How blockchain impacts charity?
Blockchain is not only a new opportunity for business, the development of the financial system, or the development of Web3. It is also a recipe for solving systemic problems by supporting charity. The characteristics of decentralized networks create a great channel to connect people who want to donate to charities and organizations. In this article, we'll talk about how blockchain affects this area and tell you about examples of decentralized charitable activities that are taking place.
Why is blockchain a suitable solution for charity?
Let's consider what benefits blockchain implementation can bring to charity. Among them are:
Improved transparency
People donating money want to be sure that their funds are going to a particular target. Charities face the challenge of earning the trust of philanthropists, who may be wary of giving money to an entity. With the transparency of blockchain, it is easy to track cryptocurrency flows and how the organization distributes the funds - to whom the money goes from the wallet address. By monitoring activities, an entity can build full confidence in its actions confirmed by transactions. It is also possible to directly program a smart contract to transfer funds to a given wallet after gathering a certain amount.
ICO of charitable organizations
With a modern form of fundraising, such as an ICO (Initial Coin Offering), it is possible to create charitable projects that will be similar in operation to commercial emerging projects. Releasing a token that provides access to certain utilities and selling it to investors is a great way to raise money for a worthy cause. In the Web3 era, a DAO (Decentralized Autonomous Organization), whose participants work together to create innovative projects, can be a helpful structure. DAOs of a charitable nature are sure to emerge with the development of Web3.
Faster transactions and no intermediaries
Traditional methods of transferring money require third parties for transactions that charge fees or operate with delays. Transferring funds directly between wallets is much faster because blockchain operates 24/7. Although there are transaction fees in blockchain as well, the use of some networks allows for minimizing them.
Examples of blockchain-based charity initiatives
The World Food Programme (WFP) has implemented Building Blocks, a blockchain through which funds are donated to households in Bangladesh and Jordan. Beneficiaries of the program are verified, but their data remains anonymous. They are allowed to withdraw funds to buy basic items. So far, $325 million has been transferred in 15 million transactions. Blockchain has saved about $2.5 million in transaction fees.
Schools in South Africa are using Amply, the app based on blockchain and smart contracts in its infrastructure, which is used to automatically check attendance at schools, which allows monitoring of students' attendance levels before the Department of Social Development. By using the app, teachers collectively save approx. 4,000 hours of work per month.
The non-profit organization Bit Give has been using bitcoin to carry out charitable initiatives since 2013. Funds can be transferred directly to Not Give or the projects they support through their Give Track platform. Successful projects include the Chandolo Primary School Water Project in Kenya, which raised 1.2 BTC in January 2018. It successfully built a rainwater harvesting tank.
Organizations that accept crypto payments
Popular organizations fighting systemic problems are increasingly accepting payments in cryptocurrencies. It is an excellent step in giving another channel to transfer funds for those who want to deposit money. The list of entities is expanding all the time. At this point, one can mention:
UNICEF - is an organization that protects the rights of children around the world. Accepts Bitcoin and Ethereum donations.
The Water Project - is a non-profit organization dedicated to providing clean water to the people of Africa. It accepts donations in Bitcoin, Ethereum, and Litecoin.
Save the Children - is an organization that supports the education, health, and safety of children in developing countries. Accepts donations in Bitcoin.
The Electronic Frontier Foundation (EFF) - is an organization dedicated to protecting digital rights and privacy on the Internet. Accepts donations in Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Monero, and Zcash.
The Pineapple Fund - is a charity founded by an anonymous donor who donated 5057 BTC to charity. Although the foundation has ceased operations, it is a notable example of an organization accepting cryptocurrency donations.
Wikimedia Foundation - is a non-profit organization that manages the Wikipedia project. Accepts Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Dai, and USD Coin donations.
Summary - is blockchain the future of charity?
Like other areas of financial activity, charity should boldly take advantage of technological developments to conduct its business as efficiently as possible. With the development of Web3 and the adoption of cryptocurrencies themselves, the role of blockchain in non-profit organizations will grow. Of course, this does not mean that other methods of fundraising, such as physical donations to cans, should be abandoned, but a new way to send and raise funds to fight systemic problems. There is much optimism that major organizations like UNICEF are accepting cryptocurrency payments. Leaders in the non-profit field are setting an example for other entities. Perhaps in a few years, cryptocurrencies will be the standard in accepting payments by charitable organizations.
