A charity called Targetedhelp.org is now accepting Bitcoin. The nonprofit forged by John Strong is working with BitPay to help the rural poor in the isolated mountains of the Sierra de Zongolica and the urban poor of nearby Orizaba. The charity’s goal is to use bitcoin donations to revolutionize charitable giving with their efforts and the world abroad. The organization has zero budget, zero overhead, and publish to needs directly. Donations go directly to Saldazo cards, which are held by recipients and funds don’t pass through the nonprofits hands. Many in the region use these cards and are located in the pockets of the most extreme poverty in the world.
“The short answer is that I hope Bitcoin will promote economic freedom in ways that political action never could — Bitcoin has a simplifying power that just might succeed in disrupting the cozy corporatist arrangement. But even more than in the U.S. I’m hopeful that the disruptive power of Bitcoin could improve the lives of people in poor countries.”
— John Strong, Targetedhelp.org
Bitcoin.com got together with John Strong to get some insight on what he’s doing in the Mexican mountain terrain. Strong wants the world to know some of the hardships faced in these rural areas, and that he thinks Bitcoin can help quite a bit.
Bitcoin.com: What got you interested in Bitcoin?
John Strong: My interest is both philosophical and personal.
Philosophical: The short answer is that I hope Bitcoin will promote economic freedom in ways that political action never could. Politics is not, as our grade school textbooks taught us, an engine of progress. It is a dead-end street. The U.S. political economy, for instance, is looking more and more like a completely unreformable mess of unimaginable complexity, favored by a constellation of small groups that benefit from the complexity. It is what Jonathan Rauch aptly called “Demosclerosis”, and probably represents a tendency of every political system, to revert, cerebis paribus, to the inertial muck of corporatism. But Bitcoin has a simplifying power that just might succeed in disrupting the cozy corporatist arrangement. But even more than in the U.S. I’m hopeful that the disruptive power of Bitcoin could improve the lives of people in poor countries. Peruvian economist Hernando de Soto has made clear to the world how decrepit overburdened legal systems contribute to poverty in the 3rd world. Dysfunctional legal systems prevent the poor from transacting legally, which means that not only is their labor often illegal (85% of all new employment in Latin America in the last 50 years was created in the informal economy), but much of what they own is just what de Soto called “dead capital”, because it cannot legally be put to use to build new micro businesses. Bitcoin is not a panacea, but I believe it could empower the world’s poor to do an end run around these dysfunctional legal systems that prevent them from transacting with one another to create wealth.
Personal: As a U.S. Expat for many years, I am scandalized by the transaction costs of doing simple money transfers across borders. We operate a small nearshore software development company and routinely have to deal with unfavorable exchange rates and fees of up to 4%. How would you like your bank to take 4% off the top of every paycheck?
BC: How did you connect with BitPay?
JC: We contacted BitGive hoping to partner with them in some way, but this led to a contact with BitPay and Elizabeth McCauley. Elizabeth worked hard to get us on board, even though, as a non-profit, we don’t pay for their services. We are very grateful.
BC: Can you explain how you envision Bitcoin helping your charity?
JC: It helps us avoid fees, but more importantly it helps us implement our most important goal of fostering direct giving. TargetedHelp will manage transfers, but perhaps with the exception of a few special cases, no money will pass through our hands.
This helps with the related goal of decoupling the information function of a charity from the financial management function. In the 21stcentury information age, there is no longer any reason to conflate these two activities. TargetedHelp has a publishing mission. I believe that in the future this will be true of most charities. The most important value added by any charity is information, and insofar as charities continue to need infrastructure, they will focus that infrastructure more and more specifically on the critical task of managing information. People get news about suffering caused by major disasters, but the suffering of poor individuals is mostly invisible to the world. More tightly honed publishing can remedy that.
“Young women are sometimes “sold” in marriage, not really because of a formal dowry system, but just because the parents are desperate to reduce the number of mouths they must feed.”
BC: Tell our readers a little about the problems people are dealing with in Mexico?
JS: I describe the region and its problems in some detail here:
Orizaba, where we live, has its share of severe urban poverty, and if you travel 30 minutes due South you enter a different world where Aztec-speaking mountain dwellers have lived in isolation for centuries. Since I first came here in the 1990s, the welfare of the mountain people has improved considerably thanks to the construction of roads. Villages that used to be a day’s hike or more from the nearest highway are now connected by a road to the city. Nevertheless, there are still pockets of “extreme poverty”, as classified by CONEVAL, including some communities where the diet is nothing but tortilla and salt. They cannot even afford frijol.
Young women are sometimes “sold” in marriage, not really because of a formal dowry system, but just because the parents are desperate to reduce the number of mouths they must feed. In one case I am aware of, a teenage girl was sold to her husband for a case of Coca Cola. Girls who give birth to defective children might be abandoned by their husbands. I published one such case here. Even when the family stays intact, parents rarely have the money to defray the costs of needed treatments for their children. I published a case of a child (Silvia) who is a good example of this. She is unnecessarily mute because she had not received needed hearing and speech therapies.
In addition, to address basic needs, we would like to invite donors to support the creation of micro businesses. I know a carpenter who could start a shop with just a few electric tools. I know a lady who sells tortillas using a simple “freight tricycle” (i.e. a tricycle with a compartment for storing her merchandise). If she could add a motor to the bike she could reach more towns in her workday. I know women who would like to start a sewing business, but lack funds for a sewing machine.
Last but not least, I would like to explore some creative ways that donors might help that don’t fit traditional paradigms. For instance, some families would reap an enormous benefit if someone were to offer to pay their property tax. Property tax is a pittance, probably not more that $15 USD per year, but families in the region are usually so poor that they are reluctant to pay even this. In fact, most never obtain legal title to their land and resist attempts to persuade them to do so for fear of having to pay property tax, but by not having title to their land, they miss out on many opportunities. For example, if they had title, they would be eligible to participate in governmental forestation programs that would significantly enhance the value of their property and benefit their communities, since it would help remedy the problem of soil erosion.
Obtaining title to their lands would also help them enter into the formal economy in other ways. Currently, land ownership is handled informally. They mark property boundaries with the izote tree. There’s a picture of this here. (Scroll to the bottom and you will see a line of izote trees marking a property boundary). With formal land titles, Sierra people could use the land they own to finance new businesses or better their lives in more significant ways.
“Help the poor of our region, but also awaken people to the superior potential of direct giving and the suitability of Bitcoin in this enterprise.”
BC: Can you tell me about the card system?
JS: The Saldazo card is a financial innovation intended to serve to the unbanked population of Mexico, by which I mean people who do not have a bank account. They represent a significant proportion of the population. It works like a debit card, but anyone can purchase one at an OXXO convenience store by simply showing their voter registration ID. Once you have one of these cards, you can share the card number with anyone wishing to send you money. They then deposit the money in the card either at a bank or a convenience store and the recipient can withdraw the money at an ATM or a convenience store.
I discovered a Bitcoin exchange in Mexico City that is willing to convert Bitcoin payments into national currency and deposit the money in a Saldazo card. It immediately occurred to me that this would be the most direct possible manner of transferring money from donor to recipient.
BC: Do you think crowdfunding can change the problems with poverty, maybe help flip the scales?
JS: Sure, absolutely. But we need something even more flexible. I want to create a system where people can give any amount towards any purpose without the fanfare and marketing required for a successful crowdfunding campaign.
Crowdfunding is marvelous, but it was early innovations in the revolution that is underway in our system of money transfers and payments. We need even more options.
BC: What improvements can be seen by you through these donations?
JS: We’re just getting started. I can tell stories about the benefits of networking to facilitate direct donations. This I learned from World Vision. They don’t always have a budget to address a need, but then they often do their best work by getting on the phone and finding someone who can help. I know of two cases where they obtain prostheses for a man who had lost a leg and could not work. We want to participate in this kind of research intended to connect donors directly with recipients.
BC: How many people work with your organization?
JS: We have no payroll and no overhead. My wife and I manage this in unofficial collaboration with the staff of World Vision, especially Lazaro Martinez, the leader of the World Vision project at Atlahuilco and a close personal friend for over 20 years.
BC: What’s the overall goal with this mission?
JS: Help the poor of our region, but also awaken people to the superior potential of direct giving and the suitability of Bitcoin in this enterprise.
With a partnership with BitPay and the revolutionary aspects of Bitcoin crowdfunding, Targetedhelp.org looks forward to helping more people in Mexico. John Strong and his wife are doing their best to eradicate unfortunate hardships one individual at a time. Bitcoin.com wishes them the best with their forward ongoing efforts.
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Images courtesy of Shutterstock, Pixbay, John Strong, and Redmemes