Dignitas International: Bitcoin Holds Promise for Non-Profits

(@GCaffyn) | Published on August 10, 2014 at 10:05 GMT

malawi-dignitas
The global fight against HIV and AIDS is gaining ground, but the war is far from over. Around 6,000 people are infected with the virus each day and 19 million across the globe remain unaware of their HIV-positive status. Additionally, treatment – and by extension, survival – is something of a lottery.

A recent statement from UNAIDS executive director Michel Sidibé warned of a "fragile five-year window" to address the discrepancies in healthcare services worldwide, adding:

"Ensuring that no one is left behind means closing the gap between people who can get services and people who can't, the people who are protected and the people who are punished."

On the frontline of this daily struggle is Dignitas International, a Malawi-based charity that has provided medical assistance to 200,000 residents in the land-locked nation since 2004.

How bitcoin can help

Driven by a desire to promote human dignity, the charity takes a three-pronged approach to tackling HIV: at the lab, on the ground and in the meeting rooms of local government.

However, the organisation is now turning its attention to a challenge of an entirely different kind: transaction fees.

"Dignitas has to deal with high credit card and transaction fees on all of our donations [...] which can range between 2-5%," explained Anne Connelly, the charity's director of fundraising and marketing. She added:

"Every donation dollar we lose in a currency exchange or a transfer fee is a dollar that is not going to help someone in need."

It is this frustration with existing third-party payment processors and credit card companies that fuelled the charity's recent decision to accept bitcoin.

With the initiative, Dignitas hopes to reach a whole new pool of donors for whom bitcoin technology can help pass these incremental savings on to life-changing projects in the region.

"[We're seeking] people who want to fully integrate bitcoin into their daily lives – including their charitable giving," Connelly said.

Non-profits who have already taken the plunge have witnessed a generous response from the bitcoin community, just this week Wikipedia received over $140,000 in bitcoin in its first seven days of accepting the digital currency.

Tax savings and anonymity

Although payment processors Coinbase and BitPay have waived fees for non-profits in the US, Dignitas, which is headquartered in Toronto, uses Canadian exchange Virtex to convert the bitcoin it receives into Canadian dollars.

On average each conversion charges the charity a fee between 0.2% and 0.75%, significantly less than via traditional means.

But how does a charity accepting a relatively anonymous and non-refundable digital currency avoid compromising the legitimacy or legality of its donations?

Connelly says Dignitas plans to treat bitcoin donors like those who pay by cash or credit card. In order to receive a tax receipt, bitcoiners can opt to disclose their personal information, including their email, name and location, which the charity will keep on file.

Alternatively, users can stay anonymous – well, pseudonymous – and donate directly via the Dignitas wallet address, a potential draw for the privacy-conscious.

Bitcoin in Africa

Reducing fees on donations within Canada is only half the battle, however, as the charity still faces a whole host of charges when transferring funds out to its Malawi projects.

A quick calculation on popular remittance platform MoneyGram reveals that sending CA$10 to Malawi will incur a CA$10 fee. This means the recipient collecting cash at one of Lilongwe's local MoneyGram agents will only receive around MWK 3,323 (Malawian Kwacha), a cut of 50%.

Although higher amounts will incur smaller charges, on average remitting $200 to the region will encounter fees of 12%, twice the global average.

However, Africa's bureaucratic cash payment systems are under threat. Mobile money networks like Kenya's M-Pesa have seen a boom in popularity offering a cheap, fast and accessible alternative to cash. These services let users send and receive funds via SMS and even offer the ability to pay bills or take out micro-loans. 

Although the majority of Malawians live in rural households with little to no access to electricity, more than half now have access to a mobile network. Connelly is optimistic about bitcoin's potential in the region for this reason:

"The ability to transfer funds through mobile phones is widespread [...] so, I would predict fast adoption of cryptocurrencies when they hit the continent."

Indeed, residents who have never had a traditional bank account already use e-money on a day-to-day basis. Though bitcoin usage on the continent remains low, it holds a promising target market for bitcoin services like 37Coins, a universally-compatible SMS bitcoin wallet, as well as bitcoin remittance platforms like BitPesa.

Charity 2.0

The relationship between bitcoin and charity doesn't stop at donations and payments. Dubbed 'charity 2.0', a new breed of cryptocurrencies are tackling causes within their very code.

Gamified altcoin projects like solarcoin incentivise users not for their 'proof of work' but for their 'proof of good'. Users are rewarded with coins when they produce electricity via photovoltaic solar panels, as the project aims to promote renewable energy. 

Researchers are also investigating how the bitcoin network's cumulative computing power can be harnessed for scientific purposes.

Projects like [email protected], for example, uses idle processing power from a network of volunteers to simulate the folding – and crucially, misfolding – of proteins. In turn, these calculations inform research and drug design for a number of diseases, including Alzheimer’s, Cancer, Diabetes and Malaria.

The charity sector has much to benefit from this crossover with open-source technologies. For organisations like Dignitas, now in its 10th year, the possibilities are seemingly endless:

"The charitable sector has the most to gain from technologies like bitcoin [...] We've just started to scratch the surface of what it can help us achieve."

CharityDignitas InternationalMalawiTransaction Fees

Don't miss a single story

There are 2 comments. Press to view.