Ministry of Social Affairs Revokes ACT Permit, Donation Via Blockchain is a Solution
The Indonesian Ministry of Social Affairs (KEMENSOS) has officially revoked the permit for Aksi Cepat Tanggap (ACT) as money and goods collection agency (PUB). The revocation of the permit by the Ministry of Social Affairs was carried out because ACT was indicated to have committed a violation.
However, with the development of technology, fundraising donations can be done using blockchain technology. Previously, fundraising was done with the concept of transfer. Usually, donations are made in fiat currency, but now can it be done using crypto assets?
The concept of donation with blockchain technology may sound foreign. Usually, crypto assets are used to invest and make profits, but now they can be used to donate. The transparency nature of blockchain technology makes it unique as a place for donations.
Ministry of Social Affairs Revokes ACT Permit
The permit for collecting money and goods granted to Aksi Cepat Tanggap (ACT) was revoked by the Ministry of Social Affairs on Wednesday, July 5, 2022. ACT was deemed to have violated Government Regulation №29/1980 regarding the Implementation of Donations Collection Article 6 paragraph (1) which reads “Financing of donation collection efforts a maximum of 10% (ten percent) of the results of the collection of the relevant donations.
Ibnu Khajar as the President of ACT revealed that an average of 13.7% of the proceeds from the collection were used as operational funds for the ACT foundation. This is contrary to the regulations that set a maximum limit of 10% for fundraising financing.
Blockchain Donation Trend
Fundraising programs are generally done using fiat money, but with the development of technology, some fundraising platforms accept crypto assets and NFT as donations. As for the types of crypto assets that are accepted, there are those that accept Bitcoin; Ethereum; or other crypto assets.
Some who have adopted this blockchain donation trend include the Red Cross, Save The Children, United Way, Wikimedia Foundation, and the Electronic Frontier Foundation. Fundraising is done by using an online wallet. The crypto assets that have been collected are then exchanged for fiat currency before being given to the recipient.
Fundraising using crypto assets offers a 0% operational fee for non-profit organizations, whereas traditional fundraisers generally require 2% as a processing fee. So that donations via blockchain can potentially provide 100% of funds to recipients of donations.
Advantages of Donating Via Blockchain
One of the reasons why donations with crypto assets are gaining popularity is because of the use of blockchain in them. Blockchain provides an immutable, secure, and publicly accessible database of transactions.
The transparency nature of the blockchain can be a solution for fundraising platforms in this technological era. The case of ACT whose license was revoked by the Ministry of Social Affairs is an example of a violation due to the non-disclosure of the donation distribution process.
One of the advantages of raising funds using blockchain technology is that everyone can track the course of the donation. Newly launched blockchain examples such as Givetrack and Alice can openly track donation funds being distributed to recipients.