Chain Reaction: Revolutionizing Public Aid with Web3 | SheFi Summit Bangkok

Transcript

[Music] hey thanks so much for being here and thanks for coming out of your lunch break to listen to me talk about the humanitarian Aid sector which is a sector that probably a lot of you have been thinking about in terms of like making direct donations to people much faster working with digital currency but I'm going to focus a little bit more on sort of the boring infrastructure pieces of the industry some things that you might not be as familiar with uh in the aid sector we also do air drops they are just a very different Beast uh right now in Sudan one of the most pressing humanitarian crises of the world one of

the only ways to get cash in for programming is to actually physically drop it with a helicopter um this is the case in places like darur part of the reason why that's happening is because even the banks have stopped transferring cash between branches so imagine you're a large humanitarian organization you're running programming of 2 to 3 million every month and you have no way to get cash on the ground to pay staff to buy essential medicines or to provide cash to communities that are in need so that's the situation in darur in Sudan right now one of our partners came to us and asked if there was anything we could

do about it and we went back and forth with them for months and months and months and we said you know you don't have to give everyone cash cash in hand there are other ways that you could make money move in this place and after several months and a lot of cajoling they finally said they were willing to consider some other opportunities and luckily we just we just finished a market survey in which we realized that 80% of vendors in our for so people selling medicine the people selling bags of rice actually said that they would be perfectly willing to accept payment and stable coin so in the next couple of months we're going to roll out a whole payment solution system for that partner that will allow them to unlock three3

to4 million do a month in Aid that could previously not enter the country unless it was being dropped off the back of a un helicopter so what do we mean by public aid what I'm going to be talking about today is primarily what we consider International Aid so that's going to be money that's allocated through taxpayer dollars that comes through a specific government and that is generally mov moving through a system of various different Aid implementing actors what does that mean it means that the Save The Childrens of the world are not primarily funded by individual donations or corporate donations it means that something like 60 to 70% of all of the money that save the children or Danish Refugee Council International Rescue committee these big International

Aid organizations the vast majority of their funding is coming from money that they are managing that originated with a donor government so for instance the US government The Bureau for humanitarian Affairs their operating budget is anywhere from 15 to2 billion dollar every year they don't manage that themselves they're not out on the ground delivering bags of rice rather they're giving money to organizations like save the children who manage huge programs all over the world private and corporate giving is also another form of Public Aid that's generally you know a smaller piece of the pie but still an important one and generally they have a lot more f ibility in terms of the way they move money right if you're handling public

funds you have to be a pretty good Steward of those funds and there tend to be a lot of restrictions around what you can do with it and how you have to report on what you're doing with it private and corporate giving has a little bit more flexibility the problem tends to be trust if you're a private individual and you want to make a donation in let's say a place like Thailand who do you give to how do you know that an organization is a good organization that they're working in a way that's Trust worth Y and that your money is actually going to get where you want it to go crowdfunding also a huge opportunity for public aid uh I come from the United States so you'll see you know in the US people raising funds to cover their medical costs but there are

other ways that people use those tools unfortunately a lot of those platforms actually block people from what we could consider Global majority countries so that means that if you're trying to raise funds in Palestine you have to get somebody in the United States or in Europe to sponsor your accounts which is p journalistic and a little bit insulting that we can't trust people in another country just because they don't have the same kinds of names or they don't look like us so huge opportunity in terms of trying to rearrange that sector so that it's as easy to do International Aid as it is to do Mutual Aid locally so talking about by the numbers and I'm not sure if you can actually see how this turns up here but that's okay that big number 20 220

billion that is the projected amount of international Aid that's going to flow from donor governments around the world across the world so that is an absolutely eye-wateringly big number right it's huge 125 million is the amount of money that's ever been given in crypto donations so there's a pretty big gap there in terms of how significant these various different pieces of the pie are but generally when we come to crypto conferences people are talking a lot about direct giving right how can we in crypto make crypto donations to people who are willing to accept crypto um and that's really good it's important that we do make those personal those private donations more efficiently but we're missing out on these other absolutely enormous pots of

funding that needs to move and could benefit from moving much more efficiently koip is very focused on that 220 billion doll industry we work with the world's largest International Aid organizations to allow them to transact on public blockchains and to have all the documentation that they need on either side of that transaction to actually be able to comply with the requirements they have from donors when those donors are bilateral governments like the United States or the Danish the problem is the traditional Finance was not built for international AIDS so we've had a number of very significant problems trying to move money to the different countries where we work so for instance we have delays in moving money

that are so significant that often it can take 3 to four months from the time somebody says yes we approve this payment to the time it actually arrives in the country where it's been allocated we also have this issue of not knowing where AID money always turns up that number 21 million unaccounted for in Somalia doesn't even touch the sides of how much International Aid funding has gone missing over the last decade something like a100 million alone was lost during the Syrian Civil War just simply by the Assad regime fixing the exchange rate between the dollar and the local currency so anyone that followed or that made transactions into banks that using that official exchange rate we accidentally funding the Assad regime

not ideal so just to make this more concrete let's say an organization is looking for funding from one of these large bilateral donor a agencies or one of those large inos that manage that bilateral funding they submit a grant which on average takes an organization 30 to 60 days to complete I don't know probably a few of you in this room have applied for web 3 grants if you found that process long this is an entirely new level of bureaucratic Castle you know we in the aid sector are always really grateful for web three grant opportunities because it takes us so much less time to to fill those forms out than it does to apply for a standard Grant so let's say you take months and months to to deliver this thing you get it submitted and then you wait it is not uncommon for large donor agencies like

the US government to actually require a year to a year and a half to finally decide who's going to win that funding so you could be sat waiting for a very long time to know whether or not you're going to get funding for something that you proposed a year ago so you might not have all the same people on your team anymore you might not have all the same focus and maybe the needs of that humanitarian crisis have completely moved on but now you're stuck you're tied into to what you wrote that grant for a year ago then somebody in a finance office in Oslo or in Washington DC finally gets the approval to make the payment and they try to send that out I could take a couple of weeks because that's imagine they're sending payments to 40 or 60 different humanitarian emergencies globally and they're sending

payments all day every day so maybe it goes to the back of the queue and you're waiting for several weeks for that payment to even be init initiated and then on the way there it goes through multiple intermediary Banks you're paying fees at every step of the way and sometimes those intermediary Banks decide to just sit on it for instance the World Bank had some funding that they were allocating for the Ebola emergency it had to travel through an intermediary Bank in Kenya and that intermediary Bank saw a really exciting opportunity to make a bit of cash they they just sat on it for no reason they sat on this funding $500 million for several months to generate interest and then when they finally released the funding they had taken something like a $75 million service fee that's what they

do to the World Bank imagine what they do to larger organizations now this is for a local partner in Myanmar an amazing organization that's supporting about 800 or 8,000 Refugee families every month and uh that's both for cash support and for food support so an absolutely incredible organization when you scan that QR code you're actually just going to see a digital wallet that they've set up now I should flag that because they are a refugee organization they are operating their their finances out of a safe country this is an organization that we've personally vetted here's how web 3 helps right if you were to scan that QR code you would be able to submit a transaction to them directly you would be able to work with a smart contract to say I'm going to

send you funding for this exact purpose you'd be able to verify their Identity On chain track their activities you'd be able to send that payment instantly with fewer funds fewer intermediaries and you'd be able to have the transparency of seeing whether or not their wallet was interacting with anything that had been affected by sanctions or or any other issues AML Etc so here's a few tools that we love that are working in exactly this space there's a stellar dispersement platform an incredible group cache dispersement tool we also love oracles that allow us to trigger payments for emergency aid based on specific events that could be bad weather it could be specific needs related to migration and displacement lots of opportunities to shorten those timelines using oracles we also love USD

ussd Bridges because it means that you can go straight from a stable coin to mobile money in the many places in the world where the mobile money infrastructure has vastly vastly outpaced traditional Financial infrastructure to give a sense for how this can work in Ukraine the Stellar dispersement tool was used to provide about $5 million in Aid to Ames 2,500 families and it saved the unhcr 30% on that operating budget believe it or not when you send people cash it costs you about two to three times as much to send that payment as it does the in the amount that actually is arrived or is uh distributed in Sudan we're working with the Norwegian Refugee Council and the Danish Refugee Council to decrease the

costs associated with paying their local Partners we've been able to save them 20% on their transactions just by working through smart contracts for allocating those payments to local Partners that's an enormous amount of money saved and it means that that's 20% more money that's going to be used in programs in Somalia we're also building on Stellar an oracle that allows us to distribute payments to local Partners linked to weather events so we'll be able to get money on the ground where it's needed in a matter of hours rather than in a matter of weeks or months that means that communities will be able to get the funding that they need before they experience the worst most acute stresses from that shock rather than having to wait 2 or 3 months to respond they'll have the funding that they need

in place to respond as soon as it's needed so just to close off if you're thinking about building in the space and I would encourage everyone to do so because there's so many opportunities there are a couple of things we've learned along the way that I wanted to share so one of them is learn your history this is not the first time that a bunch of really smart people have tried to revolutionize the aid sector there are a lot of things that you can learn by learning the history of how International Aid has worked how public aid has worked you don't have to start from scratch and what you don't want is to build something that is retracing all of the mistakes that the industry made before so it's worth trying to meet people who are in the aid sector that you can ask questions to like share

ideas and see what they have to say because there might be things that seem like a really good idea that aren't and the quick example I'll give there is that one of our colleagues worked on a program in Afghanistan where they provided some generators and they put them on Wheels because the idea was that those generators would circulate between communities and everyone could take turns using them fast forward two to 3 months no generators to be found they had been wheeled directly into the house of the sort of local Village leader something you probably could have anticipated if you had thought through it but it seemed like a really good idea at the time put the problem first we see this a lot when we're working with partners and especially in web 3 that they have an amazing technology they're really excited about it and they want

people to go and use it in these different places where we work but when you're working with vulnerable populations you can't be testing new things out you can't be giving them a terrible ux experience you have to provide them with something that meets them where they are and that puts their needs before the but it could be cool if we did it that's super important when you're working with vulnerable populations and the third thing is to fit the tech to the user very hard for slow moving large Ino that is mostly focused on keeping people alive to figure out how to use a complicated Bridge solution for example so something that might seem really easy from a web three perspective has to be fit to that user and meeting them where they are and

their level of comfort with that technology which might be really really low so thinking about abstraction in many different ways is probably the best way to ensure that you actually get those kind of users to take advantage of a technology that could genuinely improve their work but they're just never going to get there themselves you really need to bring them there by making sure the technology works for them so if you scan that QR code you've seen the wallet of this local organization that I mentioned and you've been able to see on Lumen scan any of the donations that were sent over the last 15 minutes over the last couple of days I'm ending this here because I want to make the point that when you make donations on blockchain it's not just that you can make those donations more quickly it's that you can actually see

how that partner is using that funding and that's something that we have not ever been able to do that is a fundamental aspect of blockchain that makes it worth using but only if we can use use it in ways that are safe and secure for the end recipients so again if you're interested in building in public goods and specifically in the aid sector we would love to talk to you at koal of we would love to help guide you most of the people on the team are humanitarian Aid workers with something like 15 years of experience and multiple different Aid responses um we're just learning the blockchain piece so we' love to collaborate and find ways to help you bring your technology and your tools to the kinds of populations where it matters most thanks