Charity is NOT Inclusive
We will discuss how Charity Operates today and what we could do to improve the culture.
What is a Charity?
A Charity or Non Profit is an Organization that provides acts of service to those in need. Acts of service can include;
- Providing food and other supplies
- Providing free health care or accommodation
- Fighting poverty or injustice and many more.
Charities and Non-Profits are not able to "profit" in the conventional ways a "for profit" does.
These Organizations are able to claim tax free status to help conduct their business .
While this is great, the benefits come with added reporting responsibilities. A strict guideline must be in place when recording transactions and tax records. Employees and other essentials are all calculated as part of 'Administration costs".
Admin cost is a phrase loosely used in todays reporting. Some Nonprofits report low administration costs below 5% while others report much higher. This is often the most looked at statistic and the most judged upon. Which takes us to our next part...
How do Charities report donations?
In this example, we will use Australia's Charity reporting as an example as this Country has the highest reporting standards in the World.
The reporting for a Charity or Nonprofit in Australia consists of these things;
- A statement of income and expenditure
- A balance sheet and,
- an Auditors report.
These are costs associated with doing business. For example;
- Marketing or promotional material
- Employee wages. Many larger Charities use paid workers.
These costs can vary greatly depending on what type of Charity. In most cases, it is also unfair to judge a Charity or Nonprofit by it's admin margin.
How do charities fundraise?
There are many ways to fundraise, below are some common ways;
- Commercial Fundraising Firms
- Bake sales and other crowdfunding sources
- Fee for Service
- Subscriptions
- Doorknock appeals
Serious issues within the current Charity Culture
Charity as a whole has been under the microscope in recent years due to cases of fraud. Transparency is something the Sector is not used to. A "set and forget" mentality has been given to Charity for many years, it is time we reassessed what "Charity" means.
Charity fraud is a specific phrase used to describe theft of donations. Many have been caught mishandling public donations, grants and other goods. Charity fraud comes in various styles, a common type is tax evasion. The case could be argued that micropayments are difficult to track and report.
Outside of the obvious "bad" areas of the sector, we should also discuss "Charity Culture". From both a Charity perspective and Individual.
Charities
What we are seeing is a decline in donations and increase of the need for nonprofit services. Nonprofits are desperate for donations but due to economic conditions, they have slowed.
This news is rarely heard about but the fact is, thousands of small charities are going "out of business". They struggle, put many hours of free time into the welfare of others only to go under because of a lack of awareness.
Large Charities only seem to care about expanding and profit. But soon forget about the minor non profits doing excellent work too. Feeding those 30 people on the streets of Melbourne Australia. The simple fact is, they all seem to be in competition with each other. Happy to watch a "competitor close shop.
This creates a culture of manipulation, honest as it may be. Many fundraisers are employed to get the cash from your pockets, with any tactic available. They are in the business of relieving you from your money, a sales person for Charity.
Individuals
Individual from the middle class down are much more skeptical about what they get for the dollar. They feel as if the donation money is thrown into the toilet. Day after day they continue to see no change in the world. If anything, they see it getting worse for them and those around them.
For decades, individuals have been propagandized by fear porn. Advertisements of African children starving, drinking dirty water. They can't understand why billions are being sent to banking institutions and hedge funds but not to world poverty.
When asked if they trust charities, well over half of individuals respond with "No" as seen here. This issue has NOT been addressed by the sector at all, but instead remains under the rug. Until trust, transparency and a reason to give becomes a priority, the Charity Sector will continue to stall.
How do we address such issues?
The world is becoming increasingly more complex, people are expecting more for their money. They are relying on technology for their every move. Charity is a form of financial industry. Money is moved and reporting and recording is extremely difficult.
Until recent innovations in the finance sector involving blockchain, we were limited by borders. But with new laws and regulations being talked about, we can start to discuss new ways to move money around.
Blockchain technology gives us the ability to record transactions in a decentralized manner. This means each transaction is recorded on many different computers increasing security a lot. It also allows individuals to view transactions if the blockchain is public.
When coupled with the use of a cryptocurrency smart contract, we are able to move value instantly. This happens by never the logic of writing each transaction in a digital ledger. This enables the money to change ownership, but not move. It simply removes access of the tokens from the owner to the purchaser. It feels as if the money moves when in reality it changes hands.
Why are you talking blockchain?
The fact is we don't know until we know. Blockchain offers a unique area of interest to Charity. With public transactions, you gain trust. Anyone can check and trace where the tokens go after all, it is public money right?
Fundraising doesn't have to be contained to your local shopping center. It can be conducted on a world stage. The facts is some feel more obliged to give to overseas as opposed to locally. A token economy is the best and easiest way to send money.
Blockchain can also be a great "anti-theft instrument" for the nonprofit sector. The fact that it removes the need for nearly all staff to handle money. This is where many cases of fraud and theft happen, we can lower this by many times.
You can trace every single transaction from start to finish of a tokens life. It is really quite amazing.
At this point in human interaction, many have withdrawn to look after themselves and those around them. There are many reasons, some economic and some beliefs but they are all being ignored by the Charity Sector.
Its time we paid attention to the needs of those we seek help from.
Charity can become financially inclusive
Isn't the point of "Charity" to lift those in hardship out and into a new life through collective help?
Many won't give to an individual but when a known charity logo is pushed in front of them they have a completely different feeling. We almost have a perspective of charity so ingrained that we only believe change comes from these Organizations.
Remembering "why" we perform Charity
- Over 96% percent feel the need to "give back" when they have good fortune
- Religious or Personal beliefs and experiences
- A sense of warmth and feel good
- One could argue "tax breaks" also but this has been found to be of little effect and often misdirected upon. Not to say there hasn't been a favor to certain industries.
We are creatures that rely upon one and others interactions. Our DNA is designed in this way, we are inherently creatures that feel things like empathy. We are emotionally driven creatures, often mimicking those around us.
Charity is the one true way to show love to another. We each have our own passions and personal preferences. But the bigger picture should always remain the focus.
The unfortunate part of this industry, and it is an industry. Is that it has never been managed or triaged. There is no direction, at least in site of the publics view. Little to no change has happened and yet trillions of dollars have been poured in over decades. Much of which to religious Organizations, in fact over 29% annually est.
No sustainable practices have been implemented and if anything, the places we help are left worse off.
Yet year after year, the "Sector" continues to rebrand old ways to take more money. Understandably, some nonprofits are medical ongoing and as such have an ever changing role. But for majority of the big 4;
- Poverty
- Hunger
- Homelessness
- Education
The money pit is bottomless. Personal giving annually is $300b and even though world hunger is only suppose to be $29b to SOLVE. What are we missing here?
The Charity Culture needs changing!
If we expect to help the millions that fall through the gaps of Charity all over the world, we will need direction. We need a new culture and we need awareness that PROBLEMS ACTUALLY DO EXIST WITHIN THE SECTOR.
Those that work within the sector are under pressure to bring in donations. Why can't they focus on creating a more inclusive culture?
With current revolutions in technology especially DeFi, we can reshape what Charity means and how others can take part.
Not only do you have to be a donator, you can be an investor in Charity, a collector of Charity and a Social Entrepreneur.
It's time we step back and help each other rather than compete with one an other. The 150 million people going hungry tonight don't deserve to when others are throwing more than they need away.
Some things should be of higher priority, and that's ok. We triage in hospitals, why not Charity?
