Blockchain for Philanthropy – Master of Development Practice

April Zhang is a full-time graduate student in UC Berkeley’s Master of Development Practice program.

Today we skip the part explaining blockchain technology and begin with its implication for philanthropy and social sector funding.

Blockchain technology is primarily designed to eliminate corruption and opacity through a long transaction process that is hard to track. Thus blockchain technology by nature solves one of the biggest problems in charity, which is trust and transparency. Furthermore, blockchain technology brings another advantage to charity work—- donors could track the life cycle of their donations as every transaction is recorded without possibilities of data fraud. Another side effect of blockchain based charity can be that the organizations that handle the donation can avoid the large amount of accounting work and boost their working efficiency.

Things are similar when it comes to social sector funding. The real impact can be vague and hard to track. Along with the lack of transparancy, transaction costs are usually high. Blockchain seems to a potential solution.

Nonetheless, can the appearance of Blockchain-based charity actually revolutionize charity and social sector funding? Since early 2016, organizations that try to do charity work and deliver aid through the form of Bitcoin began to emerge, along with organizations that do impact investing based on blockchain technology. Here we can take a closer look on how these organizations actually utilize the blockchain technology and then we can have an answer to the question based on one’s own opinion.

Blockchain Charity Foundation is a non-profit organization dedicated to achieve SDGs through programs funded by Bitcoin donations. Bitcoin as an example of cryptocurrency, is a new form of digital money not linked to a government or central bank, which is based on Blockchain technology. The organization is initiated by Binance, the world’s largest cryptocurrency exchange by trading volume. BCF help each end beneficiaries open their own crypto wallet, which does not require a smartphone, to receive the Bitcoin donation directly with 100% transparency. At the same time, they help the end beneficiaries to connect with food/ clothes and other material suppliers that trade in the form of Bitcoin. In this way each transaction and trade are completely transparent and the beneficiaries could be fully engaged in how they want to use the donation, instead of letting a certain level of government or leaders tell them how their donation are going to be used.

However, an obvious limitation is that Bitcoin has less liquidity generally speaking, which makes the beneficiary’s full right to use the donation less impactful than it sounds, as it is actually hard for beneficiary themselves to find a way to trade in Bitcoin on their own. In most of past programs, BCF actually decided how to use their Bitcoins for these beneficiaries, although through elaborately designed intervention, (for example in one program called ‘Binance Lunch for children’) the Bitcoin donations were transferred to each of the end beneficiaries, which were used to buy food from a food supplier and then cooked into lunch for children in some schools. is another prominent player in this field. ‘’, where the ‘si’ stands for ‘social impact’, is a platform that brings transparency to social funding through blockchain technology. Based on smart contracts of blockchain technology, it incorporates impact data into “impact facts” that live on into perpetuity. This helps social organizations to run projects transparently, using smart contract-based incentives to ensure their impact is independently verified and accessible to everyone, which makes it much easier for philanthropic organizations, donors and impact investors to identify and scale social projects that demonstrably work.

Unlike BCF, does not accept Bitcoin donation currently. “In time, as people become more familiar with the technology, our plan is to empower them to interact with the smart contracts directly, and start donating with cryptocurrencies if they want to.” CEO of said in an earlier interview.

There’re other organizations like the Bithope and Helperbit are also doing interesting works that incorporate blockchain technology into Philanthropy. Currently, it’s still too early to decide whether blockchain technology is going to revolutionize philanthropy, but we might expect the answer in the near future.

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