The Big Interview

Federico Malvezzi: How blockchain is being used to make charities more transparent

AidCoin's blockchain technology will be used to enable donors to track where their money is being spent by charities

Blockchain has the potential to make a huge difference to the third sector – increasing trust where it has been lost and ensuring transparency and efficiency.

There are 700bn charitable donations every year globally and 70% of international brands are involved in charity in some capacity.

Issues with charities and crypto include transaction speed if you think about natural disasters and transaction costs, as well as lack of transparency.

To address this gap, AidCoin has been established, supported by the team behind Charity Stars, the leading online auction site which donates 85% to charities.

Tracked and transparent

AidCoin consists of AidChain, the browser where donors meet with charities and service providers and donations are tracked and transparent. AidPay is an embeddable widget that can be used by charities in different cryptocurrencies and converted to the AidCoin token, an ERC20 token provided through Ethereum.

Federico Malvezzi, the managing director of AidCoin, says: “No record can be erased on the blockchain meaning traceable accountability and zero fraud and there’s no need for middlemen or transaction fees.

“Smart contracts could mean that if certain predetermined conditions aren’t fulfilled, donors would receive their donations back or be able to redirect them towards more deserving or pressing causes.

“I truly believe we can bring back transparency and efficiency to the charity sector. Crypto donations they are cheap, easy and trackable – even cross border for the unbanked.”

Bigger problems

He became interested in blockchain as “I wanted to solve the bigger problems and I investigated how blockchain could help.”

Previously, he worked as founder and CEO of Dryve, a car maintenance app based in Los Angeles, and he has 12 years’ experience in management consulting with companies like Bain and Co. He’s admittedly “obsessed with blockchain.”

The objective, he says, is to bring “transparency and tracking of how funds are spent by the charities.”

He says aside from fundraising, the wildlife charity WWF has used blockchain technology to track assets – including tuna fish to prevent and fight against crimes and illegal practices in the fishing industry.

Smart contracts

“If blockchain lets us think charities will behave properly – because transactions are transparent – think about smart contracts. The funds will be deployed as predetermined by the smart contracts itself.”

For example, a charity in Africa that is building a school: “They will receive the funds to pay for the labour only after they have bought the land and they have bought the supplies, the materials supplied to build the school.”

He acknowledges: “Charities are not massively adopting blockchain because of lack of IT expertise, lack of regulation and lack of resources and especially the current tools the current solutions are not designed to meet non-profit needs.”

But he believes stablecoins are important for mass adoption and there is “a big spectrum of different use cases and needs.”


He says the high volatility of cryptocurrency is  “exciting or scary but it is not for all. No one should invest more than they are willing to lose.”

Blockchain by definition is a trust machine and this concept can be applied to many different sectors. When we see an industry as opaque as the charity sector it is great to see it use blockchain.

“It is a great platform for the charity sector as a whole and the reason is because of trust and you can’t argue about that as everything is immutable and transparent.”

He points out that in 2010, the Red Cross raised more than $500,000 to provide homes for 130,000 people in Haiti following a natural disaster. But after five years, only six homes had been built.


Some of the obstacles to overcome include transactions speed and cost, opacity of funds and low efficiency of funds management.

With AidPay, charities have access to an easy user interface wallet for those people that are not used to using crypto.

He says 43% of people questioned say they don’t trust charities and 59% say they would donate more if they knew how the money was being spent.

He is influenced by entrepreneurs who “put purpose before achievement” as people embrace the technology.

“We are positioning ourselves at the intersection of blockchain and charities. The clear benefit to them is it will bring more funds and provide a better user experience so they are incentivised.”

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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