Charities have been warned to “get into the guts” of blockchain soon, or risk being left behind.
Blockchain technology offers a way for funders to go directly to beneficiaries and their immediate supporters. According to a new report commissioned by Charity Futures, Nothing to lose (but your chains), charities need to get to grips with it now, before it’s too late.
Charity Futures is calling for all charity leaders to come together and explore the opportunities that technological innovation could provide to the sector.
It has warned the sector that unless it gets involved with blockchain early on, charities may miss out on the chance to bring their experience and in-depth understanding of the needs of their communities as the technology develops.
While blockchain can mean quicker, more efficient funding, with donors having more power over who benefits from their giving, Charity Futures said it can also mean “loss of accountability”.
“It could mean that charities’ in-depth knowledge of the issues and ability to manage interventions on the ground will be side-lined, creating new dangers of safeguarding and integrity,” the think tank said.
It argued that now funders must “understand and support” investment in charity infrastructure, facilitating innovation and growth, while demanding greater accountability on the front line.
“Blockchain offers charities great potential for so long as they take time to understand the technology,” Charity Futures director Sir Stephen Bubb said.
“But it also throws up a danger if people can contribute directly to the front line. Who will pay to develop charity infrastructure? And how do we ensure we have proper safeguarding arrangements in place if donors don’t want to support the charity by paying for their overhead costs?" he added.
“Oversight and administration are so boring for many people but they are exactly what ensure effective charity. Charities must work even harder to educate donors and the public on the paramount importance of core cost funding.”