A tech entrepreneur has said that the aftermath of the Grenfell Tower disaster showed the importance of improving transparency in the charity sector.
Alex Howard is the co-founder of blockchain start-up Giftcoin, which allows donors to track when and how their donation is spent in a digital age where trust in charities seems to be at an all-time low.
He told BusinessCloud watching the aftermath of recent natural and domestic disasters play out made him uneasy as he wanted to give money but was not sure where it would go. He singled out the tragic tower block blaze in West London last year as an example.
“A lot of the contributions [to those affected] ended up being clothes and food,” he said.
“It was an interesting example of people preferring to give things. They had more confidence that those things were going to be used in the right way.
“The irony was that there were too many things, and they ended up being sold to raise money anyway.”
Donations on Giftcoin, which has launched a token sale and has already raised more than $1.25 million, are converted into GIFT tokens, allowing the contribution to be tracked transparently.
Funds are released as charities reach project completion of milestones, and uniquely, donations not used by the charity can be passed back to the donor.
Giftcoin, which is bringing a beta version of its platform to market this year, then sends donors a notification when their gift is spent and, crucially, informs them about how their money has been used.
Howard said: “There was a lightbulb moment [where I realised that] if you could put this whole service on the blockchain then you would have a very different attitude towards it.
“If you can build greater trust, you can get more money to the places it needs to go to.”
Giftcoin is working with a number of charities as part of its testing phase, including Ourmala, The Optimum Health Clinic and English Heritage, while it has also signed a collaboration with Charity Checkout to make the platform available to its 2,000 registered charities.
After the coin was established, the company conducted a survey of 2,000 people and found that donors would give 49 per cent more money to charity if they could see how the money was being spent.
“We recognise that the large of adoption of Giftcoin is not going to happen by going out and talking about cryptocurrency and blockchain,” said Howard. “It’s going to happen by talking about transparency and measuring impact.
“The long-term vision of Giftcoin is having end-to-end transparency in charitable giving. You give money towards a project and you can see how that charity or non-profit actually spend that money at the end of the supply chain.
“There are so many ways that blockchain is going to disrupt people lives in the coming years. Fluctuations in the price of Bitcoin is irrelevant in that longer-term.”