- By Debasish Das
Philanthropy in non-technical language is being human, which leads to caring and giving to people in need. This is one of the behaviors, which differentiates us from other living organisms on this planet. The urge of giving grows as we evolve and moves up the Maslow’s hierarchy. While time passes by, more and more people are getting involved globally in this noble cause of giving, thus leading to the creation of an organized sector called – CHARITY.
Globally, approx 1.4 billion of the population is contributing to charities, leading to an approx fund of $2 trillion being raised annually. As per the latest statistics Indonesia, Australia, NewZealand, USA, and Ireland are the top five countries contributing to the philanthropy domain. The major segments in which charity is been raised currently are Education, Childcare, Women protection, Healthcare, Environment.
As with any industry, the Charity domain now also needs to evolve to cater to future requirements and to set up systems that help humankind in general. Challenges that this domain is currently facing are trust, transparency, reach and awareness, speed of execution, processing and fundraising cost to name a few.
Trust, Transparency and Accountability: The biggest problem in the charity domain is trust, as the individuals/corporations who are donating sometimes are not sure if their contribution is reaching the end users. Blockchain using its distributed ledger process ensures 100% transparency as the accounts are in public view and anyone can crosscheck the flow of funds to the last mile.
Reach and awareness: Blockchain, because of its borderless feature connects the global population and allows anyone sitting even at home to connect seamlessly to the global audience, thus allowing a global platform to reach out to anyone they intend to help.
Speed of Execution: This is another strong value proposition Blockchain provides to Charities. In the traditional mode of fund raising, the banking channels consume a lot of time and fees as well; sometimes this even extends to days for international transfers. Blockchain reduces this period from days to seconds and all that at a lower fee, making it a win-win situation for both the donor as well as the charity.
Cost of fundraising: As pre-latest statistics, only approx. 67% of the funds raised reach the intended use, the rest is lost in terms of fees, administration cost, fund raising cost etc. Blockchain can bring this down 33% – substantially – thus ensuring better utility of the funds raised.