Non-Profits & Blockchain: A Match Made in Heaven?

An overview of what Blockchain has to offer to the non-profit space.

Blockchain has taken the world by storm. It has so much to offer for every industry with its fancy and attractive core pillars:

• Decentralization
• Security & Immutability
• Transparency

After all, it opens up a new door to a new era: An era where users can own their data without being at the mercy of a central authority with absolute control over systems.

Today, as of 2022, blockchain is already being implemented across numerous industries, including finance, education, law, investment funds, art, and so many more, even as it’s at its early stages.

Out of all those industries, however, there’s one that has immensely struggled with the limitations of centralization and suffered huge losses due to a lack of transparency: The Non-Profit Space.

Blockchain Applications for Non-Profits

NFTs for Fundraising

A significant number of non-profit organizations and charities heavily rely on fundraising and donations from the general public to continue their operations. NFTs are a great space to tap into for non-profits to offer a symbol of recognition to donors and build a community around NFT collections.

DAOs for Better Management

Decentralized Autonomous Organizations (or DAOs) are community-led entities with no central authorities, meaning that members collectively make decisions such as upgrades or treasury allocations.

DAOs ensure trust, transparency, and security throughout the processes and operations across an organization. Therefore, choosing to run non-profits as DAOs can help organizations build greater trust with their audience and avoid unnecessary scandals and problems that often hold them back from fulfilling their mission.

Fungible Tokens for Fundraising and Rewards

What if you had a currency just for your non-profit?

I know it sounds cool and all, but it doesn’t stop there —

Having a native currency for your charity or non-profit organization can allow you to create effective and secure reward systems and incentives while contributing to the (crypto) economy in the grand scheme of things and creating an opportunity to create real value from your tokens.

Tokens can be distributed as rewards to contributors and prizes/incentives for various operations run by your organization.

These are only 3 of the most promising applications that are already being implemented today in 2022. However, a lot more to come as the technology is implemented and adopted by a growing number of organizations.

But is now the right time?

Timing is crucial to new trends and the implementation of new and emerging technology and thus needs to be accounted for when considering a transition to blockchain solutions.

In short, I think that the right timing is not here yet.

The non-profit has shown resistance to change in general, and the likelihood of it being any different towards blockchain are exceptionally slim due to several reasons.

Volatility

Cryptocurrencies are incredibly volatile, and their direction is mostly unpredictable.

Relying on cryptocurrencies and blockchain in its uncertain stages for the core functions, management, and finances of non-profits and charity organizations can prove deadly. Waiting for the technology to be better established might be a wise move in this situation.

Economic Incentive

The economic incentive behind non-profits is, unfortunately, very weak. Most non-profits rely on fundraising, donations, and sponsors to maintain their activities.

In simpler terms, there is often not a group of people who directly benefit from non-profits who can push for rapid adaptation and quick and efficient implementation of new solutions.

Misinformation about the Technology

There are so many myths and fake information circulating about crypto and blockchain technologies, resulting in a significant part of the general population not having the confidence to deal with the technology.

Thus, waiting until a large majority of the population adopts an open-minded mindset towards the technology as it’s becoming more mainstream will be key to the success of Blockchain adoption in the non-profit space.

Conclusion

Blockchain is a revolutionary technology, and it holds vast unlocked potential for the non-profit space. In the coming years, we will see incredible developments in the blockchain that will create even more opportunities for the non-profit space to progress. However, it will be up to the industry leaders to lead the adoption and transition towards blockchain and web3 solutions.

What about now though?

The timing is not quite right to adopt blockchain solutions and make them a core aspect of non-profits; however, smaller-scale solutions can prove hugely beneficial, and adequate planning to develop and fund the transition to blockchain solutions will undoubtfully provide non-profits with a huge step ahead.