How digital currencies can shape accountability and boost transparency in charitable giving
For potential donors, both businesses and individual citizens, a hindrance to charitable giving is the opacity of the process. Once you make a donation, you may be confused about what happens next. Where does it go? How is it helping? That’s the problem.
In 2018, there were over 1.5 million charities recorded in the U.S. alone. Often, it’s easy to see where blockchain can improve processes, eliminate issues and benefit the world’s biggest industries. Now, there’s a new one creeping into the global conversation online and off: charities.
It might just be one of the most interesting discussions yet. So much so, it’s earned itself its own nickname.
What’s “crypto philanthropy”?
It’s the term for the staggering emergence of crypto-coins and crypto-charities. One by one, charities like UNICEF are making headlines for accepting digital currencies. Others, like eSolidar, are making it a key aspect of their mission by working with us. We’re exploring what could happen to the charity world if it was powered by blockchain.
Blockchain Means Complete Transparency For Everyone
From charity to customer to the cause. With blockchain, all records happen on a ledger that is completely public. It’s a key part of what makes blockchain so revolutionary as an un-editable, factual recording tool. By default each transaction is easily traceable. If implemented on a charity-size scale, it could put donors’ minds at ease and reinforce the charitys’ reputations for integrity.
Blockchain Means Funds Go Directly from Donors To Charities
Many digital currencies are completely “decentralised”. This means they are not tied to any government or institution, and are not regulated by them. For example, with the Utrust payment platform, fees are sent without an intermediary. Funds always go directly from donors to charities, who can get paid in fiat. This way, charitable donations across borders are seamless.
Agreements are transparent and secure
Blockchain tech can also aid in making “agreements” completely transparent and secure. Much like we discussed before, digital contracts that are completed through the chain enter a public ledger where every action is traceable and unique. What does it mean? You got it: it ensures all contracts can’t be modified without all parties agreeing.
Reduced taxes and expenses
The only intermediaries in the process are whoever processes the transactions. This means the amount spent on middle-men is vastly smaller. Utrust, for instance, charges only 1%. Conversion rates, another big expense, are completely eliminated. By allowing charities to automate part of the processes, it also makes the running of the charity itself less expensive. Last but not least, it allows us to eschew capital gains taxes, which would enable the donor to claim a higher tax deduction.
The burning question: what are the disadvantages?
The truth is there aren’t many. There are some concerns, such as volatility. Most digital currencies are being traded on highly volatile markets, which could swing in value, but that just depends on how you do it. Utrust’s service, for instance, will protect you from that. There’s also security concerns on the human side of things. Whilst the technology is quite robust, access to funds depends on a private key. If that key is lost, it is impossible to recover. If it is misplaced, someone else could gain access to the wallet.
Why aren’t people doing this more?
They are! You have cases such as the Pineapple Fund, which distributed around $86 million in donations, Fidelity Charitable who received over $100 million, UNICEF who is already taking digital donations, the Red Cross, Save the Children, United Way, the Wikimedia Foundation, and the Electronic Frontier Foundation. Then there are organizations like eSolidar who are making this a key component of what they do.
Adoption of digital currencies doesn’t happen overnight. A key component of this process is building the trust of businesses and communities. It’s in helping educate the world at large to the advantages of blockchain technology. Crypto-philanthropy shows the power for good blockchain technology and digital currencies can unleash.
It is a true opportunity to change the world for the better. If you are ready to join this revolution, Utrust can help you make it a reality. You can start changing the world with the money of tomorrow right now.
