A new company, Giftcoin, is hoping to launch an online giving platform this year that will use blockchain technology to bring about a “revolution in charitable giving” by helping charities to be more transparent and build better relationships with donors.
The company plans to use blockchain technology – a method of recording transactions using a peer-to-peer network – to create a giving platform using a new cryptocurrency, also called Giftcoin, to donate to charity.
Using “smart contracts”, Giftcoin plans to keep donors informed about how the charities they support are progressing and only unlock funds once certain requirements have been fulfilled.
For example, if a donor has given money to a charity planning to build a well, the project could be broken down into three stages: finding the land, building the well, handing it over to the community. After each milestone is reached, donors will be told. Once this has been independently verified, the next stage of funding will be released to the charity.
The company will also build an app to enable members of the public to donate small amounts each time they make a purchase by rounding the amount up. It will charge a fee to anyone wanting to move their accumulated tokens off the platform, or to anyone wanting to convert another cryptocurrency into Giftcoin.
The founders are Alex Howard, a serial entrepreneur whose ventures include the UK charity Optimum Health Clinic, Tim Bichara, a technologist and entrepreneur, Jonathan Beddoes, a technology entrepreneur, Chris Cain, a systems analyst, and Ben Evans a blockchain enthusiast who has worked for Morgan Stanley and Deutsche Bank.
The company has a number of charity advisers offering support including Jon Duschinsky, who created the Ice Bucket Challenge, Lady Astor of Hever, vice-president of the National Autistic Society and patron of a number of other causes, and Shirley Conran, author and founder of the Work Life Balance Trust. Giftcoin also has advisers from the blockchain and investment communities.
The first token event, the process of investing in Giftcoin to enable its founders to build and pilot the platform, will begin next month and aims to raise between $2m and $10m.
Giftcoin plans to test the platform in June and then launch in beta in July before rolling the final product out in September.
Duschinsky told Civil Society News that he believes the new platform could be the solution to a problem that charities have "grappled with for years”.
He said that charities have found it hard to implement the relationship fundraising model that was developed by Ken Burnett, but that “Giftcoin offers a really joined up solution that will empower donors".
“We’re at the beginning of a disruption that the charity sector has known is coming for a while,” he added. “We know we can be more efficient, we know we can be more joined up.”
Duschinsky also said that the “donor base is changing” and that the sector needed to adapt. While it might be relatively new technology, which is not yet widespread, he said that “it is maturing incredibly quickly” and that “there are opportunities here for donors, for beneficiaries and also for charities”.
He said he doesn’t expect people to move straight away from giving by cheque to Giftcoin, but added that there is a "massive amount of money sitting in cryptocurrency - people have invested an absolute fortune” and that “they can’t get that money out of cryptocurrency and put it back into dollars for a number of reasons”.
Giftcoin has published a whitepaper outlining its plans, which can be read here.