What should fundraisers reasonably expect from grantmakers?

Two articles caught my eye recently:

The results of a survey run by nfpSynergy, which asked charity staff (mainly fundraisers) how they would like grantmakers to change their practices – in short, they want more unrestricted funding.

A blog post by Vu Le arguing that funders who avoid paying overheads are perpetuating inequality and making it harder for charities to be effective.

The issues at the heart of both of these articles

There are severe challenges facing charities – particularly small charities, and particularly those serving under-represented groups:

  • Charities struggle with securing unrestricted income (which is crucial for funding internal functions); the smaller the charity, the more difficult this is.
  • Charities may lack the skillset for trust fundraising, and waste resources by taking a “scattergun” approach to applications, rather than targeting funders appropriately.
  • The demands of some major funders put pressure on small charities, which many feel to be excessive and may lead to structural inequality.

I acknowledge these to be real concerns. I must also acknowledge that I’m writing from a place of privilege, having only ever worked for charities with income over £5 million, all of which had well-established donor portfolios. However, I think all charities, big and small, would benefit from exploring some of the above attitudes.

Which rules do we want to play by, and be judged by?

Dan Pallotta’s seminal TED talk explains that charities are not permitted to participate in society in the same way as corporations, which hinders their ability to do good. Corporations can take risks with their money; the same behaviour in charities is often perceived as wasteful. And as far as I’m aware, corporations don’t have to deal with restricted funding in the same way that charities do.

However, if we want to play by the same rules as corporations, we need to accept the need to be judged by these rules, too.

It all comes down to fundraising

What’s the first thing a budding entrepreneur has to do, once they’ve got their groundbreaking idea? Raise funds, whether from investors or customers. We’re all familiar with Dragon’s Den. The day-to-day reality is probably not as dramatic for most entrepreneurs, but to be successful, they do have to grind away, searching for and pitching to the funders who are most likely to be interested in their product.

And the pressure doesn’t disappear after the first tranche of funding; far from it. The role of a startup CEO is all about securing funds, and customers.

It’s no different for charities. They can’t exist without funding. But is the hunt for cash as deeply embedded within all charities – from tiny, volunteer-led outfits to established multi-million pound organisations? Probably not, otherwise respected commentators such as Veritus Group wouldn’t be so emphatic about the need for change. Fundraising, in many quarters, is still viewed with distaste.

We’re all competing for funds

There are thousands of charities seeking funding. They exist because there’s an important need to be met, whether that’s mentoring disadvantaged people, protecting the environment or researching cures for a rare medical condition.

Just because the mission is important, however, doesn’t mean they’ll get the funding they need. They may feel they have the right to exist but sadly, the real world doesn’t always agree. That’s why having skilled fundraisers and a culture of philanthropy is absolutely vital.

It might not be fair, but it’s the reality. The CEO of a startup company faces the same challenge. He or she might have created the best, most exciting product in the world – but without excellent sales and customer care functions, it’s unlikely to succeed.

Wishful thinking won’t get us there. We need to adapt.

nfpSynergy’s survey found that most fundraisers would prefer “shorter periods between applications, easier reporting, and to be able to submit multiple applications.”

No sh*t, Sherlock.

It also identified that many fundraisers, particularly those from smaller charities, would happily trade a large restricted grant for a smaller, unrestricted gift. This worried me for a number of reasons:

  • The question made no sense to me. It was not clear whether the restricted gift would be for budgeted or additional work – this is a crucial difference.
  • It also made no sense to ask fundraisers. Of course we all want an easier life, and unrestricted grants are generally simpler to manage, but this type of decision should not be made solely by fundraisers. It’s one for the management team.
  • It worried me that small charities would – in theory – give up the prospect of significant funding because they lack the internal processes or expertise to manage it.

Is there a trust issue?

In his latest article for Civil Society, nfpSynergy founder Joe Saxton suggests that “many restricted grants simply demonstrate a lack of trust in the recipient charity.”

There would be value in exploring the reasons for this perceived lack of trust. Luckily we don’t need to look far to find a clue: one of the comments on the nfpSynergy article is from a grantmaker who explains that many of their grantees fail to send them a grant report.

Securing funding comes with responsibility. We cannot expect grantmakers to make our lives easier if we don’t also meet their basic requirements.

Grantmakers are not “the other side”; they’re part of the charity sector too

Vu’s blog highlights the plight of tiny charities that struggle with the conditions imposed by grant funders. He argues for relaxed funding restrictions to give these charities a break.

We should carry this argument through to its logical conclusion. As most trust funders are also small organisations with their own charitable objectives, we need to be sympathetic to the challenges they face, and treat them with respect. This means not submitting speculative applications which we know, deep down, won’t interest them and will suck up more of their time. The commenter on the nfpSynergy article emphasises the fact that most grantmakers have very few resources and are mostly volunteer-led. Restricted funding represents a simple way of ensuring their grantees have some accountability.

I don’t deny that there are challenges and injustices within our sector. And some of the large grantmakers – which can afford paid staff – have excellent, inclusive processes and listen to their grantees. We should continue discussions where they are welcome and advocate for the charities which struggle. But we also need to accept and adapt to the reality.

What should charities do?

  • Get really, really good at impact measurement and reporting. This isn’t easy. But if we can show donors that their money makes a real difference, wherever it goes within the charity, it may relax the emphasis on restrictions.
  • Have excellent internal processes for budgeting and priority-setting. This will enable quick and wise decisions when opportunities for restricted funding arise.
  • Seek to fulfil your charity’s mission while also recognising the need to adapt to what funders want. Yes, the mission is important, but if you can’t sell the cause, you don’t have a charity.
  • Take a strategic approach to trust fundraising. Don’t fire off applications at any vaguely likely opportunity. Target your approaches carefully. Seek to upskill your fundraisers.

I’ve hear the complaint more than once, from donors and charities alike, that the charities with the best fundraisers are the ones that get the money. Well, maybe the better question to ask is why aren’t the other charities prioritising investment in fundraising?

Simply complaining about injustice isn’t going to secure funding – nor will it give us any credibility as a sector. We need the right skills and mindset to adapt to the reality we find ourselves in. And we need more excellent fundraisers.

The purveyors of blockchain may not have the charity sector’s best interests at heart. Why am I not surprised?

A glut of new cryptocurrencies and blockchain products has emerged that are being marketed to charities and donors as the answer to all of our problems. I’ve explained in my first post why I don’t think they are a silver bullet.

Moreover, I don’t believe that donor trust is indeed at the heart of these products. There are other agendas behind this recent push, and they’re not difficult to find if you’re prepared to delve into the detail.

Here are some details from two products that I think are worth sharing more widely.

Alice.si openly promises to “punish”charities

Alice is a “decentralised social impact network built on the Ethereum blockchain”. Its white paper begins with a very convincing argument about the global decline in donor trust. Alice is, obviously, the solution to this problem.

The white paper goes on to explain how blockchain technology will increase transparency and improve trust. It includes a mechanism to ensure charities only receive their next payment after meeting the reporting deadline. There’s nothing wrong with that, and I’ve seen similar conditions in countless grant agreements.

What I haven’t seen before is this particular wording:

“[social organisations] are paid for each update report submitted, and punished if they miss deadlines.”

“Progress reports may also engender punishments

Now, the only type of genuine trusting relationship I can think of that makes use of “punishment” is a niche that is beyond the remit of this blog.

Punishment certainly does not belong in a healthy donor/charity relationship. I think this choice of words says a great deal about how Alice views charities.  Is this really the type of relationship that we want to encourage?

Alice wants to parcel up charity impacts as “tokens” and sell them to speculators

Alice claims that its “​raison d’être is to help social organisations produce transparent , publicly accessible and reliable impact data.” The first few pages of the white paper explain how this will solve all problems that donors and charities have.

On page 19, we begin to understand why this reliable impact data is so important to Alice. The white paper acknowledges that some impact takes years to realise, before going on to explain that:

“Alice solves this issue by tokenising impact investments and making them tradable as securities on a secondary market. This means that impact investors no longer have to worry about fitting deals with their investment horizon, as the secondary market allows them to exit investments before they have run their course. As this is run within the Alice platform, potential acquirers have perfect visibility on how these investments have performed, and how likely they are likely to continue performing, before buying them, which facilitates price discovery. The automatic re-routing of interest payments to the new owner of an impact investment security further reduces​ ​transaction​ ​costs.​”

Social impact bonds and impact investing already exist, but are we comfortable with taking this concept a step further? Would a secondary market for trading impact really benefit the charity sector? This is probably an area that is ripe for debate – but we should consider it properly, rather than dive into partnerships where we may not have realised that it’s part of the agenda.

Giftcoin doesn’t want us to convert our cryptocurrency into cash

Giftcoin is “the world’s first charitable cryptocurrency for charitable giving and good causes.” Similarly to Alice, it is about “creating transparency and trust in the giving process”.

The white paper has an attractive diagram showing how a donor pays in Giftcoin. This is transferred to the charity, which then spends it on goods and services. The blockchain technology enables all transactions to be accurately tracked.

I saw one glaring omission: how does the charity exchange Giftcoin for goods and services? As a charity worker, I’m not prepared to receive my salary in Giftcoin, and I don’t know any who would be.

I asked Giftcoin this question via Twitter and received no response. However, their response to another Twitter user was revealing:

giftcoin.png

So Giftcoin wants charities to keep their cryptocurrency and not convert it into pounds or dollars.

Why? I can’t think of any reasons that benefit the charity sector. If there were compelling reasons, I’m sure Giftcoin would have covered these in the white paper, or at least taken the time to respond to my tweet.

What is the charity sector for? What is your charity for?

Charities exist to improve the world. Personally, I don’t believe that charities exist to make money for investors. Nor do I agree that they should gamble their money on high-risk investments. If a charity accepts cryptocurrency donations, it’s in their best interest to convert them to fiat immediately.

I’m sure others may disagree with me, but let’s have an open debate and consider these issues carefully. I’m not sure how feasible the above goals are (probably not very) but we need to ensure that charities are entering these types of partnerships with their eyes open.

Charities need to read the small print

There’s nothing wrong with having your own agenda: everyone has one. However, where the agenda is at odds with the charitable interests that the cryptocurrency is claiming to support, I suggest proceeding with extreme caution.

At least they’re being upfront about it. In the small print.

Feminism and fundraising targets

As the new financial year approaches, many of us will have been involved in target-setting. If you’re lucky, you’ll have had a say in the final figures. If you’re not, they’ll have been imposed with minimal discussion.

I’ve noticed a concerning tendency among some of my fellow – and mostly female – fundraisers. Online and during casual chats at conferences, I encounter negativity about targets. They’re seen as impossible, idealistic, unreachable goals. GIFs are circulated depicting variations on a theme of ostriches hiding their heads in the sand.

This, to me, points to a worrying sense of helplessness. Complaining perpetuates this negative cycle and changes nothing.

Why are targets so often unrealistic?

Many others have written excellent pieces outlining the reasons why unrealistic targets are imposed on fundraisers:

  • Budgets are based on what’s needed, rather than what the portfolio can realistically deliver;
  • Excellent performance in one year is “punished”, resulting in a demand to improve by 10% or 20%, regardless of the circumstances;
  • The ignorance of non-fundraising senior management plays a significant role.

I would add one more reason which I haven’t seen addressed in any fundraising articles/blog posts: middle management which fails to challenge unrealistic goals, instead unreasonably pushing the pressure down to their team.

Harvard Business Review published a very incisive piece on this issue last year, highlighting that “Too few managers have the courage or the wherewithal to do anything but roll over when their boss hands them an astronomically high number.” That’s harsh, but based on experiences earlier in my career, and accounts I’ve heard from others, it’s as equally applicable to the charity sector as it is to the industries that HBR usually covers.

What has this got to do with feminism?

Women are socially conditioned, far more than men, to be acquiescent. Given the over-representation of women in the fundraising workforce, it seems inevitable that this conditioning has affected our organisational cultures.

Fundraising departments often have a culture of “niceness” which generally means that people are pleasant and friendly. There’s nothing wrong with that. However, the flip-side can be an aversion to conflict and healthy debate, which means that issues fester beneath the surface and avoidable problems aren’t anticipated.

It’s therefore probably unfair to place so much of the blame on the middle managers. In order to resist unrealistic goals, they have to fight against their own social conditioning (if they are women), and an organisational culture that’s hostile to open challenge and debate. I know how awkward that feels because I’ve done it. I’ve felt in the past as if sometimes this type of behaviour means I’ve been perceived as a “troublemaker” whereas in other cultures it would be seen as perfectly healthy.

I’d rather take that label, however, than let my team down by giving them goals that I know are impossible. The other benefit of having these experiences, and speaking openly and frankly about them when job-seeking, is that it’s enabled me to find an employer with a healthy and sensible attitude to target-setting.

Fundraisers, we need to resist the culture of bad targets

There are many, many reasons why this culture of unrealistic targets needs to stop:

  • It’s bad for your own career. Failing to negotiate a realistic number means you’ll never achieve the track record of achieving targets that appears as a requirement on virtually every fundraising job ad that I’ve ever seen.
  • If you’re a manager, it erodes your authority. A formal job title as “manager” isn’t enough to run a successful team. You need to ensure your employees trust you and believe you have their best interests at heart, as well as the organisation’s – especially if you want to keep your best staff.
  • Impossible targets encourage unethical behaviour. The aforementioned HBR article explains how these unhealthy cultures led to scandals such as Wells Fargo. We’ve got plenty of our own scandals in the charity sector that are probably caused, at least in part, by a relentless push towards unrealistic income targets. As our sector continues to experience intense (and justified) scrutiny, we need to consider and avoid the unintended consequences of our internal cultures.
  • It stymies genuine relationship fundraising. Most of us know how fundraising should be done: it’s based on long-term relationships built through trust. It can take many, many years to secure a transformational gift. However, pressure to achieve the big money “now” leads to a desperate scrabbling around for “quick wins” and the long-term important but non-urgent work to build these vital relationships never gets off the ground.

How should we move forward?

I hope that other fundraisers – those who might be drawn towards complaining, and especially the women among us – will be motivated to make a real change.

  • If you’re a junior fundraiser, scrutinise your target. Think about how you are going to meet it and make a plan. If you are unsure about any part of it, have a discussion with your manager. They should be able to help you understand how you have a reasonable chance of meeting it.
  • If you are a department manager, make sure you can give your team this confidence. If you can’t, have this same discussion with your manager. This doesn’t mean you shouldn’t challenge your team if you think their proposed figures are too low, but you need to be able to distinguish between reasonable and unreasonable pressure.
  • When job seeking, ask how targets are set, and whether staff have a say in them. When going for interviews myself, I found this question to be extremely illuminating. One charity avoided answering the question directly. If more fundraisers ask this question, more employers will see that they need to give a good answer in order to compete for talent.

It should be possible to have these discussions while maintaining a high standard of professionalism. After all, reasonable targets are in the best interests of your organisation.

I don’t mean this to give the impression that I think targets are inherently a bad thing. I love having a target! When used correctly, it’s a brilliant motivational tool that can also help a fundraiser track their progress and impact. But there is an important difference between the budgeted figure which finance relies on in order to allocate expenditure, and the “dream” stretch target. Don’t confuse the latter with the former.

Loads of people want to work for charities. Why do we make it so difficult for them?

The lack of diversity in fundraising is receiving increased attention. Thank goodness: it’s holding back the charity sector in many ways which we probably haven’t fully appreciated.

Fundraising also has a talent shortage which, in my view, goes hand in hand with the diversity problems. It’s incredibly difficult to find good fundraisers, especially at senior level. This also leads to a host of other problems, such as job-hopping; it’s easy to be tempted away to a new charity after a couple of years if you have lots of options. This means that charities rarely benefit from the long-term, sustained relationships that are vital in fundraising.

I’ve met many people, however, who would love the opportunity to work for a charity and change the world, but can’t find a way in (I’ve found other anecdotal evidence of this – for example the comments on Leon Ward’s Guardian article – but no broader evidence; I’d be fascinated to see any studies on this subject if they’re available).

My personal experience

I’m not sure how much has changed since I graduated in 2006, spent a successful year as a street fundraiser, then struggled to find any paid opportunities to progress in the sector. Instead I moved to the private sector for a few years, which gave me the necessary experience to move into a trust fundraising role.

My years in the private sector weren’t wasted: I gained valuable skills such as bid-writing, but it seems a shame that charities’ doors were essentially shut on me. I could have raised a lot more money for charity in those intervening years if given a chance. And I’m a white middle-class woman with a Cambridge degree who had a year’s relevant experience. If I found it difficult, what chance do those without my privilege have?

It seems absolutely mad that we need more talented people, and so many want to work for us, but we make it virtually impossible for them to help us achieve our missions.

Unpaid internships are still too common

There are far too many barriers to entering charities – especially fundraising and comms roles – for anyone without a certain level of financial privilege.

One of the most pervasive forms of discrimination is the prevalence of unpaid internships. What’s more, many paid entry level roles in charity require experience, therefore implying that these internships are a mandatory step.

This is a subject that’s gaining increased attention and there are some signs of improvement: a quick search of Charityjob indicated several enlightened charities advertising internships paying a decent wage.

However, when I turned to the “volunteering” section of the site, my heart sank. Many were genuine volunteering opportunities, but it wasn’t hard to find the less positive examples.

Look at this role description for a “Trust and Statutory Fundraising Intern” from a major charity that you’ve definitely heard of.

  • Supporting Fundraisers in the development of effective appeals, reports, proposals and updates aimed at Trusts and Statutory bodies, to raise income for the [charity’s] work.
  • Undertaking qualitative and quantitative secondary research to identify charitable trusts and statutory bodies that might have the potential to support the [charity].
  • Keeping information up to date on our fundraising database.
  • Assisting with a mailing programme to donors.
  • Providing timely feedback and reports to donors, including creation and delivery of thank you messages by mail.

I have hired people to do a virtually identical job, the only substantial difference being that the role I manage pays a salary. What’s the difference between the two positions? Why should one be paid and one not?

I also picked out the following telling phrases from “volunteer” adverts, all with the word “intern” in the job title, and all from relatively well-known charities (my comments follow each one):

“almost all the charity’s paid staff began as interns or on a pro bono basis.”

  • This is a charity that has intentionally limited its talent pool to those who can afford to work for free.

“our volunteer-based approach helps keep overheads low so that as much funding as possible can go to our projects”

  • Overheads are a fact of life. If donors won’t pay for them, someone else has to. In this case, it’s the “volunteers” who are bearing the weight of these costs. It doesn’t feel so good to boast about low overheads if you consider that the people in your organisation with the least power are the reason, does it?

“Some weekend and evening work may be required, with Time Off In Lieu (TOIL) available.”

  • I really, really hope this was a mistake. This statement does not belong on a volunteer ad. And if it was an error, it doesn’t say much about this charity’s commitment to caring for and developing its “volunteers”.

Many of the adverts I read were accompanied by diversity statements. How ironic.

Charities are exploiting the volunteering loophole

Volunteering is a vital and invaluable aspect of charity and should be encouraged. Because of this, I also think it’s impossible to legislate against unpaid internships in the charity sector. But I also think that if we’re honest with ourselves we know the difference: where does the power lie in the relationship? Is the volunteer desperate to get on the first rung of the career ladder? Or is it someone seeking to give back in their spare time?

Ultimately, there’s a very simple test to identify whether a charity “volunteer” should be paid: if you offered them a salary, would they accept it? (I think this hypothetical question has more depth to it than simply considering the offer of money. A salaried position comes with a host of responsibilities that many volunteers would prefer not to take on.)

Unpaid internships are a false economy – and this affects our ability to build relationships with donors

Compare the “Trust and Statutory Fundraising Intern” role to an identical, but paid position. Which is more likely to lead to better donor relationships for the charity, and ultimately more income? The short-term, unpaid post with a revolving door of new starters, all from similarly privileged backgrounds? Or the longer-term, more stable position with an employee who can afford to live independently, can take on more responsibility and is more likely to be loyal to the charity?

What can we do about it?

The diversity problems in fundraising are multi-faceted and complex. I have only addressed one small aspect of it in this blog post. However, there are many practical steps that organisations can take to remove some of the entry barriers and improve the situation for themselves and for the sector. It’s not just the right thing to do ethically; it makes real business sense.

  • Managers need to commit to finding and developing talented people: these may be young graduates or school-leavers, or older workers making a career transition. The role in question could take the form of an apprenticeship, a paid internship, or simply an entry-level post. Yes, training inexperienced people takes time and effort, but I’ve found that employees appreciate and remember the trust, belief and support provided. Charities that can “grow their own” talent can avoid recruitment agency fees, inspire loyalty and avoid high turnover.
  • Senior managers need to support their team to do this: finding and developing staff is time-consuming, but must be prioritised, no matter how busy the manager’s workload.
  • Charity recruitment agencies should do more to find talented, passionate people with the aptitude but not necessarily direct charity experience. There could be a gap in the market for an agency with more diverse candidates that represent the full spectrum of human experience. However, in order to do this the agencies need to know that there’s a business case for it: that charities will take on people who don’t have direct experience and commit to training and supporting them. We need to provide the demand.
  • Keep arguing for overheads: these are costs that literally keep the lights on, and ensure we can pay all staff fairly. We need to stop the overheads “race to the bottom” and give donors better ways of assessing our effectiveness, such as proper impact measures.
  • We need a coordinated sector effort to halt unpaid internships. Perhaps sector membership bodies could have a requirement for all organisational members to abandon unpaid internships and commit to finding new talent in more equitable ways.

We struggle to find good talent and have all the disadvantages of a homogeneous workforce, and yet there are countless people out there who would love to work with us if given the opportunity. Are we committed to our missions? Do we really want to change the world? We can’t do it unless we have the right workforce. And we certainly don’t have it yet.

 

 

 

 

Blockchain and cryptocurrency will not solve the charity sector’s problems

Blockchain is probably something you’ve heard about, but you’re not quite sure what it is and you haven’t got round to digesting its workings and its implications for the charity sector. Perhaps you find your mind switching off a little when these terms are mentioned.

Stay with me: I’ll do my best to summarise it and then offer my opinion. In short: I don’t think it’s the right answer to any of the sector’s problems.

What does it all mean?

Blockchain is a “distributed ledger technology” which provides an anonymised ledger of financial transactions. It’s a decentralised system which purportedly removes the need for “middle men” like governments and banks.

Blockchain is the technology that underpins cryptocurrencies such as Bitcoin, which you’ve probably heard of.

Why it’s not going to help the charity sector

I’ll now explain why I don’t think it’s going to be very helpful for us. Several people have written articles explaining why it’s a good thing. Perhaps they’re right, but unlike some other writers on the subject I’m not trying to sell you any blockchain technology. Hopefully this can provide some balance.

(Hackernoon has written an excellent, if somewhat technical, piece on this subject, which has informed much of my summary)

Reason 1: it’s very hard to convert your money from cryptocurrency to cash

Bitcoin can handle seven transactions per second. Visa, on the other hand, does 60,000.

For various technical reasons, explained here, it’s difficult and expensive to convert cryptocurrencies. This isn’t good for charities or donors.

The creators of the proposed charity cryptocurrency, Giftcoin, do not explain in their white paper how charities can convert and spend their giftcoin on actual, real goods and services. This is a red flag to me.

Reason 2: it’s terrible for the environment

An article by Emily Atkin in the New Republic explained that just one bitcoin transaction uses as much energy as an entire household does in a week, and there are 300,000 transactions every day. Visa transactions are far, far more efficient. This is directly leading to increased fossil fuel consumption, and the problem is intensifying with the increased interest in cryptocurrency.

I can’t see how environmental charities could possibly justify their involvement in this, given the conflict with their mission. Any charity, or individual donor, with a strong environmental policy, or ethical investments policy, may also need to think twice.

Reason 3: if you cut out the government, you have no recourse if someone nicks all your money – and there are big security problems with cryptocurrency

Cutting out slow, clunky old bureaucrats from transactions sounds great at first. It could reduce costs and speed things up. That’s all fine, until someone hacks into your system and steals all your money, as has happened frequently with cryptocurrency. No government backing means there’s no recourse.

Given the extreme high risk that comes with cryptocurrency, could trustees claim that they’re acting responsibly if they invest in bitcoin? At least if someone steals your cash, you have a chance of clawing it back through the courts.

Reason 4: Evidence suggests that it’s useful to have people read contracts, not just computers

“Smart contracts” are a way of instigating automatic payments via the blockchain, when pre-arranged conditions are met. Giftcoin’s white paper gives the example of a well being constructed with charitable funds: when an independent verifier confirms that certain construction stages are reached, they update the smart contract and the charity receives the next instalment of funds. It’s being claimed that this can improve donor trust and remove the need for middle men such as lawyers.

There are several problems I can see with this:

  • You still need to draw up a contract in advance, so lawyers won’t be out of a job any time soon
  • Hackernoon gives examples of where this has gone horribly wrong – it turns out it’s still necessary to have humans verify contract conditions (and it’s clear that Giftcoin won’t get around this)
  • Many of the smart contract providers claim that charities will only receive the money once their objectives have been met. Firstly, this is already possible, and done, via government payment-by-results contracts. Secondly, it has terrible implications for charities’ cashflow if it becomes more commonly expected that all payments should be in arrears. Thirdly, it leaves no room for healthy failure – not all charity projects will be successful, and there need to be opportunities to learn and improve.

Reason 5: it won’t solve our problems with donor trust

Giftcoin claims that blockchain technology will increase donor trust by showing how their money is directly making an impact.

Any charity worth their salt should be doing this already, through bespoke reports, informal updates, photographs, case studies and project visits. As far as I can see, blockchain and cryptocurrency contribute nothing except increased risk and expense.

For any charities not already proactively communicating impact to their donors, their problems aren’t going to be solved by blockchain technology.