Blockchain benefits create new business models for companies, new markets and new approaches to state regulation. But there are other areas needed to be updated. Charity is among them.
High grade of social responsibility, big amounts of money, complicated bookkeeping, work with medical documentation, researches – all that makes the work of charity organizations very difficult. And the Blockchain technology implementation will assist in handling of major issues.
Problem №1: “they steel!”
The words “charity fund” make the ones feel benevolent, but the others feel discomfort and ignore the rest of information. That does not depend on someone’s negative experience only but also on what people hear around them. In charity one case of misuse can damage the whole sphere. No wonder that survey results shows that charity is associated with tricky financial schemes.
«They steel!» – that is the opinion of young and elder people about charity, people who are ready to donate and who need help. But how this attitude can be changed? The Blockchain technology gives a chance.
The implementation of the distributed register in the workflow of charity organizations means, that anyone can see the whole history of donations and their distribution from any computer connected to the blockchain network. And the data in blockchain cannot be falsified or substituted.
You can write thousands of articles about charity, film hundreds of shows and organize thousands of actions but if there is a technology almost nullifying all corruption attempts, that’s the main trump in the hands of the fair charity organizations.
Problem №2: Costs
In the reality the following problem can pretend to be the main one. Besides the total mistrust charity organizations have to handle unfriendly logistic of donations. The intermediate banks charge for transactions. Everybody understands it and also the people who want to help someone but still doubt. They do understand that the banks charge 8 cents for every dollar donated. The blockchain allows to make transactions to any country with minimal commission or even without any. That technology does not require fixed rates.
Legal charity organization requires just like any other centralized system an infrastructure. Office, staff, banking services – all these are costs and it is not easy to explain those costs to people making donations. A switch to blockchain can sufficiently decrease these costs.
Who knows the subject already? (Spoiler: everyone!)
In Europe, USA, China blockchain is already applied to charity. Here are some examples.
Great Britain. The platform Start Network started to test blockchain. The technology is planned to be used for corruption fighting purposes.
UNO. The World Food Programme (WFP) used the platform Ethereum to provide Syrian refugees with humanitarian help.
USA. During the first half of 2017 the charity fund Fidelity Charitable raised about 9 million dollars with assistance of blockchain technology.
China. The company Ant Financial affiliated with Alibaba Group developed a private blockchain transferring donations.
Russia. A trade platform called «1+1» based on blockchain was launched in august 2017. Registered users can sell used and new goods and money from the deals goes to charity.
The idea of sales through ads is not a new one, but now everything is absolutely transparent, everyone can become seller or buyer. The results of survey made by the platform developers show that 80% of respondents are ready both to sell and buy on the platform. The project is already cooperating with 15 well-known charity funds and this is only a beginning, according to platform developers.
New working methods
Fighting the corruption in charity organizations, transparent and open story of donations, operational costs decrease – all that blockchain benefits are already being used and will not stay unnoticed. But the opportunities of that revolutionary technology go far beyond that. And the enthusiast already find new ways to apply the blockchain to the missions of charity organizations.
For most of the people blockchain is being associated with crypto secured payment units. Sometimes coins users cannot spend them in the region they live. But they can spend them for charity and receive the corresponding exemption from taxes and other privileges. Blockchain can attract this money to the third economy sector.
«Shaun’s Outpost», a charity fund from USA helping homeless receives Bitcoin donations already today. Thanks to the blockchain system it managed to raise huge amounts of money and to invest it in social projects, for instance building of a homeless shelter called “Satoshi Forest” called after the creator of blockchain Satoshi Nakamoto.
Smart contracts are computer protocols supported by blockchain technology. You do not need a third party to make such agreement. And it can be used by charity organizations in the countries where is a problem of finding a third party as a guarantor of obligations. The company can create smart contracts transferring a part of income higher than certain level to charity organizations.
A combination of two advanced technologies, blockchain and Internet of things reveals another way of updating a charity system. It might seem unrealistically but already now counters, toasters, washing machines and fridges might be connected to the internet. And the Blockchain technology is an instrument of inclusion of these devices in the charity program.
Blockchain can engage such an old-scaled system like subway into realization of charity programs. Let’s assume you have an unlimited monthly subway card and you don’t plan to use it for a one week when you will go on vacation. And if you participate in a charity blockchain network, the fund volunteers might use your card in that time in order to deliver food and medications to the old people supported by the fund.
Based on that principles the relationships with mobile operators can be built. If you don’t spend your money on the mobile phone account and it will just disappear at the end of the month, maybe it’s a good idea to transfer it to charity organizations making a lot of phone calls.
So the benefits of implementing blockchain to charity organizations are obvious.
- Transparency: the register is available to any user. Whenever system you are going to build, it will stay open.
- Cheap transactions: a distributed network is owned by its users maintaining it. The blockchain does not need any third parties and there are no other operating costs. That is the reason why transactions commission is not high.
- Trust: the blockchain excludes not only third parties but also the possibility of data falsification and substitution. The more proven cases the higher is the trust to charity organizations.
- New methods: huge opportunities of blockchain are not fully researched yet. That’s why the technology provides charity organizations with a space for creativity and opportunity of creating brand new methods.
So the Blockchain technology is coming not only to business and state regulation. The revolutionary transformation of charity is already taking place in the entire world.
These are not ordinary solutions, we all need to get used to them, both charity organizations and people ready to donate and to help those in need. But the features of this revolutionary technology help handle the major charity issues and make the whole process of donations much more easy, available and simply.