The concept is clear - to introduce transparency to social funding through blockchain technology, however this does fundamentally challenge the role that charities play as service providers.
“The development of Blockchain could fundamentally reshape the nature of charity, and even do away with the charity sector altogether”, so said Rhodri Davies from the Charities Aid Foundation who has been a guest speaker at our annual Together We’re Better Conference.
He goes further to state that enabling donations on the blockchain will have a “radical impact” as donations would be 100% transparent. A donor would be “able to follow their gift all the way through a charity to the beneficiary, and beyond”. He suggests that the biggest impact of the technology will come from the way it “enables a wider trend of decentralisation and disintermediation”.
This leads to the fact we “may no longer need the infrastructure provided by intermediary organisations to coordinate decision making, logistics and so on”.
This line of thought is gaining momentum with the wider public as blockchain makes its way into our everyday lives. Decentralisation is ultimately what the technology advocates.
I personally think that Blockchain represents a great opportunity for not-for-profits, reducing overhead costs, transparency on donations and traceability. These are all things that charities should seek to achieve so that they can focus on social leadership and apply their efforts on making a real difference.
So what does this mean in reality? Should charities jump on the blockchain bandwagon and phase out the current model?
As with any new technology I suggest adoption should be a considered process thats fits within the longer strategic objectives of an organisation. Now is certainly the time to start acknowledging what this technology could do for your organisation and leverage potential opportunities.
There are multiple donation platforms currently available on the market that are aimed to transform the sector.
Let’s have a quick look at few of them.
AidCoin ambitions to set itself apart by becoming the standard giving token benefiting the community of donors, charities, fundraising platforms and corporate donation programs. It will help charities raise more, more frequently, with less hassle and at reduced costs , at the same time ensuring the highest efficiency and scrutiny. Adcoin which is Ethereum based benefits from the access to Adchain, which is a platform that provides an ecosystem of services through an easy-to-use interface, connecting the nonprofit community while allowing full transparency and traceability of donations.
Alice is a social funding and impact management platform developed on the Ethereum blockchain. They seek to incentivise social organisations (charities, NGOs, social enterprises) to run projects transparently, by making sure that they get paid more when they achieve their goals.
The project performance is publicly available, making it easier for funders to identify and help scale social projects that actually meet their objects.
Shared data helps reduce due diligence and costs, and helps social organisations optimise collaboration,
One potentially challenging area here is the definition of when a goal is “met” sufficiently for the donation to be validated in the blockchain. Certainly could become a contentious area if the goals are more abstract or dependent on multiple factors.
Grace is a small startup organization which introduces a smart contract based incentive mechanism on the blockchain to improve charity fundraising campaigns as well as the way donations are made. This allows organizations to delegate promotional work to incentivized network users, which are known as Advocates, reducing upfront marketing costs. This enables promotional efforts to leverage the power of social marketing, to easily scale.
The UN has started piloting Blockchain technology with a few coalitions and pilot programs, most notably with the un-blockchain.org effort. With this mainstream support gathering momentum in the sector it’s important to stay ahead of the curve.
Unicef and BETC
They have taken an ingenious approach to raise funds on the Ethereum network with the Game Changers initiative. BETC have created a fundraising platform that leverages the e-sports community and it’s 711 million gamers around the world. By leveraging hardware that’s already in place to power the games all the users need to do is install a mining software to automatically mine Ethereum that is directly transferred to UNICEF.
Here at Edo, we’ve been asking a lot of questions ourselves, we’ve held roundtable events, where Blockchain has been a burning topic as a lot of organisations we work with are seeking guidance regarding the technology’s practical applications.
We firmly believe that Blockchain will be a key element to business transformation as we seek to empower our clients to be future fit, helping them to stay relevant in a landscape of changing customers, supporters and technology.
If you feel that your organisation would benefit from a conversation about Blockchain, please drop us a line.