Blockchain. Bitcoin. Cryptocurrency. They’re buzzwords that have been at the forefront of innovation and technology for several years now – which in the rapidmoving world of technology is almost an eternity! And yet, Blockchain still remains somewhat of a mystery to many of us, particularly in the charity sector where keeping up with the latest technology remains an ongoing challenge.
So, what is Blockchain?
Blockchain is a decentralised public ledger that records all the ownerships and transactions in a system. Through this system, all financial transactions are approved and validated by a network, rather than a single authority, creating a transparent, incorruptible, record of transactions.
Going international with blockchain and charitable cash transfers
In the charity sector, Blockchain has been relatively slow to take-off. However, some of the larger international organisations are beginning to make innovative use of this new technology to securely transfer muchneeded funding, to ensure the highest levels of protection on beneficiary data and to empower individuals across the globe.
Building Blocks
For example, a major initiative of the UN’s World Food Programme (WFP) is using blockchain to provide cash transfers to people in need. To date, it has supported 9.3 million people, empowering them to make their own purchasing decisions to relieve hunger. In 2018, WFP transferred a recordhigh of 1.76 billion dollars in purchasing power to people in 62 countries.
Through Building Blocks, WFP is trialling blockchain as a means of making cash transfers more efficient, transparent and secure, allowing the organisation to keep a record of every transaction, saving 98% of transaction fees and improving security, data-protection and privacy for users.
Also coming up the pipeline, WFP is exploring how blockchain could be next used to achieve the following:
- Support wider unrestricted cash distributions using mobile money
- Allow Syrian women who participate in the UN Women’s Cash for Work Programme to withdraw cash within the refugee camp or make purchases directly
- Enable immutable, verifiable supply chain tracing
- And develop fully secure digital identity management
Identity for Good
Similarly, the Red Cross is using blockchain as a tool for creating an international digital ID system in partnership with Evernym software to replace existing beneficiary ID cards used in their own cash distribution programme.
The project aims to allow recipients of the Red Cross to establish, create, hold and access their identities (and bring) dignity, choice and economic stimulus to the local markets where humanitarian aid is needed.
This will allow beneficiaries to own their own data without the need for individual passwords, accounts and troves of toxic data (to sit) on centralized, and often unsecure, servers.
At a time when data protection is a central concern, the importance of initiatives such as this cannot be underestimated.
A major initiative of the UN’s World Food Programme is using blockchain to provide cash transfers to people in need.
Homeless charity, St Mungo’s was one of the first charities to partner with Alice, working on a project to help lift 15 people out of long-term rough sleeping through intense personalised support.
Fundraising in the blockchain era
Blockchain also has exciting potential to transform the way we fundraise, improving security and transparency throughout the funding process.
The rise of Alice
Blockchain-powered fundraising platform, Alice, was developed with the explicit goal of bringing transparency to social funding and using smart contracts – advanced electronic contracts that contain a set of automated rules – to automatically give more to projects that achieve specific goals.
The platform also decentralises the evaluation, monitoring and reporting of impact, making the performance of each project publicly available. This aims to help potential donors and funders to identify and scale the most impactful projects whilst reducing the costs of due diligence and reporting.
Homeless charity St Mungo’s was one of the first charities to partner with Alice, working on a project to help lift 15 people out of long-term rough sleeping through intense personalised support. The platform was used to raise and release funding according to the achievement of specific goals and updated donors when individuals found and maintained a tenancy, when they received help with moving in and when they received support to address mental health or substance abuse issues.
Ultimately, this project struggled to raise the full campaign target of £50,000, possibly demonstrating a continued wariness of donors to fully engage with this new technology. However, in a statement, Rebecca Sycamore, executive director of development said that the charity is still open to the technology’s long-term prospects and use.
Where will Blockchain lead?
Undoubtedly, there is enormous potential for blockchain to revolutionise the charity sector – particularly in terms of fundraising. In the wake of significant calls for improvements to data protection and greater transparency about the way donated funds are raised and spent, the opportunities that blockchain presents are clear.
However, as with any major shift in the way a system operates, the integration of these new technologies will require careful scrutiny and open discussion to ensure that we can maximise the benefits for both donors and charities.
