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The Islamic approach to bring about comprehensive human development and well-being places equal importance on financial as well as human capital. It recognizes the role of philanthropy-driven action which may involve either donation of funds, or volunteering of human efforts and skills, or both. The generic term for such action is sadaqah which can be of assets (donation of funds) or of efforts (volunteering time and skills). While most platforms in the fintech space focus on either of the two, the Benevolence project of IBF Net uniquely integrates both forms of sadaqah in a single platform. Project owners may raise both financial as well as human resources at the Benevolence platform.
A review of the charity crowdfunds as well as of the volunteering platforms currently in operation reveals certain problem areas. Not many funding platforms make use of blockchain technology and remain opaque in terms of the utilization of funds. In the case of volunteering platforms the problem seems to be more severe. It appears that the contribution of volunteers (quality and/or quantity of human efforts) is neither objectively measured, nor adequately incentivized. This leads to some avoidable adverse outcomes. It makes the allocation of resources less efficient due to absence of reliable information on the quantity and quality of available resources in terms of human efforts. Project Benevolence makes a modest attempt at addressing these challenges.
The Benevolence platform aims to mainstream and institutionalize charitable and benevolent action (sadaqah) in the form of contribution of assets (SA) and of efforts (SE) through their objective measurement and conversion into exchangeable tokens of value. It uses Algorand protocol to build an integrated framework for SA and SE. The platform, while facilitating financial donations in the traditional sense, also measures volunteering time (quality as well as quantity) and converts the same to tokens that may be monetized at the option of the volunteer. It finds a way to facilitate remuneration of volunteering capital at variable rates and optimize the supply of such resources. The platform also finds a way to celebrate benevolent action in the form of cash donations through the issue of tokens.
Benevolence is the latest product to be introduced by IBF DigiLabs, the Singapore-based member of the IBF Net Group. It is an important component of the larger project of IBF Net Group to transform the Network into a miniature Islamic economy by developing smart contracts to cater to three major parts in line with the trifurcation of the Islamic economy into philanthropy, not-for-profit and for-profit sectors.
Benevolence as the philanthropy platform assumes added significance in the light of findings from studies by experts associated with IBF Net, which indicate a huge gap between potential mobilization of philanthropy-driven resources and their actual realization. Estimates place the global potential of zakat funds (compulsory annual levy on high networth Muslims) alone in the range of USD 550-600 billion. Actual zakat collected stands at just about 2-3% of the same indicating the huge untapped potential. The potential of other forms of Islamic charity-driven resources is equally impressive. The gap between the potential and realized resources is equally huge too. The Benevolence platform is therefore expected to make a significant contribution to efforts at mainstreaming the Islamic philanthropic sector at a global level.
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© Press Release 2021
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