How bitcoin is helping in Africa drop by drop

Tuesday 01 April 2014

You might be familiar with these sorts of calls to action in the media: “For just $100 you can provide clean, safe water for an entire family in Africa.”

The phrase is changing.

Replace the amount with 0.25 bitcoins (at today’s price) and you will have the modern-day version.

The Water Project, a charitable organization, which funds sustainable water projects in sub-Saharan Africa, is embracing cryptocurrencies.

The challenges facing charities today go beyond the most obvious tasks of raising money and awareness. Even once the money is in the bank, getting it to the people in need and funding the target projects can be an expensive, and risky, business.

As Peter Chasse, President of The Water Project, explains in his blog: “Today, small grants are too expensive to send. Large grants are too risky to release to untested partners.”

That is after you take into account the other expenses such as exchange rate arbitrage.

The Water Project - Rwanda construction

Well construction in Rwanda, The Water Project

These are some of the reasons that the Water Project has “welcomed cryptos”. The charity operates in Burkina Faso, Kenya, Rwanda, Sierra Leone and Uganda and has previously worked in South Sudan and India. Many of their projects involve building wells in communities where the only alternative water sources are diseased and dirty.

Rallying the cryptocurrency community

Recently, with the help of several coin communities, The Water Project has raised money to help fund some of these many campaigns. “We have had a fantastic response from various coin communities,” says Peter Chasse, “including Worldcoin, VertCoin, NobleCoin and Bitcoin, through the BitGive Foundation."

"It's an entirely encouraging response honestly and it's been unsolicited.

These folks reached out to us with a desire to do something good within their coin communities.”

- Peter Chasse, The Water Project

The BitGive Foundation chose to raise funds for The Water Project as part of its mission as a global giving platform, focusing on areas of greatest need. “We are currently focused on public health and environmental causes,” explains founder, Connie Gallippi, “and clean, safe water is something that really falls under both categories. Additionally, they recently added cryptocurrencies to their donation platform.”

The Water Project acknowledges how hard the BitGive Foundation is working to rally support amongst bitcoiners. “They are passionate about revealing some of the incredibly valuable contributions the Bitcoin community can make to this and other philanthropic efforts, in both donations and vision for the future of BTC in the developing world,” Chasse says.

The Africa challenge

The Water Project accepts bitcoin via BitScanThe benefits of using cryptocurrencies such as bitcoin in regions like Africa are huge and help overcome some of the many problems facing charities trying to get funds to those in need. The global access and lack of middle man means the cause can benefit directly.

“A lot of the funding donated in fiat currencies is significantly diminished through government processes and oversight, transaction fees, and corruption.

The reduction in fees and corruption via direct transactions means more funding is actually going to the intended cause.”

- Connie Gallippi, The BitGive Foundation

Chasse echoes this point in his blog, “From credit card donation processing fees, to domestic banking fees, to the costly overseas transfer of funds with its concomitant dilution through currency trading arbitrage and trade commissions, and finally to the local bank fees in Kenya or Rwanda, a lot of folks take significant "cuts" along the way. Most of these fees are obscured and non-negotiable. We're told the process is difficult, cumbersome and expensive, but since we can't see it we remain unconvinced.”

With mobile payment systems such as M-pesa, already operating successfully in Kenya and parts of Tanzania, it is an area the Water Project is looking at closely.“I think it will be very interesting to see how BTC is integrated into systems like M-Pesa. For non-profits, moving money into these countries has always been entirely too expensive. There's a near-term opportunity to do more good with every dollar by lower transactions costs,” says Chasse.

The BitGive Foundation also see M-Pesa as a potential opportunity. “The integration of Bitcoin or other cryptocurrencies into that system open it up to a global market for commerce, donations, influence, and ultimately impact. This would be revolutionary and break the mold as we know it,” says Gallippi.

Progress and the future

So far, The BitGive Foundation have funded over 25% of their $10,000 goal for The Water Project and hope that now “the dust has settled” from the fallout of MtGox and the revelations over Satoshi Nakamoto, donations will start to pick up again.

The foundation, currently in its infancy, has very limited resources, allowing them to focus on only one campaign at a time as well as fundraising for BitGive itself to help achieve their ultimate goal of raising a multi-million dollar investment fund. Gallippi says, “Once we have an organization with staffing and giving funds, we hope to be giving on many levels and to many organizations at any given time.”

The Water Project currently raises funds for up to 200 projects a year and the money they receive through BitGive will be assigned to a specific location, probably within Kenya.

If you would like to help raise funds for The Water Project, you can donate bitcoins via The BitGive Foundation here:

Louise Goss

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