Bitcoin and hundreds of other blockchain-based cryptocurrencies are on the rise, allowing a new form of digital money that is not tied to a specific government. The technology that makes cryptocurrency possible is called blockchain, a decentralized general ledger controlled by all its users rather than a central bank.
While money based on large amounts of code may sound really complicated to understand, there are key aspects of blockchain that make it a very attractive technology for nonprofit organizations.
Geographically Agnostic
The distributed aspect of blockchain enables global organizations to be more efficient. For example, the UN World Food Program (WFP) was able to use blockchain to make cash-based transfers to organizations who are supporting Syrian refugees. According to Robert Opp, WFP’s director of innovation and change management, “blockchain technology allows us to step up the fight against hunger.
” Through this program, the UN can cut costs, control financial risks such as fraud and respond more quickly to emergencies.
Transparency
Traditional currencies are not easily tracked when they are exchanged. However, digital currencies are unique and are traceable throughout the ledger.
While there is a vibrant conversation within the nonprofit sector about the meaning of overhead and whether organizations should be measured by the percentage they spend on fundraising, one thing we know for sure is that donors prefer to fund projects directly.
Donors want to see where the money is going and how it is being used at any given time.
One new platform already taking advantage of blockchain is GiveTrack. GiveTrack takes donations for projects in Bitcoin and connects the financial information with the results of a project that are actively communicated by the nonprofit.
The side effect of this transparency could be an increase in trust that donors will have in organizations (which could increase giving). At the same time, it could create a lot of challenges for organizations when communicating with their donors about how funds are being spent.
The ledgers are not only used for financial transactions. Blockchain technology could also be used to track and protect valuable assets such as documents, art or jewelry throughout their lifetime journey.
Companies like Brilliant Earth leverage blockchain technology to better document the source of gemstones, ensuring they address the social and environmental issues related to mining and manufacturing precious stones....
Continue reading the 2nd page of this article on Forbes here: https://www.forbes.com/sites/forbestechcouncil/2018/04/25/blockchain-is-reestablishing-trust-in-nonp...
While money based on large amounts of code may sound really complicated to understand, there are key aspects of blockchain that make it a very attractive technology for nonprofit organizations.
Geographically Agnostic
The distributed aspect of blockchain enables global organizations to be more efficient. For example, the UN World Food Program (WFP) was able to use blockchain to make cash-based transfers to organizations who are supporting Syrian refugees. According to Robert Opp, WFP’s director of innovation and change management, “blockchain technology allows us to step up the fight against hunger.
” Through this program, the UN can cut costs, control financial risks such as fraud and respond more quickly to emergencies.
Transparency
Traditional currencies are not easily tracked when they are exchanged. However, digital currencies are unique and are traceable throughout the ledger.
While there is a vibrant conversation within the nonprofit sector about the meaning of overhead and whether organizations should be measured by the percentage they spend on fundraising, one thing we know for sure is that donors prefer to fund projects directly.
Donors want to see where the money is going and how it is being used at any given time.
One new platform already taking advantage of blockchain is GiveTrack. GiveTrack takes donations for projects in Bitcoin and connects the financial information with the results of a project that are actively communicated by the nonprofit.
The side effect of this transparency could be an increase in trust that donors will have in organizations (which could increase giving). At the same time, it could create a lot of challenges for organizations when communicating with their donors about how funds are being spent.
The ledgers are not only used for financial transactions. Blockchain technology could also be used to track and protect valuable assets such as documents, art or jewelry throughout their lifetime journey.
Companies like Brilliant Earth leverage blockchain technology to better document the source of gemstones, ensuring they address the social and environmental issues related to mining and manufacturing precious stones....
Continue reading the 2nd page of this article on Forbes here: https://www.forbes.com/sites/forbestechcouncil/2018/04/25/blockchain-is-reestablishing-trust-in-nonp...
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Francisco Gimeno - BC Analyst Blockchain is a technology already changing the non profits' sector, by providing transparency, trust, protection and traceability of funds, etc. New platforms are appearing which use Blockchain to raise funds which are exciting for donors already tied with big bloated organisations. This is a good development we would like to grow more and mature.