Blockchain startup launches tool that boosts donation transparency

New tool allows charities to increase donations by showing donors exactly what impact their money makes

Austin Clark | 16th May 17

Social tech startup Alice has launched a new tool allowing charities to increase donations by showing donors exactly what impact their money makes.

The first appeal to use the new funding platform is a pilot run by St Mungo’s, the homelessness charity, to help 15 people sleeping rough in London rebuild their lives.

Alice works by “freezing” donations until charities can prove they have achieved their social goals. This means that when donors give to a charity project on Alice, their donation is guaranteed to make an impact, or they get their money back.

Alice is one of the first companies in the world to make practical use of blockchain technology in the charity sector (beyond the simple use of cryptocurrencies such as bitcoin or ether for donations).

The company aims to lead a major step change in ethical fundraising, to help redress the decline of public trust in charities and tap into donor demand for more information about their impact. Specifically, Alice leverages blockchain ‘smart contracts’ to increase transparency and accountability. This allows Alice to:

  • Make the performance of charity projects public, and fully auditable
  • Ensure performance data is secure and extremely difficult to falsify or hack
  • Manage the conditional payment of donations based on charity performance

The first appeal, run by St Mungo’s and called Street Impact: 15 Lives, aims to help lift 15 people out of long-term rough sleeping thanks to intense personalised support. On its appeal page on Alice, St Mungo’s lists a number of specific goals it needs to achieve in order to receive donations, such as helping individuals find and then stay in a new home, with one to one support provided for up to six months after they move in to help them adapt. Other goals include helping people address any substance misuse or mental health issues that they may have.

Donors who respond to appeals such as Street Impact: 15 Lives can track when goals are met and when their gift is paid to the charity. Each appeal specifies how goals are verified, and who validates them.

Alice’s smart contracts are built on a public blockchain called Ethereum. To avoid the volatility of cryptocurrencies, donors make donations in pound sterling, using normal debit or credit cards. This innovative solution – applying the blockchain to “real world” money – is run partly in partnership with the Financial Conduct Authority, within its sandbox programme which aims to foster innovation in the financial services industry, and with Tramonex Labs, a fintech startup that issues e-money on the blockchain.

Raphaël Mazet, CEO of Alice, said: “The charity sector is currently going through a crisis of public trust. We want to address that by helping trailblazing organisations like St Mungo’s, who are committed to transparency, to raise more funds for the amazing work they do. We’re excited to be launching this first pilot with an appeal that will make a really positive difference to the lives of 15 people. We hope to scale the project to help many more people if it’s successful.”

The pilot is being delivered using grant funding from Nominet Trust’s Social Tech Seed programme. Vicki Hearn, Director of Nominet Trust, commented: “Alice has real potential to rebuild public trust in charities thanks to its innovative use of blockchain technology. Nominet Trust is proud to support Alice in piloting this platform, helping to lift people out of homelessness, and raising the bar for the transparency, accountability and security of charitable giving.”