The problems we want to solve
Traditional methods of giving and fundraising are manual, not secure, non-collaborative and non-inclusive - leading to high costs, high wastage, poor insights, low trust and high abuse in collecting and distributing funds.
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Problems for Donors:
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Lack of security, potential for abuse:
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Donating through traditional methods like cash donations is risky. There is no guarantee that the funds will reach the intended recipient without theft, mismanagement, or fraudulent middlemen.
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Donating to online programmes may expose donors to risk of unknowingly participating in money laundering and terrorism funding. Due to a lack of transparency of the distribution of donated funds, many donors have fallen foul of the law, especially when giving cash donations to refugees or religious charities. Example: Cash donation to a Syrian refugee ends up being sent overseas to help other family members to enter the country illegally, or bring in potential terrorists seeking refuge.
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Low Transparency and Trust:
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Donors often do not have real-time tracking or clear updates on how their funds are used. This creates uncertainty regarding the impact of their donation. Example: A person donating to a disaster relief fund may not receive any proof of how the money was used or whether it reached the affected people.
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Lack of Personalization:
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Traditional giving does not allow donors to choose how to give, other than by giving cash and expecting the cash to be managed well by the collecting organization. There is no opportunity to give in a more impactful way, where the money is assured for only certain purposes, such as for food, school supplies and donations. Example: A donor might want to support education for girls but cannot personalize their donation to ensure that the money is used solely for that cause.
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Problems for Organizations (Charities, NGOs, etc.):
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Manual data entry and management, Low use of technology
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Fundraising efforts through traditional methods require significant human resources to manage donation records, distribute funds, and report back to stakeholders. This leads to inefficiencies and errors. Example: A charity organization might be overwhelmed by piles of paperwork and manual data entry, leading to mistakes in accounting or missed donations.
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Low use of technology leads to limitations in improving their work processes.
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High Costs:
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Organizing in-person events, printing materials, paying for transportation, and manual labor for collecting funds and managing them drives up costs. Example: A non-profit hosting a fundraising gala might spend a large portion of the donations on event management, leaving a smaller percentage for the actual cause.
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High Wastage/Mismatch in Donations:
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Due to inefficiencies in manual processes, physical storage of goods or funds leads to wastage. This happens because organizations cannot track or allocate resources properly. Example: A food donation drive for homeless shelters might see perishable food items spoiling before they can be distributed, or donations might go unused because of a lack of tracking.
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Inability to Scale:
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Traditional methods are difficult to scale because they depend heavily on in-person events, paperwork, and physical fund collections. Example: A small charity serving one community struggles to expand to other regions due to the logistical challenges of manual fundraising.
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Poor Insights and Reporting:
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There is limited ability to analyze donor behavior, trends, and overall impact. Without digital tools, reporting becomes cumbersome, and organizations cannot use data effectively to improve. Example: An NGO might not have clear insights into which fundraising campaigns perform best or which areas need more support, leading to inefficient future planning.
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Low Trust and Accountability:
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Without transparency in fund usage and distribution, both donors and beneficiaries may lose trust in the organization. Example: An organization might face accusations of corruption or fund mismanagement because there is no digital tracking of how the money was distributed.
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Lack of centralized beneficiary data
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Organizations are working in silo, even though they are helping the same categories of people (asnaf, urban poor, PWDs etc). Each organization can’t ascertain if a beneficiary has received assistance from other organizations or not.
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Some beneficiaries use fraudulent means to raise funds from several organizations, leading to unjust enrichment and waste of donor funds
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Some individuals are not being assisted at all, falling through the cracks, as they have not been identified or do not get due help from the organizations.
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Lack of accountability of vendors engaged
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Most organizations pay vendors upfront when activating donations-in-kind such as grocery baskets, food and fresh meals, or school uniforms assistance. There are many cases of vendors giving substandard quality, near expiry products, slow-moving SKUs to beneficiaries.
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In some cases, during distribution day, there are beneficiaries absent due to embarrassment and the excess items are wasted, thrown away, kept indefinitely, or brought home by those who were not meant to receive the donated goods. Organizations often do not know this as there is no way to track the distribution activities without manually being present and keeping records on the day of the event.
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Inefficient use of vendor vouchers
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Some organizations purchase vendor vouchers to distribute to beneficiaries. However there is a low redemption rate, and since the vouchers are paid in advance, it’s impossible to claw back the costs wasted from the vendor.
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The vouchers are not traceable to the beneficiaries and can be transferred or sold to others, leading to misuse of donation funds.
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Problems for Beneficiaries:
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Mismatched needs
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Beneficiaries rarely get to communicate their needs or participate in fund allocation decisions. Traditional giving methods make it difficult to match donations to needs without risking misuse of funds by beneficiaries.
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Example: Underserved individuals in a community often receive unwanted aid due to traditional one-size-fits-all giving methods, leading to a mismatch between donations and actual needs.
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Delayed support
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Manual processes delay the flow of funds or resources to the intended beneficiaries, often leading to missed opportunities or unmet urgent needs. Example: A family affected by a natural disaster might wait weeks to receive relief funds due to the slow, manual process of fund management and distribution.
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Non-Inclusive Distribution:
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Traditional methods may fail to reach marginalized or underserved groups who lack access to formal banking or legal systems. These beneficiaries are often excluded from traditional donation schemes. Example: Refugees or people without proper documentation might not receive necessary support as many traditional fundraising initiatives require paperwork or proof of identity, understandably to minimize flouting local financial regulations regarding KYC.
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Receiving less support due to high abuse and mismanagement of donations
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Without transparent, secure, and traceable systems, funds or resources meant for beneficiaries might be diverted, mismanaged, or siphoned off by corrupt intermediaries. Example: In some regions, relief funds for disaster victims might be misappropriated by corrupt officials before reaching those in need.
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Lack of dignity and unnecessary public exposure.
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When receiving aid in person, beneficiaries may have to stand in line or be publicly identified, which can lead to embarrassment or social stigma. This lack of privacy can strip individuals of their dignity, especially in close-knit communities where anonymity is valued.
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Invasive or non-inclusive documentation
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Beneficiaries are often required to provide personal information, such as identification or financial details, in a manner that can feel invasive or demeaning. This process, especially if handled insensitively, can make beneficiaries feel reduced to their circumstances rather than respected as individuals.
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Beneficiaries are often not aware about the personal details held on them and their dependents. It's a laborious process to find persons in charge to update
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Unbalanced Power Dynamics:
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In traditional charity setups, beneficiaries may be made to feel like passive recipients rather than empowered participants in the process. This dynamic can diminish their self-worth, as they are not engaged in making decisions about the aid they receive.
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Stereotyping and Stigmatization:
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When donations are publicly distributed, beneficiaries may be labeled as "needy" or "helpless," reinforcing negative stereotypes. This public identification can undermine their dignity, as it associates their identity with their financial hardship.
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Security risks
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Some beneficiaries from refugee communities are open to risks of being hunted down by their home country’s government and military as part of religious or political persecution. Protecting their identity from the public is crucial and life-saving.
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These traditional methods create barriers that lead to inefficiencies, lack of trust, and exclusion. Modern digital solutions, like GoBarakah’s platform, aim to address these problems by creating a more secure, collaborative, and inclusive system for giving and receiving aid.
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GoBarakah solves all these problems by utilizing its robust social assistance e-vouchers as a single foundational 'currency' to handle all forms of assistance funds and donations - by connecting donors, organizations, vendors and ultimate beneficiaries in each and every traceable transaction.