The development of blockchain systems is still in its early stages, but it is advancing all the time. Through its technology, it ensures trust by giving transparency and data security. Transparency is a key element in people’s willingness to donate. But blockchain can not only provide transparency, it can also automate and simplify many processes and thus save a lot of time and money. We have to help people who do not have the same standards as we do and we have to make sure that the money goes where it is needed to improve charity solutions and increase donations.

Over and over again, charities and their staff come in for a lot of criticism. Do the donations we send out really get to where we are led to believe they will? Far too often, unfortunately, this is not the case, which prevents many people from donating at all. There is a lack of trust and transparency behind the organisations. If non-profit organisations could properly demonstrate the impact and reach of their efforts, more people might be willing to donate. This is a problem that blockchain could solve in the future. 

What makes a blockchain safe?

The blockchain is a space to register and securely store data, information or transactions. It works as a distributed ledger technology, which means that the blockchain and what the blockchain stores is managed by a vast network of computers. Every node in this network has the same version of the blockchain, with the result that any manipulation within the network is impossible to go undetected. The information in a public blockchain can be viewed not only within the network but also by anyone else. This makes blockchain a technology that can change many aspects of our world.

How is it supposed to work in charity?

To achieve their goals, NGOs and charities, no matter how large, need to collaborate with the government, the press, and other organizations. Blockchain can facilitate many things in this collaboration. So-called smart contacts, for example, can ensure that administrative staff are relieved by automating certain tasks. A blockchain can create a completely transparent donation chain where donors can track exactly where their money is when it arrives, and most importantly, where it goes. You can think of it as a kind of package tracking. Since the principle also works the other way around, meaning the donor can also be tracked, taxes and other forms of cross-country donations can be more easily complied with. By using a distributed ledger for data exchange, data duplication and other manipulations or inaccuracies between organizations can be reduced and data exchange can be secured. Often people do not want it to be possible to see how much or how little money they donate, thanks to digital wallets the anonymity of donors can be guaranteed. 

These are just a few of the many possibilities that blockchain technology can offer in the charity sector. It is a technology that facilitates our structures, saves us time and money, and gives us the confidence that we are reaching people in need with our donations. Some organisations have already integrated blockchain-based applications into their work. UNICEF, for example, is working on integrating blockchain technology, investing in blockchain startups and supporting programmatic applications in many areas.

Here you can find more information about UNICEF and their projects. If you’d like to donate transparently and securely after reading this post, here’s a little tip for you. The trading platform for cryptocurrencies BINANCE has a charity wallet where you can easily donate and see where your money ends up. Have fun donating!