Building blocks for more transparent aid delivery

Niall Dennehy is the Chief Operations Officer at AID:Tech, which uses tamper-proof blockchain technology running in the Microsoft Cloud to make sure aid reaches those who need it most. AID:Tech delivers digital entitlements such as aid, welfare, remittances and donations transparently and efficiently via digital identity based on blockchain technology.

If you’ve ever given money to a good cause, you might have wondered who exactly your donation is going to help. The sheer size of the international aid sector means it’s hard to say for sure. Aid distribution isn’t always transparent, and one outlaw can tarnish the credibility and reputation of the sector as a whole.

Back in 2009, my good friend Joseph Thompson discovered this problem first-hand. He completed the world’s toughest foot race, the Marathon des Sables, and in the process, raised a large amount of money for children affected by facial disfigurement. Yet when one donor asked where the money had gone, the charity that Joseph had donated to wasn’t able to say for sure. This got Joseph thinking about how to improve the traceability of aid. Around the same time, the two of us were talking about the potential of a new technology: blockchain. We put two and two together, and the idea for AID:Tech was born.

Blockchains are made up of a series of online transaction records (“blocks”). Each block is linked to the previous one and cannot be altered without affecting all subsequent blocks. The blockchain is shared amongst a distributed network of computers, meaning that transaction records are permanent, traceable, and can be reviewed by anyone granted access to the ledger. Joseph and I wanted to see if the technology could be used in a real-life international aid scenario, so in 2015 we launched our first pilot project in Tripoli, Lebanon, with support from the Irish Red Cross.

We created 500 plastic cards, each with a unique QR code, and handed these out to 500 Syrian refugees. The QR code corresponded to a record of digital identity stored on a blockchain. When someone handed their card to the shopkeeper in a participating store, he could scan the code, check whether the card-holder was indeed the intended beneficiary (thwarting any attempts at fraud), and see what they were entitled to, which in our case was a digital asset corresponding to USD $20. This meant the beneficiary was given goods to the value of $20. Most importantly, there was a clear record of this transaction having been completed available for anyone with permission to view – be they an aid organization, a program manager or even, an individual donor.

This was the first successful instance of international aid being delivered via blockchain technology anywhere in the world. We thought, “Fantastic! Now what else can we do with this technology?” That’s when we started thinking about legal identity and delivering other entitlements such as welfare, remittances and donations with greater efficiency and transparency.

Since then, AID:Tech has embarked on projects around the world, including a remittances project in Serbia with the United Nations Development Program, and the large-scale delivery of social welfare in Jordan. We’ve also developed a donations app which enables donors to see where their donations are being spent.

Around the world, there are approximately 2.4 billion who lack official identification. This means they are automatically excluded from services you and I take for granted because, legally, they simply don’t exist. Yet target 16.9 of the UN Sustainable Development Goals, now two years into their mandate, is to provide legal identity, including birth registration, for all by 2030. If you could give each of these individuals a digital identity associated with certain services – from social security payments, remittances sent from relatives abroad and donations – you would suddenly legitimize a whole swathe of previously unbanked, underserved and undocumented citizens. The recent launch of the World Identity Network, a global initiative working towards providing universal ID via distributed ledger technology, shows just how much this technology is needed.

In addition, it’s worth considering that more than $4.4 trillion is stolen each year because of fraud, corruption and a lack of transparency. Combining a digital identity with the digital delivery of entitlements can be an effective way of significantly reducing illicit behavior.

Ultimately, our technology aims to put individuals back in the driving seat, giving them agency over their own lives – whether that’s over their grocery choices or their socioeconomic opportunities. When we ran our pilot project in Lebanon, the feedback was that having a tangible card uniquely associated to each individual was incredibly empowering. The participants told us they felt included in a financial system; that they had been given back some level of control.

The beauty of digital assets transferred via the blockchain is that they can represent anything – cash, goods, social services. At the moment, we’re looking into how blockchain transaction data might be able to help aid organizations’ supply chain management, by allowing them to deliver aid supplies based on what’s actually being consumed by beneficiaries, rather than having to guess what’s needed.

In the same spirit, we also want to make our technology available to those who have far more knowledge than us about what’s needed on the ground. Ultimately, we want to create an open platform with APIs to enable anyone anywhere to create applications that work with our platform. Because when the public and private sectors work together to apply new technology to age-old problems, the world’s greatest challenges suddenly become the world’s greatest opportunities.

Niall Dennehy
COO and Co-Founder, AID:Tech

Niall Dennehy is the Chief Operations Officer at AID:Tech, which uses tamper-proof blockchain technology running in the Microsoft Cloud to make sure aid reaches those who need it most. AID:Tech delivers digital entitlements such as aid, welfare, remittances and donations transparently and efficiently via digital identity based on blockchain technology.