How Blockchain Is Changing Corporate Giving


The blockchain refers to a public ledger technology in which each cryptocurrency transaction is digitally signed to confirm its originality and to ensure that the information it contains is not corrupted. As such, the operations recorded on the blockchain and the ledger itself are considered to have the highest level of integrity.

In the early days of cryptocurrency, people thought that blockchain was entirely based on Bitcoin. Nowadays, it is increasingly clear that technology is not limited to bitcoin, or even digital currencies. But while the blockchain has the potential to revolutionize almost every sector, its impact is nowhere greater than in charitable giving.

For charities, blockchain offers a rare window of transparency and honesty, which could help make them more reliable for donors. Some of the problems that nonprofits face are the lack of accountability for how money is spent and transparency. Donors are sometimes reluctant to donate because they do not know where their funds are going or who they are helping with their donations. Over time, such concerns can cause them to become disillusioned.

It is therefore difficult for charities to attract or retain sponsors. However, blockchain quickly increases trust in the system by showing philanthropists where their money is going. The technology achieves this by making the system fully transparent and easily accessible information. Here's how blockchain improves transparency and trust in charities:

  • Funds go directly to the cause for which donors contribute. Thanks to blockchain technology, donations must no longer be transmitted by intermediaries. Instead, they go directly to recipients and businesses that can help them. This helps reduce the risk of fraud or financial leakage in the system and prevents funds from falling into the wrong pockets. The result is that donors feel more encouraged to give.

  • All transactions are traceable. Distributed ledgers can be used to track transactions. This improved traceability makes it easy to track how funds are spent. As a result, donors can see, even remotely, how their funds ended up helping people charitable foundations claim to help.

  • The Blockchain facilitates the distinction between well-intentioned organizations and fraudulent organizations. Given that donations made using cryptocurrencies can be found, it becomes easier for donors to identify organizations that advocate among those who seek only to enrich a few individuals. In this way, they get to know the charities with which to work.

Overall, blockchain and cryptocurrency will contribute to efficiency and give contributors the certainty that their donation is used for the cause they support.

Well-intentioned organizations need to embrace technology if they plan to improve transparency and track and transfer funds quickly. It is for all these reasons that platforms such as Sponsor seek to help businesses to provide more transparency and trust through blockchain technology.

Comments are closed.