Problem

Nonprofits face serious challenges regarding trust: About one-third of Americans don’t trust charitable groups to spend their funds well, and more than 60% of people globally don’t have faith that groups can accomplish their missions.

Currently, nonprofits and charities suffer from a lack of transparency concerning how donations are allocated. Third-party websites that track charities and the quality of their donation transparency have emerged in an attempt to provide people with peace of mind when they contribute to a cause or organization. Nonprofits with a proven transparency record average 53% more in contributions the following year compared to organizations that didn’t have the same track record.

How can blockchain technology improve social sector organizational transparency? Can blockchain technology be leveraged to track the value received via cash and item donations while enhancing trust with donor audiences?

Solution

Recognizing the desire from donors to verify precisely where their money goes, LUXARITY partnered with ConsenSys Social Impact to register and track donations from their annual pre-loved luxury pop-up sale on the blockchain.

Together, the two organizations established a blockchain-based platform that brings unprecedented transparency and accountability into the tracking of charitable donations. On the platform, customers have the opportunity to decide which cause their donations would fund — including education on ethical consumption, environmental causes, and recycling efforts.

LUXARITY is the social venture arm of the Lane Crawford Joyce Group (LCJG), Asia’s premier fashion retail and brand management group.

Impact

The proof-of-concept application hosted the following results after the 2018 LUXARITY pop-up event:

Overall, the pop-up accrued 586 orders and served 452 unique customers to raise a total of $586,532 HKD. 25% of the orders were allocated using the LUXARITY platform, resulting in 33% ($196,017 HKD) of total sales being directly allocated by customers to HKRITA Research, the SCAD HK Education Grant, and the Parsons Educational Grant. Customers who had more than three orders had a much higher probability of going to the LUXARITY pop-up website and choosing where to allocate their order proceeds in contrast to consumers that had made only one or two orders. The below table provides a high-level statistical summary of the performance of the pop-up.

Learn More

You may learn more about the project here.

Role

Project Lead
Head Blockchain Architect & Blockchain Engineer

Luxarity: Blockchain Case Study for Tracking Donations and Ensuring Trust