Exploring Blockchain Use Cases in Charity Fundraising

Source

INTRODUCTION

Fundraising for charity international or local gives rise to certain problems which relate to issues of transparency, accountability or inefficiency and this makes donors question the fact if their ventures find their target population. With the help of blockchain technology, these issues are takens care of due to the transparency, security and traceability of financial transactions. Charities have now embraced the views of currencies by introducing resources to their organization that fosters the confidence of between the charity and its donors that the operations will not be diverted to other things and that less operational burdens would be realized.

Complete control and tracking of the funds is taken to another level through blockchain technology that tracks which donation is being used for what and how it is being used without the person having to depend on someone for explanations. With the introduction of such systems, most donors can trace transactions made, and if not a single dollar can be accounted for in specified endeavors no one need bother. This kind of transparency increases faith in people to contribute more and especially towards charities while improving the responsibility of charities in the allocation and usage of funds contributed towards them.

Also, the increased use of blockchain minimizes the possibility of the attraction of fraud which is detrimental in the process of raising funds for charity and encourages a more reliable means of raising funds. Furthermore, it also provides the opportunity to reduce the bureaucracy involved and facilitate the process of raising funds by charitable organizations. A new structure regarding what and how charitable donations are made and processed with the increasing number of the organizations joining the system will be seen.

• TRANSPARENCY AND ACCOUNTABILITY:

Blockchain’s feature of a public, immutable ledger means that charities can benefit from a new level of transparency. Donors are able to follow their donation every step of its journey and see exactly how it’s being used, thereby building trust between themselves and the charity. This also eliminates any worries around corruption or mishandling of funds, as every transaction is recorded on an unchangeable ledger.

Platforms such as Alice use blockchain to offer this kind of transparency and enable donors to track their impact in real-time. This overall makes for a better giving experience for the donor, increasing the chance that they will choose to donate again in future whilst also boosting the charity’s reputation more generally.

Furthermore, charities are transparent as they cannot hide or lie about where the money goes. That builds people's trust in the charity sector, making sure that donations go to people/causes they should go and improve overall charity efficiency.

• REDUCING ADMINISTRATIVE COSTS:

Blockchain massively cuts down the administrative expenses linked to traditional forms of fundraising for charities where in many cases a lot of the donation is lost in overhead costs since there are intermediaries, banks or just simply paperwork involved. Blockchain eliminates these inefficiencies completely by automating transactions and reducing manual labor thus making issuing donations cheaper.

Source

Using smart contracts, charities can automate certain processes related to handling donations – e.g. releasing funds once some predetermined criteria have been met. This means not having to go through third party persons and/or organizations nor having to employ an army of administrators in order to issue the donation which allows more of the donation itself reach its final rightful/needed destination.

Furthermore, blockchain reduces transaction costs, especially in global fundraising. This is a great advantage for donors donating cross-border as the traditional banking charges are really high. Lowering the cost will allow the charities to spend more on their causes and maximize their effect.

• TACKLING FRAUD IN CHARITY:

Fraud is a serious problem in the world of charities where funding can be misdirected or stolen altogether. By design, blockchain enforces a system in which all transactions can be viewed publicly, meaning that everything can and will be tracked. Fraud is almost impossible because it would mean disclosing your own identity and real-time accounting becomes a given.

Blockchain entities such as BitGive provide immutable funds tracking directly to the donors so they can trace their financial contribution in real-time and verify how their funds were allocated through intermediary organisations thus reducing fraud.

Furthermore, the security provided by blockchain eliminates the danger of cyberattacks and frauds which are often linked to old-fashioned charity models. Donors can thus be sure that their donations will not be tampered with at any stage.

• GLOBAL FUNDRAISING AND MICRODONATIONS:

Blockchain allows for global fundraising as donations can be made from anywhere in the world, without being held back by the constraints of traditional financial systems. Cryptocurrencies enable cross-border donations that are fast, low-cost and not subject to currency conversion or banking delays, making it easier for charities to raise funds on a worldwide scale.

Not to mention that blockchain also enables microdonations where donors can contribute small amounts without having to worry about transaction costs eating into their donation. This is especially useful for large-scale campaigns where every dollar counts.

Platforms like Binance Charity use blockchain technology to accept cryptocurrency donations from anywhere in the world, making it easier for donors and charities. That means even small amount can make a difference, promoting inclusive fundraising where everyone can be part of it irrespective of their wealth or location.

CONCLUSION

Source

Blockchain is transforming charity fundraising through increased transparency, reduced administrative costs, prevention of fraud and global participation.fostering trust between donors and organizations. By lowering overhead and enabling microdonations, blockchain opens the door for more inclusive and effective fundraising models. As the use of blockchain in charity expands, its impact on the sector will continue to grow, benefiting both donors and recipients.