In 2017, charitable donations hit their all-time high. Only in the US, there were $410 billion donated totally, which is as much as 2.1% of the American GDP. However, trust in charity declines, which results in the average donation decreasing. Let’s analyze how blockchain can bring trust back into the charity.
Fair Statistics
Donators would like not only to know how their donations will be utilized but also understand the general trends. They are interested in the number of philanthropists in the fund they donate to, the average donation made there, etc. It is important for them because in such a way they can associate themselves with the donating community, too.
Currently, charity funds can still gloss over the reality by stating imaginary numbers instead of real statistics. Blockchain will prevent this forever.
If all the parties in the charity process are registered on the same blockchain, it will be providing the fairest statistics ever. The append-only storage will protect data from being forged or deleted. Once a donation or a payment is made, the blockchain will record this information to share it later on demand. This way, data about the number of donators, their average donation, the amount of spare funding, and expenditures will be publicly available in real time.
Fair Tendering
Usually, charity funds cooperate with one or a few contractors that deliver goods or services promised by a fund to its donators. At the moment, even if a fund affirms its expenditures with receipts, there is no guarantee that the exact contractor is the best one among all that applied. What if the contractors bribed the fund to get in?
Blockchain can protect tender participants from the scam. On the one hand, with the help of smart contracts, it will automatically deny those contractors that don’t fulfill the requirements. On the other hand, with the help of its digital ledger, blockchain will incorruptibly choose the best option out of the bidders based on the predefined conditions.
Payments Triggering
Sometimes, charity foundations dupe not only their donators but their contractors, too. Companies and individuals cooperating with some charity funds can successfully execute the project but then wait for their payment for quite some time.
To reduce counterparty risks, blockchain can trigger payments with its smart contracts. They can check up the fund’s balance before signing the contract with a contractor. Once the project is accomplished, smart contracts can automatically transfer money from the fund’s account to the contractor’s.
Sharing of Results
If you have ever donated, you understand how important it is to see the results of your help. You’d like to know how your money changed particular people’s lives. And if you’re satisfied with the result, you’re ready to give more.
Blockchain can make this process transparent and easily trackable. Storing all the stakeholders’ details, the system can share data about every single purchase made using your donation. You can get to know the person whom this money helped and even what her current state is, and what else is needed. Being decentralized, this data can’t be forged, which makes it highly reliable.
How to Jump on the Bandwagon?
Currently, more and more blockchain-backed charity foundations are popping up on the market. Some of them, such as UNICEF, appeal to people to share their PC capacities to mine Ethereum for Syrian kids. Others, such as Blockchain Charity Foundation or Alice, focus on certain locations to address particular issues.
As it is impossible to create a single foundation solving all the problems around the world, a lot of niche solutions are required. So, you can become the one joining this trend. With the help of the genEOS blockchain ecosystem, you can quickly create the software that will become a full-fledged participant in the process of making charity more trustable.
Takeaways
The enormous domain of charity is suffering from decreasing trust. Sometimes, charity funds cheat their donators, sometimes their contractors. Blockchain can prevent both from happening. With the help of its inherent decentralization, digital ledgers, and smart contracts, it can make the charity process transparent and traceable for all of its stakeholders.