Bitcoin’s role in philanthropy

By June 20, 2021 No Comments

Blockchain’s potential impact on global philanthropy and its implications.

It may have been a time of concern and anxiety, but according to McKinsey & Co, the global pandemic increased the desire of the international philanthropic community to give and strive to be more impactful.

In a paper called A Transformative Moment for Philanthropy, Tracy Nowski, Maisie O’Flanagan and Lynn Taliento wrote, “The Covid-19 pandemic has prompted a number of donors to dig deeper into their endowments and change their grant-making approaches to deploy more capital than they had planned.”

Philanthropy and Blockchain

Stanford University have been collating a Master List of Blockchain for Social Good Projects and, to date, have more than 240 entries. The projects listed include international charitable donations.

Key philanthropic institutions have explored and are aware of the potential that a digital currency may have, particularly in the developing world. This is due to the fact that bank fees, high exchange rates and inflation can weaken the buying power of international donors. Bitcoin donations, however, could ease the collection and transfer of donations without the same transaction fees.

Philanthropy accepting Bitcoin

Notably larger charities have started to explore ways to accept Bitcoin donations and, due to the pandemic, we have seen this effort increase, from Save the Children to the Khan Academy. This has sparked an interest in setting up cryptocurrency wallets among other charities and foundations from around the world.

In 2017, the UN had a number of blockchain-based projects aimed at resolving issues in delivering aid, such as Syrian refugees in Jordan’s Zaatari camp being given an allowance in cryptocurrency. When purchasing items at the camp supermarket, their identities were authenticated using iris scans and the amount they had spent was deducted from their allowance.

Innovative giving: Are we there?

An open question, however, is whether the use of blockchain in philanthropy is desirable, feasible and viable, and whether existing and proven technologies are – if implemented rigorously – sufficient to improve the state of philanthropy and, in turn, resolve some of society’s key problems.

The use of blockchain and Bitcoin may not be practical or applicable for small to medium charities, but the use of such technology within the philanthropic arena should be on their radar. Such breakthrough technologies including blockchain, the Internet of Things (IoT) and artificial intelligence (AI), alone or in combination, might provide innovative and unconventional solutions to the major social challenges in a post-Covid world.

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Written by: Gokhan Baykam, CEO Relight Capital, and Zahara Malik, CEO Grosvenor Capital
Publication date: June 20, 2021

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