How successful has Binance’s charity drive been?

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The crypto industry, plagued by scammers and thieves and frauds, has been embarking on a public relations campaign to clean up its image. Ripple has pledged over $100m to charity and “blockchain education” initiatives, and Coinbase managed to raise over $4 million through Even Binance, the biggest crypto exchange in the world, has been showing its philanthropic side by donating over $3 million to charitable causes.

Binance’s latest initiative, “Lunch for Children,” funnels donations to crypto wallets set up for school children, who redeem crypto for food. After donations roll in to Binance’s charity wallet, Binance distributes funds between Trust Wallets managed by a kid’s parent or legal guardian. At the beginning of the semester, parents and guardians visit the schools to authorize payments to food suppliers, so that, come lunchtime, the schools can feed the children nutritious foods.

The project is a partnership between Binance and Chinese non-profit Dream Building Service Association, which started feeding kids through the ‘Lunch for Children’ program back in 2017, distributing $150,000 in donations to schools in Africa. Binance claims that using blockchain wallets makes donations more secure, and, because all funds can be traced, it’s impossible to lose funds to corruption or theft.

Skeptics might well raise questions about the use of blockchain. The value of crypto-donations for Lunch for Children—currently around $237,000—-could wash away in a single market crash, and the technology sounds, at first glance, too complicated for the parents of Ugandan schoolchildren, many of whom are illiterate. And we are nothing if not skeptics.

So we took a look at the project, three months in, and spoke to as many people as we could find who worked at the schools. And we found out that, so far, it seems to be working.. pretty well!

A few teething problems

James Kimera Ssekiwanuka is the principal of Jolly Mercy Learning Centre, around 7 miles from Kampala. He says that though Lunch for Children, which his school enrolled in in February, has been “generally successful,” the pilot project had teething troubles. Because the wallets were technically owned by the children’s parents—kids aren’t eligible to open accounts—parents had to visit the school to authorize transactions at the beginning of semester.

Likewise, some parents had trouble travelling to the schools, so Ssekiwanuka worked around the problem by sending out buses to pick up parents from their homes. Binance is now considering implementing USSD technology, which would allow parents to access wallets on their phones to authorise transactions without the help of volunteers.

And, if bankers on Wall Street struggle to understand the point of crypto, then how are the teachers, children and parents at the Jolly Mercy Learning Centre supposed to work out how to use the technology?

“A good question,” chuckles Ssekiwanuka, who was was tasked with teaching his people the wonders—and woes—of crypto.  “Over 40 percent [of the kids’ parents] are illiterate, and the majority don’t speak good English,” he says. “But the technology is there to make life easy—whether someone is literate or not, you just press a button and you get the money.”

Binance Charity Foundation acknowledges the program isn’t perfect. “Our solution now is not the best solution, yet ,” CEO Helen Hai tells Decrypt . ”But we have the guts to roll up our sleeves and be on the ground working with them to keep improving it.”

A working blockchain lunch program

How does one convert crypto to food that feeds Ugandan schoolchildren? First, donate to Binance’s crypto wallet, in Bitcoin, Ethereum, Pax, or Binance’s very own Binance Coin.

From there, you’ve got to put a lot of trust in a system that’s run on a trustless blockchain.

The funds go into campaign wallets managed by the Binance Charity Foundation. You’ll have to trust Binance knows how to use the funds appropriately, and that they’re targeting the right schools. You’ll also have to trust Binance to open Trust Wallets for the parents and guardians of the school-kids (who you trust exist), then trust a Binance volunteer to watch over parents’ shoulders as they authorise transactions with local wholesalers (whom you’ve trusted Binance to have sourced correctly). Local wholesalers then feed the kids according to nutritious menus designed by Binance.

So why trust Binance—and where is the blockchain in all of this?

The idea is that crypto-donations promise to solve the charity sector’s “leaking-bucket” issue; when too many corrupt middle-men take their cut of the donations, little is left for the beneficiaries. With crypto, all  of Binance’s donations (minus a small amount of “gas” to pay for the transactions) end up feeding the kids. That’s because it’s near impossible to steal from Binance—parents, and everyone else in the chain, can only use the crypto wallets to pay the food suppliers. A Binance volunteer even gives every transaction a once over. (And yes, if Binance’s volunteer turns out to be a crook, any theft would be immediately traceable thanks to the almighty power of the immutable ledger.)

As it happens, Binance has  been feeding children, local officials agree. Since the January launch of its pilot program at the Jolly Mercy Learning Centre in Kampala, Uganda, Lunch for Children has expanded its program to feed 3,747 students and staff in 10 Ugandan schools, school officials say. Not only are the kids—who really do  seem to exist—-being fed, the head of one of the schools told Decrypt  that thanks to Binance’s program, school attendance rates are higher, and kids are getting better grades.

“The society and community leaders are so grateful,” Dan Ndifuna, headmaster of Vision Christian Junior Schools tells Decrypt . Previously, Ndifuna’s students could go over twelve hours without a meal, he said.

“Thank God for Binance,” adds Noah Kwagala, the director of the school. He said the students receive food like rice, potatoes, and beans from the ‘Lunch for Children’ program.

They’re not the only ones singing Binance’s praises: Kizza Zephania Seninde Kikoba, founder of Kide Nursery and Primary School, says that cryptocurrency donations are making a “really, really, big difference.” Beyond providing food, Binance is helping the school repair a broken kitchen. “The hygiene has really improved,” she says.

Binance has committed a year’s lunch for the kids, and the director of the charity foundation, Jill Ni, tells Decrypt  they’ll ensure kids get access to food, no matter the state of the market.

But Ssekiwanuka made sure to warn the schools that crypto carries its own risks—the value of donations, held in crypto, could wash away in a single market crash. He seems to have been successful: “The currency can change over time,” says Kikoba, of the Kide school. “We understood, and our supplier also understood.”

And Ndifuna, the Vision Christian Junior Schools director, admits that if a market crash caused the money to dry up, “most of the children will drop out of school and there will be massive absenteeism in schools.”

There have been other, tangential concerns. An article by BreakerMag  linked factories previously under Hai’s control to alleged human-rights abuses, raising questions over her fitness to lead a charity. But Hai said the claims—documented here, here, and here—probably weren’t true, before pivoting to the various awards she’s obtained.

Conquering the Bottom Billion

Under CEO Hai’s rule, the lunch program seems relatively successful thus far. And the partnership is growing stronger. In the next phase, BCF is considering providing tampons, teaching materials, and even plasma screens for the schools.

Hai wants to keep moving, fast. “When we have a tiger in front of us, we jump on top on the tiger, and ride it, and figure out how we are going to conquer the tiger while riding it,” says Hai on her initiative with Ugandan school-children. “My experience is to create a quick success with an example.”

Hai sees blockchain as a way to promote “economic transformation, job creation, and talent development” in Africa. And she dismisses the notion that BCF is a public-relations tool for Binance. “I don’t think Binance needs this to do their marketing for them. Binance is very well known already.” If anything, Hai seems to hold the power, using BCF as a way to prove blockchain’s worth as a tool of economic development.


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