Blockchain in the service of charity?

Blockchain can help the charity sector to increase transparency and empower different stakeholders, but beware frauds !

As the crisis continues to rage, donations are becoming scarce. Can blockchain help charities solve their problems?

BBB Wise Giving Alliance (Give.org), a charity database in the United States, conducted a survey of 2,000 people. Among the main points of the survey, 73% of participants say they are ready to donate in cryptocurrencies. Something that can be explained by the tax advantages associated with crypto transactions.

spring : YouTube

In the United States, the Internal Revenue Service (IRS) treats crypto as a stock or security, meaning donors can fully deduct the value of their crypto donations without paying capital gains tax.

Do Charities Need Blockchain?

The potential and utility of blockchain need no longer be demonstrated. Thanks to this practical and cheap technology, cross-border payments and crowdfunding are starting to be democratized in all corners of the world, including developing countries.

Similarly, non-governmental organizations (NGOs) are increasingly turning to blockchain to protect the identity and property rights of the most vulnerable categories, especially refugees who may not always have the means to protect their rights.

Today, it is possible to assign an identity to refugees on blockchains, where everything is verifiable and can be consulted at any time by United Nations charities.

Blockchain can also be an effective way to gain the trust of donors. Indeed, smart contracts can allow donors to track their donations from start to finish. Likewise, thanks to the verifiable, immutable and transparent nature of the blockchain, donors can also participate in charity governance.

How can blockchain help charities out of crisis?

IN a report published last year, Moralis showed how blockchain technology can empower the nonprofit sector.

spring : Moralis

According to the report, blockchain reduces costs and simplifies administrative procedures for charities. So instead of compiling, recording and managing data in their outdated CRM systems, associations can leave everything on the blockchain and focus on more important tasks.

In addition to the convenience of blockchain, this technology can help charities strengthen their ties with donors and gain transparency and credibility.

“Transparency for nonprofits is key to their long-term success. By using blockchain to build trust in the charity sector, more people will be likely to donate,” Moralis’ report states.

Indeed, blockchain will not only guarantee the accountability and transparency of non-profit organizations, but also make them more accessible to donors around the world. Also, gifts sent will reach those who need them faster. From a donor’s perspective, send funds from a crypto wallet it’s much easier than making a bank transfer.

In addition, transactions are confirmed in just a few minutes. On the other hand, a large donation through the banking system can take several days and be subject to regulatory checks.

Likewise, several crypto platforms have launched their own charities over the past few years. For example, The BNB chain offers a stable currency called the Pink Care Token (PCAT) which allows its holders to support causes close to their hearts. The sign was introduced as part of the campaign The poverty of the periodlaunched in partnership with 47 companies and organizations.

Beware of crypto scams

Blockchain offers countless opportunities for charity, but The problem of privacy and security of crypto transactions continues.

In July 2020, a 17-year-old hacked the Twitter accounts of several public figures, including Barack Obama, Elon Musk and Kanye West. The hacker impersonated these celebrities and promised to send BTC to anyone who sends funds to his crypto wallet. Thousands of people have fallen into the trap, losing tens of thousands of dollars.

To take advantage of blockchain, associations must arm themselves against fraud and crypto attacks. Thus, it is important for these organizations to recruit cryptocurrency and cybersecurity specialists.

Associations should also familiarize themselves with various crypto tools, namely wallets, DeFi protocolsanonymous donation platform etc.

Moral of the story: as you will have realized, blockchain is a double-edged sword. To benefit from it, it is important to know its risks and drawbacks.

Disclaimer

All information on our website is published in good faith and for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at his own risk.

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