Introducing the Future of Donations on Blockchain: Heritage
Developed by the Airbus Foundation, Heritage is a decentralized framework to help the Foundation receive and manage donations for itself and some other charitable organizations it works with using the Ethereum blockchain. Since March 2013 when the open source blockchain project commenced at Airbus’ Silicon Valley outpost A3, it has sought to utilize Ethereum in assisting the Foundation’s disaster relief and emergency response work around the world.
Heritage Project Framework
As part of the Airbus Foundation’s 10th anniversary, it will be integrated with an internal Airbus fundraising platform ahead of its release to the developer community as open source under the BSD3 license. This will be done to encourage replication, expansion and independent development of the project by the blockchain community.
The current paradigm of charity unavoidably includes the involvement of several intermediaries since the narrow remit of non-profit organizations makes it necessary for them to outsource several non-core functions. Expectedly, this creates an accounting problem and raises questions about the integrity of the charity funds disbursement process and who is accountable for what.
Heritage proposes to solve this fundamental problem facing the charity industry by using the blockchain to make the entire process transparent and automated. Under the framework, every donation has attached to it a specific cause it is supporting, the Ethereum wallet address of the donor, the amount donated, and even tax information required for corporate tax deductions and filings.
Instead of recording donations as mere entries on a blockchain record, Heritage records them as ERC-721 tokens -a type of non-fungible token (NFT) – which the token donor then owns. This effectively allows the donor to keep an immutable record of their charitable giving in the form of a unique token that can be used for a variety of purposes including tax filings as mentioned earlier.
When a donation is made through Heritage, it is recorded alongside the giver’s Ethereum wallet address and donation amount. The platform also can record and issue 501(c)(3) donation certificate data, which givers can use to claim tax deductions. All this information is encoded in the form of an ERC-721 token, which the donor keeps and can store as a part of a “charity portfolio.”
The total transparency of the platform and its ability to help investors build a “portfolio” of their charitable activities is an attempt to solve the issues related to charity donations using a system that is fundamentally different from what is currently obtainable. It addresses the increasingly serious problem of trust within the charity space, as people balk at charity fundraising due to fears that the funds do not reach the intended recipients in any meaningful amounts.
To this end, Heritage has announced that it is on the lookout for experienced NodeJS/ES6 and Solidity/dApp developers with experience working with the Ethereum Virtual Machine to join the team and help the project achieve its goals.
Role of Ethereum
Where blockchain technology development within the aviation ecosystem has generally focused on logistics and supply chain management, Airbus Foundation has become the first strategic partner to see the value in Heritage’s blockchain framework. This is due in no small part to its use of Ethereum, which opens the space to a new class of investors.
Heritage will further be integrated with an internal Airbus Foundation fundraising platform, and the project’s blockchain code will be made available on an open source basis under a BSD3 license.
Describing the technical process used with the Ethereum blockchain by Heritage, a quote from the company’s website reads:
“Heritage records donation data as an ERC-721 token owned by the donor. When donors make a donation through Heritage, the donation is recorded along with the donor’s Ethereum address and donation amount. Heritage can also record and issue 501(c)(3) donation certificate information, information required to file taxable deductions. This information will be issued as an ERC-721 non-fungible asset and will allow donors to easily build a portfolio of their donations.”
An essential aspect of the work Heritage is doing about the issuance of non-fungible tokens for managing charity portfolios over the Ethereum blockchain is that of keeping records substantially more secure than off-chain storage options.
Aiming to open up the charity funding space and raise standards in the growing space, Heritage works with a growing list of charity organizations and other stakeholders in the space.
These organizations include Airline Ambassadors, a non-profit that leverages aviation partnerships to help vulnerable children with resources such as humanitarian aid and medical escorts. Heritage also works with HartSong Ranch Animal Sanctuary and the Museum of Art, Design, and Entertainment (MADE).
Already, quite some philanthropic organizations accept cryptocurrency donations, one of which is Fidelity Charitable, owned by Fidelity Investments. Since 2015, the organization has received cryptocurrency donations, and it reported a tenfold growth in crypto donation volume in 2017, which indicates the growing importance of crypto to charity.
It revealed last year that it received $69 million in crypto donations, which came as a surprise even to company officials. Going forward, Fidelity Charitable says that it expects this trend to grow as cryptocurrencies make it easier for a new class of investors to give to charity.
Though crypto donations are as yet still far from becoming the mainstream norm, Airbus Foundation believes that the introduction of platforms like Heritage will accelerate the trend and make crypto donations more popular.
Other organizations Heritage works with include Maker, 0x Protocol, and Plasma. Maker is a decentralized autonomous organization (DAO) built on the Ethereum blockchain which works to keep its stablecoin called Dai relatively stable against the U.S. Dollar.
Dai is of particular interest to Heritage because it presents an opportunity to protect charities that affect donations from the vagaries and movements of the crypto market, and it also potentially serves as an off-ramp for charities to liquidate crypto holdings into fiat.
0x Protocol on its part is a permissionless framework for ERC20 tokens to be traded across the Ethereum blockchain. Heritage intends to use 0x’s system to explore how charities may create and issue donations without needing to have any exposure whatsoever to cryptocurrency beyond a custodial or exchange address.
Heritage is also interested in Plasma because it is an off-chain scaling solution that potentially enables thousands of transactions to be conducted per second while keeping the underlying assets protected on a decentralized base layer.
Finally, Heritage is collaborating with UNICEF to host an upcoming hackathon focused on blockchain development within the charity space.