Could Blockchain Help Prevent Corruption In Charities?
Often Cryptocurrencies are looked at as a path to wealthiness for keen investors. But could Blockchain, the fundamental technology of Cryptocurrency, help trace where and how charitable donations are utilized?
Estimations show that 14.9 million Australians (80.8% of the population) donated 12.5 billion to charities and not-for-profits organizations in 2015-16.
All-though Australia ranked 3rd in the 2016 World Giving Index Ratings, there is no national reporting standard that requires charities to reveal the revenue spending information. It is up to the charities themselves. With this lack of transparency where donations may end up can in some cases prevent people from donating at all.
What Is Blockchain?
In Simple terms, Blockchain allows two parties or peer to peer to do business with one-another without the need of a trusted third party.
Similar to emails, information can be sent from one address to another. The information, for example, could be a patients health records, a store of value, or a beneficiary’s ID. On the Blockchain an identical record of all messages is available to all participants, this is called a ‘Node’.
The amount of copies of this data on the Blockchain makes it incredibly difficult for an attacker to manipulate transactions or falsify records. With these records also being unchangeable it makes for a much more secure network than traditional centralised systems.
Are Organisations Using Blockchain?
These charitable organisations are already implementing the benefits of Blockchain,
World Food Program - Recently launched ‘Building Blocks’ using the Blockchain to support vulnerable families in Sindh Province, Pakistan with WFP food and cash assistance. The allocation of funding and entitlements were then matched with the records generated from the transaction.
Alice - Alice is a platform based on the Ethereum platform that allows users to donate to charities and track how their donation was used. Users can also choose to receive a refund if the charity fails to achieve it’s promised goals.
Start Network - Formed a partnership with social start-up Disberse a distribution platform for foreign aid to help create transparency where aid money is spent.
AID:Tech - An Irish start-up looked to team up with Australian foreign aid programs after successfully working with Ireland's Red Cross on a pilot program in Lebanon in 2015. The partnership helped provide electronic voucher cards with QR codes to Syrian refugee women to be redeemed for goods at camp shops allowing the Red Cross to successfully track the allocation of funding.
Blockchain brings many benefits to international aid f allowing them to lower transaction costs and efficiency, creating trust in partnerships, allowing transparency in allocation of funding and can even help vulnerable countries create bank accounts for their citizens.
The use of Blockchain technology for humanitarian efforts is a promising sign of it’s real world use and potential for future developments.