"I don't give to charity as much as I should do...I feel guilty, but I'm never sure where my money goes."
I must have heard that sentence, or variations of it, dozens of times at the end of last year. I was polling donors to test the waters for a new philanthropy platform that shows exactly what impact donations makes, and that's the kind of response I got, again and again.
Who can blame them?
As a social entrepreneur specialised in running online campaigns for charities, I was also starting to feel really depressed about the constant attacks on charities in the press. It felt like hardly a week went by that I didn't see a new damning headline:
Poppy seller commits suicide after charity pest calls!
MPs say 'catalogue of failures' led to Kids Company collapse!
Crackdown on chuggers as charities told to stop bullying donors!
So I wasn't at all surprised to see that, in November, public trust in charities hit its lowest point in almost a decade. That's a big problem because less trust means less donors, and the sector is already starting to see the number of donors plummet.
And it's not a new problem either. Donations have been pretty stagnant for the past ten years. Even though people give a huge amount to charity - about £19bn a year - a big fall in generosity could be catastrophic, especially as the government has cut back a lot on funding for the third sector due to austerity.
So that's why, with my co-founder Areti, I started looking for ways in which we could restore trust in charities once and for all, and solve the problem at its root.
Blockchains are about enforcing trust
Luckily, "trust" has become a whole new area of research in startup land, thanks to the rise and rise of blockchains. It's definitely one of the "next big things" in tech, and I have to admit that I've fallen down the rabbit hole. I'm obsessed with its potential!
At its core, blockchain technology is a way to enforce trust and transparency amongst people transacting with each other. I was intrigued by the increasing use of Bitcoin for donations, for example, and by the creation of very serious all-blockchain NGOs dedicated to empowering the unbanked in some of the poorest regions of the world.
What really made it click for me is the potential of one of the most powerful blockchain innovations - "smart contracts" - to restore trust in the charity sector. What if you could track exactly what impact your donation makes? And what if you got your money back if no impact is made? That's exactly what smart contracts allow us to do, and they're at the heart of the new donation platform we're building, called Alice.si.
To make it simple, I like to think of smart contracts as hyper-secure, transparent piggy banks that store donations, and only pay them out to charities that can demonstrate concrete results.
Tying donations to results
To make this vision a reality, Areti and I set about finding partners who shared our commitment to transparency and accountability, and we've been really lucky to collaborate with some incredibly inspiring and forward-looking charities. With Thames Reach and Commonweal Housing, for example, we're exploring ways in which we could help scale their innovative Peer Landlord programme, which helps people at risk of becoming homeless by providing them with affordable accommodation, training, and a peer support group within which they can learn home management skills and then teach them to others. Donations can be tied to the the programme's success in keeping its beneficiaries from sleeping rough, because it's regularly assessed by an independent body.
Raising funds on a payment-by-results basis can be risky, of course, so we're also working to ensure that we protect the charities that have the courage and discipline to carry out performance-based programmes through our platform. With the social finance experts at Numbers for Good, for example, we're looking at how Alice can help charities reduce their operational risk by raising impact investment, particularly through the use of social impact bonds, which the UK has been pioneering since 2010.
Making it happen
We've been lucky in other ways too. About a month ago, I was sitting in a room full of social entrepreneurs in Oxford, where we were all presenting our projects, ranging from a Digital Farm using the Internet of Things to support smallholder farmers in Africa, to VR goggles for the visually impaired. That was in the beautiful offices of the Nominet Trust, and the thing we all had in common was that we'd received funding from their Social Tech Seed fund. I'm incredibly grateful to them as we couldn't have got this far without them, and they've been supporting us in many other ways since.
Alice.si is still in beta, but do please check out our website and get in touch or sign up to our newsletter. The first pilots are planned for December this year, we're looking for more partners, and we'd love you to be a part of the donation revolution!
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