The application of blockchain by nonprofits to increase transparency and accountability in the social impact work they do is one of the interesting uses of the technology.
It can give donors, volunteers, and everyone involved in one way or the other the confidence that every resource and fund given for social impact is accounted for.
Here are 7 ways nonprofits can deploy blockchain technology to increase transparency and accountability.
Nonprofits are using blockchain technology to create a transparent record of all the donations they receive.
This helps track the entire amount they receive and when they receive it, which helps build trust with the donors that their donation was sent to the organization and not diversified.
Traceability and Supply Chain Transparency
Nonprofits can use blockchain technology to increase transparency in their distribution of supplies, this helps in creating a transparent, traceable, and auditable record of all distribution that occurred within their supply chain.
Also read, Can Blockchain solve the Accountability of Funds around Humanitarian Service?
Nonprofits can use blockchain technology to create a transparent and auditable record of the impact that their programs have on the communities they serve.
This can help to increase transparency and accountability in terms of the effectiveness of their programs.
Data and Identity Management
This is another interesting use of blockchain technology by nonprofits, they can implement the technology in data collection, storage, and data sharing systems as well as serving as an identity management tool.
As an identity management tool, it is used to provide personalized and transparent services.
Use of Smart Contracts
This helps nonprofits automate the funding and project execution process. Now, smart contracts are self-executing once the terms set in place are met.
For example, if a certain amount of money is needed for a project, and the target is set using smart contracts, once the amount is realized the funds are released automatically to the proper channel to carry out the project.
There isn’t room for siphoning money from unsuspecting donors, because it can’t take more money once the target has been met. Ultimately, this helps increase efficiency, transparency, and accountability.
Use of Tokens
This is the use of tokens to represent a share in their organization, which other interested organizations or individuals can purchase as a way of supporting the nonprofit to be named as a contributor in their activities.
Decentralized Autonomous Organizations (DAOs)
The use of DAOs, which are decentralized organizations that are operated through smart contracts. Members can make decisions or cast their votes collectively through DAOs.
In cases of selecting the members of the board, everyone gets to see the voting process. This helps in creating an atmosphere of trust within the nonprofit and in turn, increased transparency and accountability.
There are no foreseen limits to the use of blockchain technology by nonprofits, instead, the technology has proven to be a great ally in their social impact journey with tools that will aid in increased transparency and accountability.
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