With blockchain being touted as a revolutionary force with the potential to disrupt nearly every industry, from finance to healthcare, there is a sector that is often overlooked when it comes to implementing distributed ledger solutions: the nonprofit world.
The UN is catching up on cutting-edge tech
Across the United Nations system, multiple initiatives are cropping up that show officials are becoming aware of the possibilities the technology brings to fast-track the implementation of the Sustainable Development Goals. Recently, in an unlikely display of inter-agency cooperation, the UN agencies came together in an effort to develop applications of blockchain technology that could help tackle Climate Change. In an initiative dubbed the Climate Chain Coalition, 32 organisations came together to address issues such as:
- Monitoring, reporting and impact verification
- Transparency, traceability of funds and cost-effectiveness
- Making incentive mechanisms for climate action available to those of lesser means
In a different area of the UN’s work, the World Food Programme (WFP) recently created a blockchain-based identity platform, allowing 10 000 Syrian refugees to pay for grocery shopping just by having their eyeballs scanned. The creators of the system hope it will one day evolve to become a digital ID stored on the blockchain. This would make refugees less prone to identity theft and eases the process of entering into a host society, with a track record of personal information such as identification, education and even credit score readily available on the blockchain.
Another area in where blockchain is set to improve the global non-profit scene is funds transferring. According to the 8th Secretary General of the UN Ban Ki-moon, corruption prevents as much as 30% of all development assistance from reaching its target. The current system is prone to all kinds of fraud. Having blockchain-based value transfer systems, much like the one already being deployed by WFP, could do away with this issue by removing intermediaries from accessing the funds all together, improving transparency and traceability. Value could be transferred directly to the end recipients, with all transactions logged and publicly visible on the blockchain.
Transparency and more efficient fund allocation can also have the benefit of opening up the aid sector to new participants. If the funding structure is tethered to an immutable, peer-to-peer platform, individual donors would have the option of directly donating to their chosen cause and tracking the use of their funds. According to the special advisor for UN engagement and blockchain technology at the UN’s Office for Project Services (UNOPS), Yoshiyuki Yamamoto: “if ordinary people can contribute directly to the UN and the international community, that is a completely new avenue of fund flow from rich countries to developing countries.”
In other words, a niche exists for solutions which will change the way in which the global aid sector moves funds. Moving development assistance and humanitarian aid from centralised systems to blockchain based ones seems only a matter of time; in fact, solutions are already coming to fruition.
DECENTRALIZED SOLUTIONS FOR DEVELOPMENT ASSISTANCE
The nonprofit world recognizes the need of partnerships to deliver the best decentralized solutions. During the recent Blockchain for Humanity Global Challenge companies, civil society, non-governmental organizations, academia and other stakeholders who wanted to be involved and contribute came together.
The challenge was won by ConsenSys, a startup that aims to stop child trafficking in Moldova through implementation of Personal Digital Identity, a decentralised, immutable ledger containing the personal data of 350 000 children in the pilot phase. The project founders are hoping that storing personal identification data on the blockchain will make it much more difficult for traffickers to move children across borders using fake IDs.
Another blockchain project, AidCoin, is aiming to facilitate transparent, traceable donations to social impact organisations via a new cryptocurrency. Its value proposition lies upon linking donors directly with the organisations while cutting intermediary fees and providing a reliable way to track the funds given, with the option of pulling them if certain KPIs are not met.
NOIZ, a decentralized cognitive ad network is taking a different approach. NOIZ’s main functionality is connecting publishers, advertisers and users in a decentralized ad exchange which weeds out spambots and solves the $31bn a year problem of ad fraud. NOIZ’s tokenomics model incentivises users, advertisers and publishers to donate part of the funds regained from shutting down ad fraud to social impact organisations. All platform users have the ability to decide which charity they will donate their NOIZ tokens to via a consensus generating mechanism embedded in the blockchain.
With the total number of ICO funding in the first quarter of 2018 already surpassing the funds raised in the entire 2017, the blockchain startup scene looks set to bring innovation to new heights and the nonprofits are not letting this wave pass them by.
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