Last updated on December 12, 2019
The blockchain has been transforming the face and pace of money systems and it can do so much more. As a developing technology, it has the power to pull of social initiatives such as in corporate giving or donations bei unserem Test.
Charities today are facing a decline because people are growing skeptic about where their donations really go. There are trust issues creating problems in businesses. Fundraising practices are being mismanaged and huge amount of funds are getting into the wrong pockets.
The emergence of the blockchain technology helped create a more trustworthy image for charities. The actual blueprint of a blockchain helps enable trustworthiness and transparency in charity giving. This is one important edge of blockchain technology from the traditional route of corporate giving that is tainted with corruption and scams.
Builds Trust between Donors and Organizations
Charity giving is more legitimate now than ever with the integration of blockchain technology. Around 25% of fund just vanished in thin air due to corruptive practices especially at the government level. The misallocation and waste of funds is disastrous and frustrating because it should have been used for the good of the majority.
With blockchain integration, corporate giving is now tamper-proof because each transaction is independently verified by different people or organizations or otherwise known as a consensus. The entries are also irreversible and immutable which mean’s it is permanent and can’t be modified.
You can only make changes or create updates with an addendum. The entries are also in a public ledger so it’s viewable by everyone who provides complete transparency as to where the donations go and how it is used. This builds trust and rapport as well as eliminates chances of fraud.
Builds Accountability and Transparency
There has been doubt in the current traditional systems in charity giving. Blockchains are changing that and making a difference. With blockchain technology, donors are confident that they will see more transparency and accountability in transactuons.
In this way, they would be able to trace the funds and have peace of mind that their donations really go where it’s intended to be. Alibaba has actually developed an innovative blockchain-based charity or corporate giving system, Charities on the Chain. The donations are all recorded and all parties such as the donors, auditors, and even the media can see or track how donations are used.
Reduce Overhead Costs
More often than not, administrative costs are much higher than the actual donation. The expenses would usually go third party intermediaries and legal processes. This would cost not just money but also a lot of time. With smart contracts, negotiations and executions of contracts are verified right away which speeds up the processing and delivery of donations.
People who are unbanked or underbanked can now take advantage of how easy and fast it is to transfer funds with a blockchain-based system. This fosters not just economic growth but financial equality as well.
The blockchain system has provided many businesses and individuals a new way to give donations for good causes. Social funding is very promising and has so much potential especially with the inception of blockchain technology. Global organizations are now embaracing this new technology to be able to create a social impact and make a new name to charitable giving in their business operations.