What Give XLM is:

An app enabling users to make tax-deductible donations denominated in XLM directly to registered 501(c)3 organizations aligned with the UN 2030 Sustainable Development Goals.

What problems Give XLM solves, how it solves them and for which audience:

Paying taxes on cryptocurrency is complicated and expensive. When users withdraw funds, they are liable not only for exchange fees, but also capital gains taxes incurred by switching crypto into fiat currency. Making donations directly to nonprofits is a way of reducing tax obligations while also supporting important causes. This is also attractive for nonprofit organizations, because it opens a new revenue stream. Give XLM provides a simple, secure turnkey solution for nonprofits seeking to accept cryptocurrency donations.

How it works and how it uses Stellar:

Give XLM is functionally a clone of an app CFCE has already built on the XRP Ledger, named Give XRP, for which CFCE received two grants from XRPL Grants. The mechanism is simple:

1. Following due diligence by CFCE, registered nonprofits make a secure wallet hosted on GateHub exchange, which is hosted in our registry. The wallet then populates in the Give XLM app under the appropriate UN 2030 SDG category.
2. Users select the organization and choose the amount to donate, entering the required information (name and email address).
3. Users send the donation directly to the nonprofit’s GateHub wallet, which triggers two events: (i) an automated email receipt or “donation acknowledgement” containing the donation information (value, date/time, sending/receiving wallet) scraped from the blockchain transaction and (ii) an NFT containing the transaction ID is minted, available for the user to claim for a nominal fee (the cost of the transaction).
4. The user can then use the donation receipt to enter the donation into their taxes as a “non-currency donation” (similar to donating stocks or art) in order to deduct the donation from their taxes.
   

Integration with Stellar Ecosystem

We have fully developed our Give XRP xApp on the XRPL ecosystem, and with the implementation of XLS-20 into the protocol, our app automatically mints NFTs to represent donations to partner non-profit. This provides users with charitable tax deduction documentation, saving the donor on exchange and capital gains fees, and providing more revenue for nonprofits focused on regenerative finance and sustainable development.

We are requesting assistance to bring our project to the Stellar ecosystem, creating a Give XLM decentralized application, providing the same solution to Stellar XLM users. The collaborative ecosystem will allow donors to maximize their charitable giving impact, as well as coordinate with local and international nonprofits and sustainability projects.

We are applying for this grant from the Stellar Community Foundation for a number of reasons. First, the XLM ecosystem is vibrant, worldwide and growing quickly, and we feel that it has an exciting place in the dawning new economic system. Second, the Stellar blockchain fulfills all our tech needs: low transaction cost, near-instantaneous settlement, low carbon consumption, and NFT functionality. Finally, StellarX’s automated market maker system is extremely exciting to us, and we are excited to add additional functionality to Give XLM which isn’t currently available on the XRP Ledger- namely giving donors the opportunity to participate in liquidity pools connected to nonprofits, creating a sustainable passive income stream for charitable organizations.

The end goal is for these charitable donation NFTs to act as tax credits, similar to carbon credits, representing real-world commodities and assets. Additional future plans include utilizing staked funds into a yield generating passive income pool for users and nonprofits to mutually benefit, and to integrate future Central Bank Digital Currencies (CBDCs) as governments begin to implement them, bridging the gap between regular users and banks and the decentralized cryptocurrency ecosystem.

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Financial Model

Center for Collaborative Economics is building for sustained and steady growth in the expanding charitable giving sector of the cryptocurrency industry, and to be positioned to onboard regular users beyond the cryptocurrency ecosystem. We are intentionally building on blockchain ecosystems that are building towards regulated and legal usage, with future Central Bank Digital Currencies (CBDCs) in mind. The adoption of governments and banks to standardized, regulated, fully legal digital currencies will bridge the gap between the existing decentralized ecosystems and traditional finances.

The initial users of our ecosystem will provide new revenue streams for partner nonprofits. Donations in cryptocurrencies rose over 1000% year-over-year from 2020 to 2021, representing the fastest growing sector of charitable giving.

Because of the legal requirements, we are working closely with financial advisors and lawyers specializing in blockchain, cryptocurrency, nonprofits, and donations. Our initial partnerships will be with registered 501c3s in the United States, with the intention of expanding to community-led projects worldwide. Because one of the benefits of using our platform will be receiving tax-deduction information, we will carefully expand our users and partners to ensure legal compliance and correct information for donors and recipients.

We are taking both an idealistic and pragmatic approach to our funding model with regards to competition in the sector. Current platforms such as GoFundMe charge 3% on all donations, and cryptocurrency donation platform The Giving Block charges 5%. Additionally, cryptocurrency donations on ecosystems such as Bitcoin and Ethereum, even after the proof-of-stake update, are far slower and more expensive than efficient systems such as Stellar. CFCE will charge a 3% fee on all donations with a flat ceiling of $30 for high value donations.

Future Development

A planned development would be to take a portion of company revenue for a community-led donor fund. Staking NFTs minted from donations will provide access to governance decisions in the community. We will also continue to seek funding from entities focused on sustainable development, allowing us to onboard more users and nonprofits.

An additional feature we are developing is a shared stake in a yield pool utilizing the Automated Market Maker, with unique “paired NFTs” representing two sides of a donation into the yield pool. This will allow one NFT to be permanently affixed to a nonprofit, while the other NFT can be traded from the initial donor to another user. The NFT will represent funds in the yield pool, providing returns to both the donor and the nonprofit.