✨Platform 1: Benevolence through Sadaqah (Charity)

Charity and Volunteering Platform

In this section and later, we take a closer look at the individual platforms that cater to specific components of the Islamic economy. Now, we focus on the Benevolence platform that facilitates the sadaqah of money/assets and of time and efforts.

All major institutions of Islamic philanthropy – zakat, waqf, infaq and sadaqah – may be seen as variants of sadaqah or forms of donations. Zakat in cash and in kind may be seen as compulsory sadaqah, to be paid every year. Waqf involves endowment of real physical assets as well as financial assets with pre-defined beneficiaries of manfa (returns/benefits) from the asset. It is also known as sadaqah jariyyah (continuous) due to its feature of sustainability. Infaq may be defined as random micro-donations. Sadaqah as well as its continuous variant – waqf -- involves contribution of assets of value, physical as well as financial, which may be termed as sadaqah of assets (SA). Sadaqah can also involve contribution of human efforts that may be termed as sadaqah of efforts (SE). In conventional parlance, both are described loosely as donations and volunteering respectively.

The Prophet (peace be upon him) is reported to have said, “On every Muslim there is enjoined (a compulsory) sadaqah (alms).” They (the people) said, “If one has nothing?” He said, “He should work with his hands so that he may benefit himself and give in charity.” They said, “If he cannot work or does not work?” He said, “Then he should help the oppressed unhappy person (by word or action or both).” They said, “If he does not do it?” He said, “Then he should enjoin what is good (or say what is reasonable).” They said, “If he does not do that?” He said, “Then he should refrain from doing evil, for that will be considered for him as a Sadaqah (charity)” (Sahih al Bukhari, Vol. 8, Book 73, Hadith 51).

The vision behind the Benevolence platform is to mainstream and institutionalize charitable and benevolent action (Sadaqah) or contribution of assets (SA) and of efforts (SE) through objective measurement and conversion into exchangeable tokens of value. It builds an integrated framework for SA and SE. Thereby, it aims to make the allocation of scarce benevolence-driven resources more efficient. This is achieved by (i) providing reliable information on the quantity and quality of available and potential resources - human and financial - and (ii) facilitating a trade-off between them through the use of tokens.

How do we measure donor contribution through tokens?

Unlike present day sadaqah platforms, where donations involve unidirectional (single/recurring) flows, the Benevolence platform issues IBFS (IBF Esteem) tokens against any cash donations (SA). A cash donor making a contribution of SA under simple sadaqah or waqf (perpetual and temporary endowment) or a benevolent lender under qard (benevolent loan) contract is issued IBFS tokens (IBF Esteem) upon contributing cash to selected projects. IBFS tokens for SA contributors are NOT convertible to fiat money. For practical purposes, the IBFS token is like a badge of honour or a certificate of social recognition. Donors who accumulate IBFS tokens beyond a certain limit enjoy certain specific benefits and rights in the governance of the platform. Similar IBFS tokens are also issued to those who contribute to the IBF Waqf Pool.

What is the IBF Waqf Pool?

The IBF Waqf Pool plays an important role in the Benevolence platform, the remuneration in part/full of the volunteers for their contribution of time and efforts to a project. The volunteers are the intended beneficiaries of this Waqf.

We know that a volunteer contributes time and efforts (SE contributor) to a project. Volunteers are issued IBFS tokens upon contribution of measurable efforts to a given project. As an SE contributor, a volunteer is treated at par with any SA contributor and receives IBFS tokens that are not exchangeable or convertible to any form of fiat money. As volunteers accumulate IBFS tokens in their wallet and cross specific thresholds, they are allocated specially minted NFTs that are either convertible to fiat, or exchangeable at the NFT marketplace, or bring in non-financial privileges. Conversion of such tokens to fiat money is ensured by the IBF Waqf Pool at a rate determined by the system based on the size of the Pool and the number of tokens waiting to be converted to fiat money.

Thus, the Benevolence platform builds an integrated framework for SA and SE. It completes the framework for Sadaqah, the overarching institution of Islamic philanthropy and benevolence. Note that there is no exchange contract with “binding” features for any party in this framework. The financial incentive for the volunteers on the basis of the fiat equivalent of NFT tokens allocated to them is neither contractual, nor automatic. The promise of conversion is “non-binding” as well. The non-commercial and benevolent nature of all transfers on the platform is thus retained. Note that the NFT tokens may also be listed on the Affluence marketplace for price discovery and sale.

Now let us look into the flow of activities and processes as you seek to use the Benevolence platform. We will divide these into three categories based on your role as the project owner, donor and volunteer

Project Owner: Creating and Managing Projects

1. As a project owner you create a project specifying your needs in terms of funds (amount) or skill-set (hours).

2. If you are in need of funds, you need to select and specify one of the outcomes apriori – whether this would be a case of ‘all-or-nothing’ or ‘best efforts’ fund raising. In the former case, you would be able to accept funds only if the entire target amount is raised within the specified time frame. If the funds raised fall short of the targeted amount within the specified time frame, you would not be able to accept any funds. This specification sends a powerful signal to the donors regarding your confidence in a project and in the donor community. Funds falling short of the target, would flow into the IBF Waqf Pool. In the second case, you would be able to accept whatever is raised within the time frame.

3. If you are in need of skills, you need to specify the skills, the required number of volunteering hours and the per hour market-based compensation rate. The latter is required to put a monetary value on the skills/hours of volunteering provided by a volunteer.

4. You then proceed to add all relevant details relating to the project and the fund-raising campaign and upload any supporting documents or media files.

Donor: Making a Cash Donation

1. If you intend to donate, click on ‘donor’.

2. You will find all the donation campaigns and relevant project details, including the campaign for IBF Waqf Pool.

3. You can make a donation of IBFX-1 tokens to a project if the balance in your wallet is adequate. If not, you would be required to top up your wallet with IBFX-1 tokens, going back to the Wallet page.

4. Upon donation, you will receive an equal amount of IBFS tokens as a recognition of your contribution to a social cause.

Volunteer: Contributing Time & Skill

1. If you intend to volunteer, click on ‘volunteer’.

2. You need to register before you can start volunteering since a project owner needs to be sure of your potential to contribute to their project.

3. The registration process requires you to submit details and supporting documents (certificates/ testimonials) as evidence of your knowledge, skills and/or experience.

4. You can then choose from a list of available projects that are in need of volunteers and offer your services.

5. Your details would then be shared with the project owner for acceptance.

6. Once accepted, you can offer your services to the project for the specified time.

7. Upon completion, the project owner would evaluate your contribution based on a 5-point scale.

8. The system would then find the monetary value of your contribution that would be determined by the hours you have contributed multiplied by the remuneration rate as specified earlier by the project owner and by a factor reflecting the rating given to you.

9. The system would then allocate IBFS tokens to you in recognition of your contribution to the society.

The Benevolence platform can be seen to mimic the Islamic philanthropy sector focusing on sadaqah in its various forms. There remains the possibility of bringing in further developments to the platform, such as, designing and deploying smart contracts to invest private capital for development of the waqf or Islamic endowment sector. Security tokens with smart contracts can replicate and replace waqf securities. This is likely to be attempted in the next version of the platform.