How the most important invention of the last few hundred years affects giving
Philantropy as a segment of human activity has changed over the last few years but not necessarily on those ends that one would expect. It has become incredibly easy for philantropic organizations to reach people and also very easy to achieve microdonations by tying in giving pledges with the shopping process, not just online but also in brick-and-mortar stores.
Yet one of the most important innovations of the last 500 years is not being used to advance the most important aspect that can let philanthropic non-profits build trust: full transparency. Even with a digitalised global economic system, digital money transfers and technology trends like IoT enabling positive change throughout the world: there are no means to actually track the use of any funds that go to charitable organisations if those organisations aren’t next door and easy to inspect.
Given the current situation in our world regarding challenges that arise from both global warming and global waste affecting our food chains, what is needed is a coordinated pursuit of global solutions to these pressing problems of the one shared and irreplaceable resource: a planet that enables life.
Given last year’s scandals around OxFam and their abuse of charitable funds for their own private and questionable pleasures in disaster-struck Haiti have led to an uproar but to little actionable new decisions that would prevent or uncover misuse of philanthropic funds in other organisations.
Impact investors and larger NGOs are now looking to deploy an innovation that already has changed the way our society interacts: triple-entry accounting.
The predecessor to this was double-entry accounting, first codified in the 1400’s by a Franciscan friar. It swiftly became the standard with Venetian merchants. All thanks to the preserving power of print. This opened up world trade by eliminating losses due to single-sided booking errors, preventing mistrust and enabling a much faster and frictionless way to trade. The flow of goods to all the domains of the old world picked up accordingly.
Fast forward to today and we still use a double-entry system. If you do your taxes in TurboTax or keep your books in Quickbooks you’re using double-entry.
Triple-entry accounting, as made possible by the evolution of Blockchains, means that transactions between any two parties can easily be made transparent, publicly, at marginal cost and no operational overhead. This changes the game in so far that collusion of people in little-observed industries is made virtually impossible.
It is only now being understood how applying this principle to charity can change how charity will look like in the future.
Leapfrogging effect: will all be everything digital in 5 years?
A key factor in enabling the widespread change in the charity industry is the fact that developing countries have experienced the leapfrogging effect: instead of follwing in the footsteps of developed nations they leapt over certain steps in the technological tree to advance much faster in mobile internet deployment, leading to a very fast digitalisation of life and services even in 3rd world countries.
What this means is that the infrastructure needed to deploy Blockchain-enabled charities (pervasive connectivity) is already present in those countries where the impact for positive change on a global scale is highest. Knowing this it is of paramount importance to use this technology to enable full transparency for those who are already funding projects that can save the world and thus build trust through continuous transparency.
A sketch for better charity
The rabbit hole is very deep. Blockchain-enabled organisations can achieve scalability in ways we do not yet fully understand. That is why I think it is important to start with a small but clearly defined problem and an easy to understand value proposition for fully transparent operations.
A foundation that receives funds for charitable use is already regulated but not truly publicly overseen, not on a day-to-day basis. Thus my radical (from radicalis [lat.] — pertaining to a root) proposal: digitalising the whole vertical https://email@example.com/how-the-most-important-invention-of-the-last-few-hundred-years-affects-giving-bfe421382a38?sk=98b2c036536b827f6e18718906e09a7dof charitable organisations, from the moment of fund acquisition to the deployment of funds in a project-bound way. Imagine that any sum donated at any point in time can be tracked to the exact point where it has been used, digitally, allwoing to measure the whole impact of it, economically, as well es having complete transparency on who has been intracting with it. This is what Blockchain-enabled organisations like non-profit DAOs (distributed autonomous organisations — organisations who internal processes are defined as software and cannot be corrupted and are transparent and all times) enable us to do: make the exact use of every Euro or Dollar transparent as everyone inside such an organisation has a public digital identity that cannot be subverted by any means, physical or digital. Every interaction with funds, represented as tokens, is recorded and immediately publicly visible — there is no option to transact invisibly.
The combination of secure digital identities for everyone and everything, including legal entities, is what allows us to make digitally transparent what used to be accessible only to legal professionals. That is the power of Blockchain-enabled organisations for the public good.