Over the last couple of years, blockchain technology has been constantly on the rise. No wonder - blockchain offers a secure way to authenticate transactions and prove ownership over digital assets without any intermediary, which is a game-changer in the growing number of industries. At first, it has drawn the attention of the wider public thanks to cryptocurrencies, including the most popular one - Bitcoin. Now, more and more eyes are turning to the blockchain and international organizations are among them. It shouldn't be surprising - blockchain answers the needs and challenges of modern NGOs that are obliged to be 100% transparent and to cut operational costs as much as possible. According to the UNCTAD Digital Economy report released on 4 September 2019, Blockchain is one of the top trends that shape the digital economy and therefore affect SDGs (Sustainable Development Goals) and in this context, it’s often called blockchain for good.
What does blockchain for good mean and why should non-profits care?
First of all, information on the blockchain is transparent by design - blockchain is a distributed and immutable ledger and data can’t be deleted or changed once it’s on the blockchain. It’s also impossible to be hacked or manipulated by anyone, neither an attacker or the organization itself. That’s why, when an NGO invests in blockchain-based technology, it makes its actions fully transparent towards its donors, volunteers, and supporters - both in terms of funding and voting in the General Assembly. In short, there are top 5 ways blockchain can reinvent the non-profit sector:
- Lowering operational costs
- Ensuring transparency
- Cryptocurrency donations
- Donor anonymity
- Voting.
Operational costs
Every mature NGO has operational costs - even with massive help from volunteers and supporters, it can’t fulfill its mission without being able to pay salaries, travel expenses (if necessary), buy hardware, rent an office and cover other relevant and necessary costs, such as marketing to spread the word about its mission and projects. At the same time, they’re obliged - by both donors and the general public - to cut these costs as much as possible. NGOs and charities are constantly audited for what percentage of the donations cover the project and what percentage is used for other costs. Rumors about spending too much by their staff, especially when the organization is big and well-known, are widely covered by the media. Blockchain can play a significant role in reducing these costs, for example by allowing cryptocurrency donations and therefore avoiding exchange and transfer fees or by reducing travel expenses by organizing highly secure online voting.
Cryptocurrency donations
Blockchain-based donations are a massive opportunity for non-profits. Fidelity Charitable, which is one of the biggest American charities, received almost $70 million in cryptocurrency in 2017, which is ten times more than in the previous year. There are several reasons behind it, including transparency, the ability to track a donation, simplicity of making a transaction and tax benefits. Cryptocurrency also makes it easier and cheaper to donate to international, cross-border charities - it’s estimated that UK charities are losing up to 50 million EUR each year on exchange and transfer fees. No wonder that the growing number of well-known organizations, such as Khan Academy, Freedom of Press Foundation, The Water Projects and more have been accepting cryptocurrency donations. On the other hand, charities and non-profits that don’t allow them are missing a significant revenue stream opportunity.
Transparency
Lack of transparency degrades trust in non-profits, charities, and other organizations. Donors need to be absolutely sure their donations are spent on the cause and reasonable operational costs and that charities are not involved in anything illegal. Blockchain can ensure transparency of all the operations because, as already mentioned, blockchain is transparent by design and data can’t be changed once it’s sealed there. Blockchain can be particularly useful for smaller charities and organizations, that haven’t had a reputable brand yet and a public blockchain-based ledger is a way to ensure their accountability. The ability to track the transaction form the donation to the charity until it reaches its recipient can prevent wasteful spending and help organizations to win and keep the trust of the wide public.
Donor anonymity
Some donors prefer to stay anonymous for various reasons. Some simply don’t want to boast about being philanthropists, others support causes that are frowned upon in intolerant countries. Luckily, blockchain-based payments give them this possibility. Although every transaction is transparent and can be tracked, digital wallets successfully mask the identity of owners giving them the freedom to support any charities they want to.
Voting
It’s hard to imagine operations in any NGO or charity without voting. It allows the board to make significant decisions about the present and the future of an organization, but also its members to have a say about current projects, policies, strategic decisions, electing representatives, etc. Usually, these decisions are passed through the official voting. It’s generally done by the poll or by a show of hands. In general, each stakeholder has one vote but it can be decided differently, also the weight of a vote can be different. Blockchain-based online voting makes the whole process faster, easier and more transparent. Moreover, there is no way that one vote can be cast twice or more.
With a domino.vote app it’s as simple as setting up a meeting in Doodle but also transparent and highly secure, offering governance to voters with full control. In short, in order to reach any kind of agreement by voting, an NGO can:
- Organize the poll with the team and decide on key agreement points.
- Engage with the community despite its location.
- Gather the votes through an easy to use mobile voting app.
- Offer immediate and transparent access to results.
- Unite its community with a uniquely designed trust technology.
Although there are many e-voting solutions available, the majority of them don’t offer what a blockchain-based app can offer: identity verification processes that level up existing identity validation models with several layers of authentication. In addition to blockchain data protection, voting from anywhere becomes as secure as physical voting, it allows for reducing the overall cost and much more.
Blockchain for good is not a buzzword, but it shows that this vital technology is able to disrupt entire industries, including non-profit. No wonder that charities and organizations are more and more eager to take advantage of online voting, cryptocurrency donations, transparency and other opportunities that blockchain gives them.