Blockchain Technology Can Change the Efficiency of Non-profit Organizations

Blockchain has the potential to improve existing processes and create new models for a range of functions. The ability to simplify and operate at a much lower cost makes it an ideal technology for budget constrained charitable and humanitarian organizations. It can also improve efficiency and speed up the delivery of goods and services.

Supporters of this technology predict that blockchain technology can change the efficiency of non-profit organizations in the following ways:

1. Aid distribution and emergency relief services. Blockchain is very suitable for supply chain solutions. It provides higher efficiency by providing proven documents to track the whole process of food, medical supplies and other materials from their source to their final destination.

Smart contracts can accelerate the distribution of relief services by eliminating paper-based processes and records. Blockchain applications can also track aid workers around the world and promote cooperation among agencies in times of crisis. The direct transfer of relief materials to the blockchain can help organizations quickly avoid the bureaucratic style of the government, avoid the possible improper handling of funds by intermediaries, and accelerate the assistance to where it is most needed.

2. Cryptocurrency contributions. Donations made in cryptocurrency are converted into cash to fund charitable activities and projects. Fidelity charity is a donor Advisory fund project operated by Fidelity Investment Company, which helped donors and non-profit organizations raise nearly $22 million in bitcoin donations in 2017. The a-cubed subsidiary of Airbus Foundation launched an open source public blockchain project to help non-profit organizations accept and manage cryptocurrencies and enable smart contracts in their operations.

3. Donation tracking. The Internet scandal of Chinese charities has triggered public distrust of the use of donations by national charities. Therefore, the Chinese government announced that it would use blockchain technology to improve the transparency of its social service activities. Charities in other countries have also taken note of this. Blockchain can provide a secure, transparent and open platform for donors to track the use data of their donations.

Most non-profit organizations have tight budgets. Blockchain can improve the record keeping process, reduce overhead, and optimize background operations in a range of functions, from payroll processing to stakeholder reporting. Non profit organizations often find that the supplier relationship is decentralized and difficult to streamline due to system interoperability. Blockchain eliminates the difficulty of interoperability, simplifies the purchase process and saves time and money.

4. Funding. Blockchain applications can be used to manage grants throughout the life cycle. The smart contract on the blockchain can provide government agencies and other funding agencies with the function of applying for and managing grant agreements, accelerate the release of funds and track the progress.

Some charities around the world have been criticized for abusing funds and poor communication with donors. Non profit organizations can improve transparency by providing public access and monitoring data on donations, their distribution and use on the public blockchain platform. Ant financial, the payment Department of Chinese Internet retail giant Alibaba, is using the blockchain to bring openness and visibility to the donor's sources, information and other relevant data.

Blockchain technology has great potential in transforming the processes and operations used by non-profit organizations, and can create new models to accelerate service delivery and improve the value of services.

The non-profit sector can also make considerable profits by investing in and developing new blockchain applications in many areas. If they want to seek a deeper understanding of this emerging technology now, the leaders of non-profit organizations can better decide how to apply blockchain technology to their operations.

1. Identity records. Around the world, 25 per cent of children under the age of five have no birth records or government registration certificates. This lack of documentation often accompanies children as adults, complicating banking, travel, property ownership and other life events. When people move or experience natural disasters, their birth certificates are often lost or destroyed.

In less developed countries, obtaining copies of birth certificates may be a long and tedious process, but individuals often need identity cards to obtain government services, travel, work or engage in financial transactions. The blockchain creates permanent records that cannot be changed and is available to all qualified users. By placing identity records on the blockchain, any institution can access and confirm an individual's identity, age and nationality.

2. Property rights. Land speculation often poses a risk of confiscation of illicit property, especially in developing countries with high levels of corruption, low literacy and weak property laws. Blockchain applications have the potential to transform current processes by providing transparent and authentic documents to attribute owners. The world bank has worked with Medici land management to design, implement and evaluate pilot projects to create blockchain claim certificates and related infrastructure to ensure property rights.