How Cryptocurrency Can Solve the Direct Funding Challenge
Despite our organisation’s commitment to shift power to young people and communities, an elephant in the localisation room still remains: how can we give young people access to independent financing.
Despite our organisation’s commitment to shift power to young people and communities, an elephant in the localisation room still remains: how can we give young people access to independent financing. Our experience supporting over 100 changemaker groups has shown us how successful they can be at designing effective community mobilisation campaigns. However the sustainability of these groups is heavily reliant on their access to independent financial resources.
When it comes to seeding funding these groups, our systems simply haven’t been built for them. Traditional grants require similar heavy paperwork and compliance standards used for large and established CSOs, NGOs and our suppliers. For a small, informal youth movements, that level of effort becomes a barrier and keeps young people from doing what they do best.
When Process Becomes the Barrier
In 2024, a feasibility study was conducted in Bhutan by Coala Pay, a tech start up who use blockchain technology to improve payment transfers to community groups. The study showed that unregistered youth groups partnering with Save the Children face a 75-point due diligence checklist (the same standard as large NGOs) for grants as little as $2,000 - $5,000 USD.
Through focus groups, the study revealed that there was a strong will to fund child and youth groups, but the process itself was enough of a barrier to avoid direct payment routes altogether. While the study found no policy blocking direct funding, the structural barrier was enough to stifle localisation ambitions.
Innovating Around Barriers
This challenge motivated SHIFT to rethink and explore whether new technology could solve these existing structural barriers, and be scalable, without compromising accountability, safeguarding and transparency.
This year, we piloted the use of Coala Pay’s blockchain-enabled platform to transfer a small amount of funding ($2,000 USD) to one of our graduate groups - the Shift Power Organisation (SPO) in Malawi. The pilot investigated the potential benefits (for SCI and young people themselves) of making direct payments to groups via stablecoins – a form of digital currency, pegged to the US dollar.
Here’s what happened:
$2,000 reached the youth group in minutes, not months.
Currency value was preserved against local devaluation i.e. an 80% gain compared to bank rates.
Transaction costs stayed under a dollar.
Funds were tied to two clear milestones, locked into smart contracts – digital agreements that are tamper-proof and transparent. The funds were released to SPO members who were trained to use a digital wallet when they completed the agreed-upon deliverables. This wasn’t just about speed. It was a transfer of power, giving young activists control over their own resources whilst maintaining financial accountability and transparency.
Sustainability Beyond the Donor DollarWhy Direct Funding Matters
When young leaders can access funding directly, trust becomes real. It means they no longer wait months for approvals or rely on intermediaries. It means their work isn’t slowed by systems designed for someone else. It also teaches young leaders how to manage their own funding. This is especially important for volunteer-based groups who spend relatively small amounts of money and require flexibility in how that money is used.
“THE PROCESS WAS REALLY EASY AND QUICK! BUT IT ALSO GAVE US AUTONOMY WHICH WE AS THE YOUTH NORMALLY DO NOT GET.”
– MEMBER, SHIFT POWER ORGANISATION
Technology as an Enabler
For years, blockchain and crypto were (and still are, although to a lesser degree) seen as risky. This pilot shows how technology can be harnessed to solve many of our existing structural challenges. The smart contracts help ensure that funds move only after deliverables; and stablecoins ensure that this happens without the wild price swings of other cryptocurrencies. In addition, the “proof of payment” built into the blockchain makes every transaction traceable and transparent.
The Bigger Picture
SHIFT’s ambition is to grow the pool of funding available to young changemakers and to attract new types of donors who believe in young people’s right to lead and who want every dollar to reach the community.
Blockchain and other digital tools can cut costs, speed up payments, and lighten the reporting burden on child and youth groups, while still managing the real risks of transparency and oversight. Imagine 20 groups across continents, receiving milestone-based microgrants in minutes, not months.
AFTER ALL, YOUNG PEOPLE SHOULD SPEND MORE TIME CHANGING THE WORLD THAN FILLING UP PAPERWORK.
This could be the future of direct funding and of youth-led leadership. We invite you to work together with us in making this future a reality: where funding flows directly, trust is the default, and young leaders have the resources to drive change on their own terms.
AGAINST ALL ODDS: How Ntcheu Shifters secured funding and continue to change lives
If you told me that an informal group of young people from a rural district of Malawi, with mostly secondary school qualifications, would go on to win funding within two years of campaigning, I’d say, “That’s not possible”. This can no longer be said ever since Ntcheu Shifters came onto the scene.
If you told me that an informal group of young people from a rural district of Malawi, with mostly secondary school qualifications, would go on to win funding within two years of campaigning, I’d say, “That’s not possible”. This can no longer be said ever since Ntcheu Shifters came onto the scene.
Ntcheu Shifters is a 15-member group (below 27 years) who were part of the Mgwirizano Youth Group. Mgwirizano first emerged in 2011 from Machira village, focusing on youth and child-led advocacy within their community. When Shift engaged with this already-existing group in 2022, they were clear in their vision: “End School Drop out” - a vision that responds to their lived realities and priorities about what issue is most important to them. Shift respects this important starting point; we let young people decide what matters to them and this becomes the soil in which their passions flourish.
During their first half year of campaigning to get children and youth back in school, Ntcheu shifters surprised local stakeholders and community (Head of Education, Ntcheu District).
“WHAT SHIFT HAS DONE WITHIN HALF A YEAR OF CAMPAIGNING IS SOMETHING WE HAVE NEVER BEEN ABLE TO DO AS A DEPARTMENT FOR YEARS.”
(Head of Education, Ntcheu District)
3,894 community members and stakeholders reached
117 out of 160 child dropouts have returned to school
9 child marriages dissolved
Despite being informal and unregistered, Ntcheu Shifters’ demonstrated effectiveness, passion and recognition from their community made them a formidable force. Hence, when Save the Children Italy were considering partners to help deliver their localisation goals, Ntcheu Shifters found themselves with an opportunity to continue their work beyond Shift’s project cycle. Leveraging their hard-won partnerships, including local NGOs, they drew on the existing intellectual and human resources to put together their proposal to get closer to their vision of ending school dropouts. Having won the proposal, Ntcheu Shifters will not only become registered and receive support to grow their capacities, but also continue their campaign into the third year to ensure every boy and girl in Ntcheu pursue their education further.
The past two years of campaigning on reducing school dropouts have impacted both the community as well as the participants themselves. While they were initially looking outward in their campaign, the process has inspired Shifters to look inward; many of them including the Chairperson and the Secretary of the group have now decided to pursue higher education.
Freza Mbalu (Chairman) is now Form 3 (lower secondary level) at Madzanje Community Day Secondary School
Esnart Thamangani (Secretary) is now Year 0 studying Community Development at Zomba Vocational Training college
Will Chitsulo & Blessings Charlie now writing Form 4 examination in July, 2024