Blockchain refers to a public ledger technology in which each cryptocurrency transaction is digitally signed to authenticate and ensure that the information in it is not mixed. As such, operations recorded on the blockchain and the book itself are considered the highest level of integrity.
In the early days of cryptocurrency, people thought blockchain was bitcoin. Today, it is quickly becoming apparent that this is more of a technology than bitcoin or digital currencies. But while blockchain has the potential to revolutionize almost any industry, nowhere will its impact be more pronounced than for charity.
For charities, the blockchain is a rare window of transparency and fairness, which could help them become more reliable in the eyes of supporters. Some of the problems faced by nonprofits include a lack of accountability for spending money and transparency. Donors are sometimes reluctant to give because they cannot be sure where their funds are going or who they are helping with the donation. Over time, such worries can lead to frustration.
This makes it more difficult for charities to attract or retain sponsors. However, the blockchain is quickly raising confidence in the system by showing benefactors where their money is going. Technology achieves this by making the system completely transparent and easily accessible information. Here’s how blockchain improves transparency and trust for charity:
Funds go directly to the purpose to which donors contribute. Thanks to blockchain technology, donations no longer need to go through intermediaries. Instead, they go straight to the recipients and companies that are able to help them. This help ensures that there is less room in the system for fraud or financial leaks and that money does not go into the wrong pockets. The result is that donors feel more encouraged to give.
All transactions are traceable. Distributed books can be used to track transactions. Such improved traceability makes it easier to track spending. As a result, donors can even remotely see how their funds have ultimately helped the people the charities claim to help.
Blockchain makes it easy to distinguish benevolent organizations from dishonest ones. Because donations made to cryptocurrencies can be tracked, it is easier for donors to identify organizations that pursue their goal than those that want to enrich just a few individuals. In this way, they get to know the real charities for work.
Overall, blockchain and cryptocurrencies will help ensure efficiency and give users confidence that their donation is directed to the purpose they support.
Well-meaning organizations must embrace technology if they plan to improve transparency, as well as quickly track and transfer funds. For all these reasons, platforms like Sponsy strive to help companies provide greater transparency and trust through blockchain technology.