The charities using blockchain for fundraising
We explore how some forward-thinking charities are using blockchain and digital assets like cryptocurrency in their fundraising efforts.
Blockchain and cryptocurrency – they’ve been much-hyped tech buzzwords for at least a couple of years now, with IT analyst Gartner promising that they will be transformational in ‘most industries’ over the next decade.
But while the tech is a while a long way from becoming mainstream in the charity sector, there are certainly some fascinating possibilities for charities, philanthropy and civil society as a whole.
Blockchain is a new type of algorithm technology based on some highly ingenious mathematics. A blockchain is essentially a secure and trustworthy public digital record book of transactions. Data that is held in a blockchain is extremely secure as once data is in the ledger it cannot be manipulated or falsified, and all the transactions taking place in the blockchain are completely transparent and happen quickly and automatically.
These special characteristics of blockchain have led to the creation of digital cryptocurrencies built on the technology, such as Bitcoin or any of the 1,600+ cryptocurrencies that now get purchased and traded globally. Because they’re built on blockchain, they allow people to exchange money instantly and anonymously from anywhere in the world, without having to go through intermediaries like banks.
Forging a chain of trust
What’s this got to do with charities? While no one knows exactly where blockchain technology will go next, it’s not going away. The technology has far wider applications than cryptocurrency – as Charities Aid Foundation thought leader Rhodri Davies explains, we could soon see the use of blockchain to help transform how charities ensure trust with donors, regulators and investors through blockchain-based ‘smart contracts.’
Right now, the rise of blockchain-enabled donation platforms that manage, track and convert cryptocurrencies means that charities can receive donations into a virtual cryptocurrency wallet and exchange them for real-world money towards their cause.
Here are some of the forward-thinking charities using blockchain to fundraise today:
RNLI (Royal National Lifeboat Institution) became the first major UK charity to accept Bitcoin in 2014.
Here’s what Leesa Harwood, RNLI Deputy Director of Fundraising and Communications had to say:
“The RNLI has a history of innovation in fundraising, holding the first street collection in 1891. Bitcoin is an innovative new kind of currency and we believe that accepting Bitcoin will result in donations we may not otherwise receive, as well as connecting us with new types of supporters.”
In an example of how the historic can marry up with the futuristic, we reported last year how English Heritage became the latest charity to join blockchain fundraising platform Giftcoin.
London-based Giftcoin (and its platform, Promise) is one of a number of blockchain-based startups to have cropped up over the last couple of years.
Its primary aim is to help boost transparency and trust in charities by enabling donors to track where their money goes in the blockchain. Charities upload evidence of milestones achieved and are held to account, fostering deeper trust and a connection to the cause, says Promise.
Last year, World Wildlife Fund Italy (WWFI) became one of the largest non-governmental organisations (NGOs) to register with the AIDChain platform, giving supporters the option to donate in 23 different cryptocurrencies.
The AidCoin cryptocurrency, AidChain platform and their ecosystem of services were created specifically to help increase the transparency and traceability of charity donations.
Unicef announced last month that it would now be accepting cryptocurrency donations in Ether and Bitcoin, citing its ease, speed and efficiency.
The international nature of its operations and its donors also makes it easy for international donors to move large amounts of money anywhere with less friction.