DonorsChoose.org got a $29-million donation via cryptocurrency and donor-advised funds (DAFs) have been seeing more donations of cryptocurrency in recent years. That’s great and all but if your nonprofit doesn’t get donations in cryptocurrency, does that make blockchain irrelevant for your organization? Not necessarily.
Sheila Warren and Marnie Webb delved into what blockchain can do for nonprofits beyond crypto donations during a session called “Blockchain For Nonprofits: Fact vs. Fiction” (#18NTCblockchain) at NTEN’s annual Nonprofit Technology Conference this past spring in New Orleans.
Digital currency is the equivalent of a cash transaction online – a situation designed to minimize trust issues. The irreversibility of the ledger makes the transaction difficult to change and wider distribution is safe so nobody really owns the network. The elimination of the intermediary organization, such as eBay, puts more money and power back into the people making the transactions.
The pair identified five use cases for blockchain that have nothing to do with donations:
- Make sending and receiving money easier and cheaper;
- Protect open data;
- Verify sustainable practices;
- Track aid shipments; and,
- Prove ownership.Webb offered the example of migrant workers and remittances. One out of 5 families in El Salvador depend on remittances for half of their income, according to Webb. These are small transactions that sometimes have processing fees as high as 20 percent. Banking can be expensive if you don’t have a lot of money.
Migrant workers paid in cash without direct deposit who need to send money home either use a bank which is really expensive or they stand in line at the grocery story wiring money, which is expensive in many ways. It solves a lot of problems for people who genuinely can use that money, Webb said, freeing up 20 percent of half their income, potentially.