How Nonprofits Can Use Blockchain to Achieve Their Goals!
The benefits for donors are many, including increased security and trust through the utilization of blockchain technology.
Blockchain has a tainted reputation. Many people think of cryptocurrency as ransomware attacks when they hear the term, but the Blockchain is simply a method for maintaining secure data records. It refers to a decentralized information database with “blocks” or digital containers that contain time-stamped transaction data and are linked.
Every subsequent block includes a compressed version of the transaction that preceded it, making it impossible to change information maliciously or through negligence.
The invention of Blockchain was initially aimed at creating bitcoin. However, since going live, the technology has been utilized by the wide range of firms in various industries, such as finance and cybersecurity. In 2016, industry experts claimed that it had “officially gone mainstream,” citing initiatives Microsoft and Bank of America announced. Deloitte reports that more than one hundred financial institutions have invested an estimated $1 billion in the Blockchain.
Blockchain can help lower expenses, protect data and donor information, and increase efficiency across an organization. It may also have a wide range of applications for nonprofits. For example, Blockchain may reduce costs, safeguard data and donor information, and streamline operations across an enterprise.
Blockchain’s Security Advantages for Nonprofits
Blockchain technology may provide an organization with complete control over its data. The goal of the technology is to regulate the communication between parties by automatically maintaining an un-editable record of currency transactions. This allows a nonprofit to keep track of every dollar that goes in and out of each department, making it impossible for hackers to get inside. Not only will attackers be unable to breach the system, but internal consumers will also be unable to modify or erase historical records.
Blockchain technologies are ideal for the secure handling of money by nonprofit organizations like grassroots development teams, simple records for internal use, and a safe method of moving funds from headquarters to regional offices.
Blockchain may help nonprofits save money
Blockchain technologies may automate a variety of administrative activities, which can slow down the operations of NGOs. For example, streamlining workflows by removing record-keeping and routine data assessments from the job of nonprofit workers frees up resources to focus on higher-level planning rather than day-to-day details.
Blockchain may provide a cost-effective tool for organizations to help them develop. For example, Blockchain can save charities money by allowing them to avoid administrative costs and other expenses in the meantime. Microsoft Azure, for example, employs blockchain technology to enable businesses to expand without introducing new security risks.
The Blockchain protects Donor Information
Many organizations, especially those incorporated in the United States, are hesitant to accept cryptocurrency donations due to money laundering and security concerns. However, whether a nonprofit accepts cryptocurrencies or utilizes it to manage its finances, the technology can aid the organization in assuring contributors that their information is being lawfully handled. In addition, because cryptocurrency and Blockchain encourage anonymity, an organization that uses the technology may experience a rise in genuinely selfless giving.
Blockchain technology can also aid in cross-border giving since its data is dispersed and not centralized. The technology may help a nonprofit become more than simply national or political in scope.
Blockchain will allow charities to grow their capacity as more resources pour into the charitable sector (particularly the rise of megadonors like Bill and Melinda Gates), according to DisruptorDaily. For example, blockchain “has shown the capacity of allowing donors greater say in which causes become eligible for funding,” as observed by DisruptorDaily. This implies that significant contributors may choose where their money goes, and they can also get real-time information on where their donations are being spent inside a charity.
The same Forbes study also reveals that Blockchain’s transparency has boosted consumer trust in charities: people know where their contribution is going when an organization’s data is available and safe. Moreover, that openness and security may assist organizations in pursuing their purpose-driven goals.
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