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Blockchain technology set to disrupt charity sector

Fri, 07 Sep 2018, 09:11 am UTC

The United Nations General Assembly declared September 5th as the International Day of Charity in order to raise awareness and promote charitable efforts aimed at alleviating poverty worldwide.

Blockchain, the technology underpinning digital currencies such as bitcoin, can radically transform the charity sector by enhancing trust and transparency.

Distributed ledger technology, commonly known as blockchain, creates a distributed and immutable system of record among network participants, eliminating the need to trust any third party.

The charity sector faces a number of issues, the most prominent being the difficulty to track the funds. Blockchain technology, by providing a complete audit trail of the funds, can bring more transparency to the sector. This, in turn, can help make the system sounder by eliminating the possibilities of corruption and other irregularities.

Social Alpha Foundation is a not-for-profit grant making platform supporting blockchain technology for social good. Co-founder and Chairman Nydia Zhang believes that blockchain and crypto can positively impact the charity sector.

Worldwide, it is estimated that there are 10 million non-governmental organizations (NGOs), and with this large number, fragmentation does exist. A better consensus among various charities tackling the same issues will create more efficient infrastructures in order to eradicate poverty and achieve desired global changes,” Zhang said.

“Blockchain will also allow charities to track and trace what other organizations are doing, allowing them to tailor campaigns to complement each other, leading to a greater philanthropic impact which can be better evaluated.”


Zhang noted that a total of $410.02 billion was donated to charitable organizations in 2017. However, billions were lost due to inefficiencies and corruption, leading to a huge distrust of the sector.

“Blockchain can provide radical transparency in donation tracking by providing assurance to individual donors who can track their donations and understand where and how their money is being spent by the intended beneficiaries. It will also bring about accountability from those at all levels in charitable organizations,” Zhang added. “Blockchain and crypto will continue to have a revolutionary effect by presenting huge opportunities for how charities and beneficiaries interact. Charities, such as The Red Cross and Save the Children, have started to accept bitcoin donations, and it will be exciting to see whether others follow suit.”

BitGive is another nonprofit that seeks to improve philanthropic efforts with blockchain technology. It is the first Bitcoin 501(c)(3) nonprofit that seeks to bridge the gap between the technology and its practical applications for nonprofits and humanitarian work in the developing world.

Connie Gallippi, Founder and Executive Director of BitGive, said that blockchain technology offers a secure, fast, and less expensive way to transfer funds cross-border.

“Ultimately, this means relief aid and project implementation can be deployed faster and results can be reached sooner. In addition, with less fees and less funds being siphoned off along the way, more money goes towards driving impact,” Gallippi said.

She further listed a number of benefits of donations in crypto:

  • “Allows for raising funds globally without high transaction fees, transfer fees, and fluctuations of local currency rates between countries;
  • Allows for receiving money faster to those in need on the ground, reducing time spent held up in financial institutions (can be up to 60 days in developing countries);
  • Reduce corruption by enabling non-profits to control and see how money is spent throughout its organization;
  • Donors benefit from knowing that more of their donations will be used for those in need, and less on financial institution fees and administration costs;
  • Donations can be released more quickly and transparently to those in need.”

By facilitating the ability to trace transactions on a public ledger in real time, blockchain technology enables and donors to see how funds are spent and ensure they reach their intended destination, Gallippi added.

Until we, as a global society and human race, shift away from valuing money and power over all else, there will be corruption and the mistreatment of others. This results in an imbalance of power and resources, ultimately perpetuating poverty,” she said.

“For now, the best ways for us to make a difference are to help lift others up out of poverty through philanthropic efforts that meet the most critical human and environmental needs of our world and society today, and provide education and empower people with the tools and skills they need to improve their health, lives, and access to resources."


Giving Ledger is yet another startup working on blockchain-based philanthropy solution. Powered by KCHAIN, it offers an on-chain solution designed to optimize this sector, making charity and donation-related activities more transparent, sustainable, and worthwhile.

“Giving Ledger will make philanthropic endeavor more compelling and easier to join. Public trust will be restored and commitment to make a difference will be bolstered. Donors will be empowered as validators for projects they support, and will yield real impact for everyone to see. Philanthropic giving and transaction for the common good will become a sensible and attractive enterprise,” the team said in a statement.

[Update: Adds information on new philanthropic startup Giving Ledger]

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