Blockchain could ‘do away with the charity sector altogether’

07 Nov 2017 News

The development of Blockchain could fundamentally reshape the nature of charity, and even do away with the charity sector altogether, Rhodri Davies from Charities Aid Foundation has said.

Writing as part of Acevo’s collection of articles for its 30th birthday celebrations, Davies said that blockchain, which he describes as being a record of all the transactions in a system that does not rely on a third-party to maintain it, could bring about fundamental changes including changing charities in their role as service deliverers.

Davies, who leads CAF’s thinktank Giving Thought, wrote the article on the opportunities that blockchain offers. He said: “Blockchain is the technology that provides the infrastructure for the digital cryptocurrency bitcoin. It could fundamentally reshape the nature of charity, and even do away with the charity sector altogether.”

He said that enabling donations on the blockchain will have a “radical impact” because donations would be 100 per cent transparent. A donor would be “able to follow their gift all the way through a charity to the beneficiary, and beyond”.

Davies said that the biggest impact of the technology will come from the way it “enables a wider trend of decentralisation and disintermediation”. He said that this is "about enabling those who want to do social good to act together directly without intermediation by centralised charitable organisations”.

He said that this could mean we “may no longer need the infrastructure provided by intermediary organisations to coordinate decision making, logistics and so on”.

He said this can be done through blockchain in the form of Distributed Autonomous Organisations. This is a collection of individuals, groups and things recorded on the blockchain and bound together by smart contracts, which are self-executing computer programs that perform set actions when specified conditions are met.

Davis said that this model could “transform civil society”. He said: “It could, for example, enable networks of donors to democratically choose and fund projects or individuals all around the world based on a common cause. It could make it possible to coordinate national or even global campaigning and advocacy work without the need for a single intermediary or group of intermediaries.”

He said that this does not mean there will be no role for social leaders, and that there will also be a “vital role for the expertise that so many people in the charity sector have”.

Davies said: “Once the ability to act is democratised, it will be incredibly important to ensure that this action is well-directed. And in the absence of an intermediary that can do this by centralising control, those who wish to lead in the social sector will have to rely on their expertise and use of evidence to win support more than ever.”

He concluded: “It is possible that the next 30 years will see the beginning of the end for charitable organisations, but not for social leaders. Their role will almost certainly evolve while remaining as crucial as ever.”

Rhodri Davies will be speaking at Civil Society Media's Charity Technology Conference this Thursday. For more information, or to book one of the last few remaining places, click here.

 

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