Blockchain is a groundbreaking technology that will have a significant effect on the charity and philanthropy industries, helping to safely and transparently control and distribute funds. Businesses and governments already use blockchain technologies in wide-ranging use-cases, especially in the midst of the COVID-19 crisis
On 31 March 2020, the Bank Account Based Blockchain (BABB) and CryptoAM.io announced a joint fundraising campaign. The blockchain charity will support the elderly and some of the most vulnerable people who live in London’s Canary Wharf, Poplar and Isle of Dogs. BABB uses its native BAX tokens for this project and donations can easily be made on the platform without the donors being charged for the transaction.
David Taylor, Chief Marketing Officer of BABB, said he hopes that Canary Wharf should become a hub for all financial services worldwide and that BABB will be able to offer as much support as possible to vulnerable sections. So far the people have contributed more than £ 5000 ($6100) for the cause.
Blockchain and the philanthropy industry
Blockchain is among the 21st century’s most hyped innovations. Blockchain enthusiasts expect that the system will absolutely change the environment over the next few years. The main advantage of blockchain for philanthropy is that it allows greater transparency and accountability and can thus provide “evidence of impact” for the goals achieved.
Since any transaction made on the blockchain is recorded in near real-time and is open to everyone, blockchain will help to dramatically reduce the expense of annual reporting on the budget and expenditure of a charitable entity, thus can its overall transparency. Transactions made on the blockchain will hit recipients more easily and at a lower cost than if they are executed using other transaction methods since all transactions are immediately posted.
Some of the most appealing advantages blockchain have for philanthropists is that it allows easily transparent and traceable transactions, enabling donors to monitor all of their transactions from start to finish and check where their funds went. And also by tracking the entire transaction process, donors can easily find out if their funds have met their intended target.
Donors ‘opportunity to watch their contributions happen is a powerful way of building trust, but it also comes with disadvantages. “It can bring advantages in terms of increasing trust rates but it will also pose real challenges. The more confidence an organization has, the better its donations can be, the more transparency there will be because most donors usually want to see their contribution go ‘to the front line’ of a cause, and not be spent on supporting problems or office work, which is less attractive but just as essential to pay for.
Secondly, With increasing volumes of transactions flowing via blockchain frameworks, it will become harder to track where the money is going. Hence, this may be tempting to more perpetrators as a way to commit a crime. They can use blockchain for tax evasion or ransomware and illegal markets to sell everything, including drugs, counterfeit passports, and weapons, etc.
