite public charity (and not to a private foundation) can help you save taxes on the coins you do sell. The charity gets a large donation, and you get a larger deduction, if you donate the coins to a charity instead of selling the coins and donating cash.
Can Technology Alter Giving?
We believe it can and it will. We are hoping to revolutionize giving. We designed the CHERR.IO platform on top of the Ethereum blockchain to ensure traceability of all transactions and full auditability.
Using a voting mechanism, the decision power is given to the donors which enables them to choose and control where their money should go in order to make the biggest impact. However, this technical improvement in execution is not enough for us. We want to go further. We want to disrupt the concept of charitable organizations and introduce a paradigm shift in how they work.
Ideally, if donations can be better tracked, organizations will have to be more upfront about how they are spending their money, including how much goes toward overheads. Our system is increasing transparency and reinforcing trust back to the people.
With many small contributions, collectively, we can make a very positive impact. The future of charitable donations is here and, for donors and charities alike will never be the same again.
Check CHERR.IO, the most inspirational project at Futurehack Davos 2018, and help us revolutionize the world of donations.
Stay tuned for more amazing news and be cherished!
Facebook: https://www.facebook.com/CherrioPlatform
Twitter: https://twitter.com/CherrioPlatform
Telegram: https://t.me/CherrioPlatform
Telegram ANN: https://t.me/CherrioPlatformANN
Instagram: https://www.instagram.com/cherrioplatform/
LinkedIn: https://www.linkedin.com/company/cherrio/
