How Blockchain is Changing Corporate Giving

Blockchain refers to a public ledger technology in which each cryptocurrency transaction is signed with a digital signature to confirm its authenticity and ensure that the information contained therein is not tampered with. As such, transactions recorded on the blockchain and the ledger itself are considered the highest level of integrity.

In the early days of cryptocurrency, people thought that the blockchain was all about Bitcoin. Today, it is quickly becoming apparent that technology is more than just Bitcoin or digital currencies. But while blockchain has the potential to revolutionize nearly every industry, nowhere will its impact be more pronounced than in charitable giving.

For charities, blockchain presents a rare window into transparency and honesty, which can help make them more trustworthy in the eyes of supporters. Some of the problems that nonprofits face are a lack of accountability for spending money and transparency. Donors are sometimes reluctant because they cannot be sure where their funds are going or who they are helping with their donation. Over time, such concerns can lead to their frustration.

This makes it difficult for charities to attract or retain sponsors. However, blockchain is rapidly increasing trust in the system by showing benefactors where their money is going. Technology achieves this by making the system fully transparent and informative, easily accessible. Here’s how blockchain increases transparency and trust in charities.

  • Funds go directly to the cause that donors support. Thanks to blockchain technology, donations no longer have to go through middlemen. Instead, they go directly to recipients and companies that can help them. This assistance ensures that there is less room for fraud or financial leakage in the system and that money does not end up in the wrong pockets. The result is that donors are encouraged to give more.

  • All transactions are traceable. Distributed ledgers can be used to track transactions. Such improved traceability makes it easier to monitor the expenditure of funds. As a result, donors can even remotely see how their funds end up helping the people the charities claim to help.

  • Blockchain makes it easier to distinguish between well-intentioned organizations and fraudulent ones. Since donations made through cryptocurrencies can be tracked, it becomes easier for donors to identify organizations that advance their cause from those that seek to enrich only a few individuals. This way they get to know the right charities to work with.

Overall, blockchain and cryptocurrency will help ensure efficiency and give supporters confidence that their donation is going to the cause they support.

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