A blockchain is a digital ledger of transactions that are distributed across a wide array of computer systems. For the average person right now, a blockchain is often associated with cryptocurrency or high-level finance.
In reality, blockchain is a tool for modern innovation and creativity across many industries. For example, the blockchain is helping private space exploration companies fundraise to increase the speed by which they can return to space.
And now….crypto-philanthropy is here.
Blockchain technology is helping non-profits and fundraising entities increase transparency and their impact on philanthropy.
Transactions recorded on blockchain networks are transparent and offer a permanent record for all parties to view and understand. This affords greater transparency to both donors and recipients of philanthropic donations.
The benefits of blockchain on transparency are many in that it helps reduce unnecessary costs, which might have come from superfluous transparency measures, and it helps donors know their money is going to whom it is intended. Corruption fades away and trust rushes in.
Blockchains also make it easier for both sides of a transaction to see the identity of the other, while financial transactions are the most robust way blockchain is currently in use.
Giving Compass, a philanthropy multiplier, helps donors make the best use of their money, They maintain that, “In these situations, careful consideration of participants’ privacy, identity, and agency is an absolute requirement. Finally, we should be wary of blockchain implementations where the incentives of the participants are different from the incentives of the maintainers.”
Smart contracts are often used in philanthropy, and they have rules, bylaws or requirements programmed into their system, which initiate donations or protections when certain conditions are met.
This type of automation has eliminated the possibility of human error and offered a streamlined process for donors and recipients.
Blockchain technology removes the middle-man from charitable systems because money can be transparently delivered from donor to recipient. Donors’ privacy is encrypted and unviewable to users, and middle-men (which were used in the past to process and record transactions) are eliminated, enabling the identity of donors to remain private if that is their wish.
Such tangential benefits are a huge boost to the philanthropy industry, but they are not quite as exciting as the chance to tokenize charitable donations.
Tokenization is when a digital asset is created for anything of value (it could be a car, a painting, cryptocurrency or even a charitable donation).
Pixelplex explains how it would work, saying, “Such digital assets could be used to sustain a fundraising system where the givers are rewarded for participating in charity events with tokens. The tokens grow in value as more donations are made by other supporters of the cause, and therefore create an effective engagement model.”
When philanthropy becomes enjoyable, heartwarming, fulfilling and impactful, more individuals are likely to join the fray. Tokenization might become an important vehicle to create a buzz around charitable causes and add a little fun for the kind souls looking to make an impact.
Companies are already innovating around blockchain. The Open Philanthropy Project is offering some exciting advancements for altruistic souls.
The days of international transactions slowly eroding the impact of donations as they are processed is over, and charities are opting for the transparency and efficiency of using blockchain.
The 20th-century humorist and writer Sam Levenson would indeed be proud of blockchains’ potential. He once wrote of a giving heart, “The tender loving care of human beings will never become obsolete. People even more than things have to be restored, renewed, revived, reclaimed and redeemed and redeemed and redeemed. As you grow older, you will discover that you have two hands: one for helping yourself, the other for helping others.”