Blockchain’s way of improving donor trust and helping meet

Blockchain is one of the century’s most talked-about technologies, and for good reason. It didn’t just make data and money transfer easier, safer, and more accessible, raising barriers like territorial ones, but also improved social matter management. Crypto enthusiasts can check the value of every digital currency live, searching for everything from Bitcoin to Render token price prediction. This way, they can decide when and whether investments in their favorite or monitored crypto make sense or should be postponed, if not turned down. This communication and data transfer improvement has helped improve the routes for money-raising for fundraising and donation associations. Blockchain-based platforms can bring unprecedented accountability and transparency into charitable donation tracking, among other improvements.

If you’re a digital enthusiast who cares about the social concerns that can be improved little by little by everyone, this article might be for you. We’re breaking down the impact of blockchain’s “proof-of-impact,” aka “proof-of-donation,” on the philanthropic sector so that donors can make more informed decisions when they want to direct money to causes they care about.

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Lack of faith 

In light of increasing concerns about social fundraising, it’s crucial to get to the root of the problem and see why many kind-hearted individuals would donate but choose to resist this intention. A recent study published on the Fast Company website discloses that almost one in three Americans is reluctant that charity organizations can use resources well, be it for less-worthy purposes or collaborating with phony businesses. On a global scale, findings depict an even worrier image. More than six in ten people disbelieve that charity organizations can accomplish their goals. Outrageous or a slap in the face, there are internalized concerns that some charity organizations have different underlying purposes than the promises stated. With heightened levels of skepticism, it’s only natural for some to sleep on the idea of donating to some causes – or spending time reviewing the social groups behind those projects.

There are regular donors and high-profile donors, and obviously, these two groups’ motivations and offerings differ considerably. What if both categories found donating more transparent and thus worthwhile in meeting their goals? This is where blockchain enters the game to solve one of the century’s largest social concerns. How?

How blockchain solves the transparency problem

Coming to grips with the transparency and immutability of blockchain-logged transactions isn’t at all that “cryptic”. It’s as simple as it is for donors to understand how their donations go. The idea is that blockchain represents a distributed ledger of data about transactions that the system’s every user manages. Random participants work as “nodes” and check and ensure every transaction's eligibility on the blockchain. The public ledger then stores data about these transactions and verifies them. This prevents fraud as it guarantees 100% transparency of every conducted transaction, which is continuously tracked and checked. The ledger doesn’t permit data manipulation and alteration once the information gets in. 

This knowledge and broader adoption of the system can make it easier for stakeholders to come to grips with donation projects and their outcomes. It gets easier to grasp the value chain of records logged onto the ledger. Blockchain-centric fundraising approaches permit givers to trace their contributions until they get to the anticipated receiver. Transparent and robust solutions for tracking and gauging the impact, aka “proof-of-impact,” can aid in reducing useless spending, eradicating corruption, and improving donor confidence. 

Breathing a sigh of relief

Let’s put a thing in order. Nonprofit fundraising groups don’t need prior knowledge of blockchain or digital currency to take crypto donations. The truth is that many fundraising teams begin collecting information about crypto as they go and after they start their activity. Numerous non-governmental organizations see the golden opportunity presented by digital currency payments and are enthusiastic about meeting their goals more rapidly (and surely). On another note, many other charity groups see crypto contributions as a matter of “when” instead of “why” or “if”. 

Cryptocurrency donation schemes aren’t challenging to implement when state laws permit and encourage them. For this reason, more than 5 in 100 of the 100 biggest charities in the U.S. take crypto today. Over 1,300 nonprofit organizations worldwide embrace this solution to increase their reach. 

A clarifying case study for donation tracking 

Let’s skip from the theory to the real facts. How can blockchain really impact the social sector and charity organizations? 

A helpful starter would be looking into one of the largest examples regarding blockchain donations. LUXARITY, a reputed social venture distributing vintage, second-hand clothes to social causes, dipped its feet in the blockchain waters as early as 2018. The organization partnered up with Consensys Social Impact, a funded ConsenSys Circle working to bridge the gap between blockchain and donations. The service used would help the luxury clothing group log and trace contributions from their pop-up sales on the distributed ledger annually. The combo created a blockchain-powered application that improves the accountability and transparency of charitable donation tracking. There, buyers can choose the social cause they want their contributions to reach. The program has three goals within its Sustainable Development plan. One targets responsible consumption education, another supports recycling initiatives, and the last focuses on quality education. 

No more illicit acts 

Mismanagement, corruption, shadiness, and other concerns exist everywhere, so skepticism is at home when giving away money or other contributions without knowing you’ll be assured about their arrival at the intended recipient. Blockchain prevents illicit activities thanks to its way of stocking and verifying data on the ledger. This system makes data readily available to any participant, allowing them to track their funds’ route. Donors can know for sure their contributions reached the right destination. 

Last line

It's wise to stay grounded and avoid getting too swept away by the hype. Philanthropists and NGOs are exploring blockchain and its use cases, learning more about the enabled possibilities and the technology’s impact on the overall sector. Suppose you want to learn more about digital philanthropy through blockchain. In that case, the gathered knowledge may serve you well in the future, as more and more organizations – whether for private revenue or donations – come to grips with blockchain technology for better payment management and transparency.