From cryptocurrencies to mobile money applications, a key feature of many new financial technologies is the attachment of specific rules and conditions to the exchange of value, underpinned by data and enforced algorithmically. By making money ‘smart’ in this way, it is envisioned to afford entirely new financial infrastructures, services and interactions.
There are a number of startups seeking to use blockchain technology to support more direct, accountable and transparent ways of giving to charitable causes. In many cases, these rely on the creation of automated and tamper-resistant ‘escrows’ where donations are held with a third party, before they are released or returned based on pre-defined rules and conditions. While some applications seek to use escrows to relate the release of funds to the achievement of certain milestones, or through measuring the impact of a charities’ work, we chose to focus our inquiry on the ‘first-mile’ of donations, and donors own motivations for giving.
We envisaged the use of escrows as a way for a donor to set up an individual ‘programmable donation’ with a charity. Each donation would contain an ‘offer’: the value of the donation, and how it is withdrawn; specific ‘conditions’ that trigger the release of a donation; ‘validator(s)’ who provide the data that informs the contract whether conditions are met. Lastly, donations would define a beneficiary – the individual, cause or account who would directly receive the funds once released – and an expiry date, at which point any unreleased fundswould be returned to the donor. The escrow as a mechanism to hold and release money underpins the attachment of conditions and validation. The donation serves as a contract between donor and charity, which is immutable, but requires funds to be pledged up-front by the donor. By supporting conditional and data-driven giving, this model opens up potentially radical new models of charitable giving.
The Smart Donations App is an ongoing development of this research. Through this blockchain-based app, it allows users to donate money directly to charitable causes with a number of conditions attached upheld with the use of smart contracts.
For example a contract may look like this,
I will donate £100 to an earthquake response fund which will be released if there is a significant earthquake anywhere in the world in the next 12 months. After 12 months, if there has not been an earthquake, then the donor has a number of options;
- To withdraw their donation and keep their money
- To donate directly to the charity's general unrestricted funds
- To renew or create a new contract with the same charity through the app
- To create a new contract with a different charity through the app
By working with a number of charitable partners, we are exploring the opportunities and challenges presented by this new approach to giving. Recent publications can be found here:
Chris Elsden, Ludwig Trotter, Mike Harding, Nigel Davies, Chris Speed, John Vines. 2019 Programmable Donations: Exploring Escrow-based Conditional Giving. In CHI Conference on Human Factors in Computing Systems Proceedings (CHI 2019), May 4–9, 2019, Glasgow, Scotland UK. ACM, New York, NY, USA, 13 pages. https: //doi.org/10.1145/3290605.3300609