Blockchain refers to a public book technology in which each cryptocurrency transaction is signed digitally to confirm its originality and ensure that the information in it is not tampered with. Thus, the operations recorded on the blockchain and the book itself are considered the highest level of integrity.
In the early days of cryptocurrency, people thought that blockchain was all about bitcoin. Today, it is quickly becoming clear that this technology is not just bitcoin, or digital currencies. But while blockchain can make a revolution in almost every field, nowhere will its impact be more pronounced than for charity.
For charities, the blockchain provides a rare window for transparency and honesty that can help make them more credible in the eyes of supporters. Some of the problems that nonprofits face are related to the lack of responsibility for how money is spent and transparency. Donors sometimes don’t want to give because they can’t be sure where their funds are going and who they’re helping. Over time, such problems can cause them frustration.
This makes it difficult for charities to attract sponsors or retain them. However, the blockchain is rapidly increasing confidence in the system, showing philanthropists where their money is going. Technology achieves this by making the system completely transparent and informative, easily accessible. Here’s how blockchain increases transparency and trust in charities:
Funds are channeled directly to the reason donors contribute. Thanks to blockchain technology, donations no longer have to go through intermediaries. Instead, they go directly to recipients and companies that can help them. This helps ensure that there is less room in the system for fraud and financial leaks, and that money does not end up in the wrong pockets. As a result, donors feel more encouraged to give.
All transactions are traceable. Distributed books can be used to track transactions. This improved traceability makes it easier to control how funds are spent. As a result, donors even see from afar how their funds help people who charitable foundations claim to help.
Blockchain makes it easier to tell well-meaning organizations other than scams. Because donations made using cryptocurrencies can be traced, donors find it easier to identify organizations that continue their business than those that seek to enrich just a few individuals. In this way, they learn the right charities to work with.
In general, blockchain and cryptocurrency will help ensure efficiency and give confidence that their donations are directed to the cause they support.
Well-meaning organizations should adopt this technology if they plan to improve transparency, as well as quickly track and transfer funds. For all these reasons, platforms like Sponsy are committed to helping businesses provide greater transparency and trust through blockchain technology.