A growing number of non-profit organisations are discovering the blockchain technology because of its benefits: it guarantees fewer costs and risks of frauds and more transparency for fundraising activities or the protection of significant documents.
The blockchain is a Distributed Ledger Technology that allows, through a second-level network of computing nodes interconnected, to validate and relay transaction of different types.
It is used with cryptocurrencies as BitCoin, one of the many types of digital money, that is not linked to any central bank or government.
It works as in the graphic below:
This type of technology has been used by the World Food Programme (WFP) to support 10,000 Syria refugees, who have received crypto-currencies based vouchers to purchase food in agreed markets.
The blockchain technology has a good number of reasons to be considered as a useful opportunity for non-profit organisations.
First of all, every transaction made by a blockchain platform is entirely transparent and traceable: every donation made through crypto-currencies like BitCoin or other dedicated to non-profit sector (like AidCoin), can be controlled by the person who made it.
Platforms like GiveTrack allow donations in BitCoin for philanthropic projects, let results to be known for stakeholders, declaring what the no profit entities realize with the received donation: each virtual coin is a single piece and it is possible to control its allocation (it’s impossible to modify records on the blockchain)
Another relevant aspect is relied on to the single coin, that can be used for charity projects without any fees for banks or other institutions, instead of traditional ways of payment.
The anonymity of each donor will be assured: it would represent a problem for no profit organisations concerning the origin of the donation from legal or not legal activities.
The blockchain technology protects donors identify when they want to support specific causes or project: thanks to this technology the LGBT communities in Russia or Uganda have been supported, without any consequences for donors.
With the blockchain technology, a donor would be sure that every single coin of his/her donation would go to the project, with no fear of waste of resources. A charity, on the other hand, could use the 100% of the donation received.
The non-profit organisations that will participate in this new way of contribution, have to open a crypto-wallet, a simple address where crypto-payments can be accepted. Then, they have to direct donors to that wallet (held in their offices or in a cloud provider), with no risks of frauds or other troubles for each player of the game.