By Maggie Yang
Do you find it hard to trust a charity when you are donating? Do you feel incapable of choosing between projects as an impact investor? Do you consider it increasingly painful to obtain funding for your start-up or charity project?
Such questions have also bothered Alice’s co-founders Areti Kampyli and Raphaël Mazet in their business of running an online campaigning platform in 2015. They discovered that whenever users were asked to decide whether to donate or participate in a campaign, the latter option always prevailed. Only a few were willing to give money to the platform. Apart from that, it was and is still a common notion that social funding, investment and donations are often embezzled or mismanaged. After some research, it dawned on them that there was not enough trust from the public towards the use of their donation money. Without sustainable financial investment, social organizations and charities might be out on a limb in the market. Social impact would be less significant as it was designed to be.
The disastrous consequence then prompted them to find a solution. Raphaël stumbled upon the idea of applying a brand-new technology called Ethereum blockchain, in supplying donors with transparent data on how their money had been used in activities organized by charities. With the help of Jakub Wojciechowski, their developer and current chief technology officer, Alice eventually came into existence in 2016.
Meet Alice
Alice is a decentralized social impact network leveraging Ethereum blockchain to help social organizations, including charities, social enterprises, and NGOs to operate projects transparently. It provides funders like philanthropic organizations, impact investors and small donors, access to data such as the goals that a project has achieved and the use of the donated money. Social organizations receive payments based on these data.
The Data-Land
The Data-land refers to a blockchain. As the name suggests, it is a chain of blocks that contains data about a transaction and the parties involved in it. It is hard to temper with the blocks because each contains a “previous hash” (a hash is like a unique QR code) that points to the previous block, which means replacing one block means invalidating the rest of the blocks on the blockchain. In addition, its application of peer-to-peer network allows everyone to join and to change any block requires consensus from over half of the users of the network. Hence, it is almost impossible to manipulate the stored information. The Ethereum blockchain adopted by Alice is specially designed to support “smart contracts”, which are digital contracts stored in a blockchain indicating that they are also distributed and immutable. All these features guarantee reliable transparency.
What is Alice doing in Data-land?
In the first phase of their development, Alice established a donation platform with a pilot project run by a charity called St. Mungo’s that aims to assist 15 homeless people away from the streets of London. The project was validated by the Mayor of London and supported by 200 registered donors. On the webpage of their own account, each of these donors were able to track how many goals were accomplished and how their donation was spent.
At the moment, Alice is transitioning from focusing solely on donation to tapping into impact investment. They are currently working on a platform for impact management and impact investing where more data would be available such as demographics and progress. In terms of impact management, the services are intended for social organizations who would like to see what projects are successful and what they have gone through, thus serving as a learning zone for these organizations to create more efficient and effective projects built on others’ experiences and lessons.
Similarly, impact investors can also make good use of the network to decipher the trend of impact investment by looking into the successes and failures of all registered projects, and thus make more sensible decisions. This future product entails two advantages. Firstly, transaction costs will be greatly reduced with the help of the network. Traditionally, to keep track of the project, one cannot avoid the administrative burdens of reporting that incur additional costs. With Alice, reporting is integrated into the platform that determines whether to grant the payment or not, so no further effort or cost is needed. Secondly, as all projects are displayed for the clients, comparison incentives will be created for different projects to search for best practices that minimize costs while achieving pleasing results.
Alice financially benefits from the network through charging a certain amount out of the donation when the project goals have been achieved. For the sophisticated services in the future, reasonable payments will be required once clients, including both project developers and impact investors, request for access to data.
Alice’s Challenges
Just like Alice who fell into trouble in Wonderland, Alice the transparency platform also encountered difficulties when it was first launched. As blockchain technology was still young and less heard of in that period, it was difficult for Alice to successfully convince people that the platform would work wonders for both investment and social projects. However, as the trend swept across the world, relevant companies started to approach Alice. In retrospect, there is no denying that Alice is fairly lucky to have spotted the very bit of potential in combining blockchain and social impact and entered the market as a pioneer. According to co-founder Areti, there are other blockchain companies catering to other issues in the social sector, but what is amazing is that the seeming competition usually turns into cooperation thanks to the special nature of blockchain and their common pursuit to bring about social impacts.
Alice looking ahead
Alice is currently preparing pilots with both small and big charities. The first few projects will be on a small scale to further validate the platform and its mission. As a unique linkage between social organizations and funders, it may one day become a global standard, as a great tool for transparency, facilitating the funding of projects that endeavor to make the world a better place.
Social media info: https://twitter.com/alice_si_
Visit their website: www.alice.si
