If you have ever run a nonprofit of any kind, you know how difficult it can sometimes be to convince donors to give regularly. Sometimes as a donor you feel that your donations are not used as well as you would like, or your interests shift. Other times you hesitate to donate because of other reasons like the brand aesthetic or the company’s communication response time. Some businesses simply have no clear ROI, or their expertise is not convincing. Other times you have too many options to invest in and so you only choose the one dearest to you. Either way, the decision to donate to an organization is a complicated one.
But what if there was a way to make things a little bit simpler and to get rid of some of the challenges that get in the way of donating to charity organizations? Recently, some charities have embraced technology and started accepting cryptocurrency donations. Generally speaking, the blockchain is a promising technology for those charities looking for a way to enhance transparency and at the same time reduce the chances of fraud. The truth of the matter is that the technology can benefit the voluntary sector a great deal, making it more efficient and productive in the process.
When I speak of the blockchain here, I mean the technology that allows the distribution of digital information without the ability to copy. The data is owned by one person, but the information is distributed transparently. Transactions are typically recorded with a hash (cryptographic signature) and each block is stored within a ledger. For charities, this means that if one block changes, that becomes very evident. Besides transparency, the blockchain could also decrease the cost of transactions, leading to an increase in investments or donations.
The idea is this; the blockchain helps charities to manage donations more efficiently and improves trust with donors because they can trace and track their transactions through the technology. As if that’s not enough, charities can also use the blockchain to run digital fundraising, accept secure payments and reach a more global audience without having to deal with currency exchange charges. No wonder some charities are now taking donations through cryptocurrency like Bitcoin.
One website that’s been accepting crypto donations recorded over 14 000 Bitcoin donated to charities like Unicef, Save the Children, Wild Tomorrow Fund and Global Heritage Fund. Of course, it helps matters that the currency responds to global events very fast. In a sense, accepting cryptocurrency is a way for organizations in the voluntary sector to keep an eye on the future.
There are other ways the blockchain benefits philanthropy. For example, people can make donations through assets like intellectual property, or charities can use self-governing smart contracts thanks to the blockchain. The whole industry stands to gain from having a crypto donation platform like overflow that simplifies contributions, improves donor experience and increases the average donation amounts significantly.