Digitalization Has Aided the Growth of Charitable Giving

If you are like us, you probably believe people are fundamentally good in nature. You want to build a more equal, healthy, prosperous and happy world. And the numbers back up this rosy-eyed view of humankind: every year, globally, people donate over a trillion dollars to philanthropic organizations and foundations, with an estimated $449 billion donated by Americans in 2020 alone. Even more encouragement that we are looking out for one another is that charitable giving continues to increase year-over-year (in 2020 overall giving increased 4.1%), and as more people move online to identify new causes and donate, giving online increased over 12.1% this year. These trends have already translated to digital assets, with our friends at The Giving Block, which helps non-profit organizations accept crypto donations, over $300 million dollars worth of Bitcoin, Ethereum and other crypto-assets are donated every year.

Where does that money go? Traditional charities, particularly those that are built on fiat cash, have experienced a fall from grace as they have been embroiled in scandal about what percentage of charitable funds actually reach programs and aid. Unfortunately, there have been countless scandals where reports of high overhead and misuse of funds that can deeply cut donations, and increase mistrust. The team at GiveCrypto.com, Coinbase’s impact initiative, has written a great blog post that highlights the limitations of impact of each dollar filtered through traditional charities. While certain administrative costs and fundraising efforts cannot be avoided, program costs and deployment of aid is done in a “one and done” model, where even if 99 cents of every dollar donated reaches the target audience, the impact of those 99 cents is implemented at one point in time.

Fuel digital basic income

How Can Giving Become Financially Sustainable?  

So, how do non-profits address making charitable contributions sustainable? For those with the resources to afford it, many nonprofits and foundations have tackled the sustainability challenge by embracing an endowment model, where money invested earns interest and dividends that can be used for operations. The principal funds can’t be spent, but the income from that principle can be used to create a financial bedrock for the organization. The income is golden, as it doesn’t need to be earned or solicited. These funds can be used for operations, including program and direct aid.

Inspired by this model, GoodDollar has created a new Sustainable Giving model. It enables the charitable contributions of real people to sustainably create income, for forever, that is distributed directly into the hands of real people. What does it mean? Taking notes from the endowment model, GoodDollar will invest – or in our case  “stake” – your charitable contribution on your behalf. The interest and yield it earns is directly fed back into the GoodDollar economic model, where it is given back to users who are claiming GoodDollars. When you contribute to GoodDollar, your funds will be used to create basic income for real people for forever, without a dollar going to fund our operational expenses. Plus, it’s all traceable and trackable through the blockchain.

So, How Does GoodDollar’s Sustainable Giving Work?

When you make a charitable donation to GoodDollar, your crypto contribution will be used to mint, create and distribute GoodDollar tokens for forever. How? In the GoodDollar economic model, a basic income supporter can lock or “stake” their funds which generates interest, and that interest is used to mint GoodDollar’s. When you donate your crypto funds, they will immediately be staked on your behalf, where all the interest and yield generated from your principle will be fed through the GoodDollar economic model.

Here is a quick numerical example that shows how $100 dollars worth of crypto sustainably supports the digital income, forever, for 10 people:

• $100 worth of DAI generates 3.6% annually (current interest rates for DAI on Compound)
• This 3.6 DAI will currently mint $36,000 G$ a year
• 36,000 G$ / 365 days of the year = 98 G$ a day
• If each user receives approximately 10 G$ a day, then a $100 contribution in USD supports 10 Claimers a day

We are currently working to make some updates to our public dashboard that will showcase the impact of charitable contributions on minting digital income for all. So you’ll be able to see the power of doing #good with your crypto.

Fuel digital basic income

How Do I Do #Good with My Crypto?

Simple!

• Send either ETH / DAI to the following Smart Contract: 0x93fb057eec37abc11d955d1c09e6a0d218f35cff
• You can send your funds from any centralized exchange or Web3 Wallet (but remember, it will accept ETH or DAI)
• That’s it!
• Want to receive a thank you note and acknowledgement for your donation? Submit your transaction here and a member of our team will send you a personalized thank you note!

Now there is no need to wait to do #Good with your crypto, and you can start today.

What About Staking with GoodDollar Rewards?

We hear the demands of the people and we want to release full-staking with GoodDollar rewards, too! This will be released later in 2021. This release is the first step in achieving the full-fledged staking mechanism we released in the White Paper.

Technical Overview

For those of you who are seeking a deeper understanding about the contract architecture, GoodDollar’s Technical Lead Hadar Rottenberg hosted an AMA several weeks ago that reviews the contract architecture, and you can watch him deploy the contract live!

• View the contract on Etherscan
• Contract documentation on GitBook