Charities are 'behind the curve' on blockchain, report warns

The paper, from Charity Futures, says the sector should link up with technologists in a taskforce to investigate the potential of the technology behind bitcoin

Blockchain technology could revolutionise the charity sector as much as the internet did, according to a report published today.

But Nothing To Lose (But Your Chains), which was commissioned by the think tank Charity Futures, warns that the sector is "behind the curve" and missing opportunities.

It calls for sector leaders to team up with technologists to create a voluntary sector taskforce to get to grips with blockchain.

Blockchain is the technology behind the cryptocurrency bitcoin, but the report says its potential benefits "extend far beyond digital money".

They include better services, improved safeguarding and accountability, modernised giving and allowing donors to see instantly where their donations are being spent and the impact they are having.

"Either charities will be left behind while the future happens around them, or its leaders can step forward and shape it, here and now," says the report, which is written by Asheem Singh, former interim chief executive of the charity leaders body Acevo.

Technologists, the report says, are leading the debate, but lack understanding of the sector, while traditional sector bodies lack knowledge of blockchain. The two therefore need to work together, it argues.

"The traditional avenues of charity advocacy – namely, umbrella bodies and large charities – do not have anything like the required expertise to handle this sort of conversation," it says.

Other recommendations include creating a fund to finance blockchain innovations and finding a trust interested in innovation to develop a blockchain encyclopaedia that would "foster a charity blockchain culture".

The report identifies the international aid sector as "ripe" for blockchain.

It says this new form of decentralised, open-source technology can help to overcome "endemic" bureaucracy and corruption "by creating a transparent, end-to-end ‘supply chain’ for each project".

The homelessness charity St Mungo's is highlighted for being one of the first charities to embrace blockchain. It uses a platform called Alice to run fundraising appeals that allow donors to track how their donations are used and choose to receive refunds if the charity fails to achieve its promised goals.

"Like the internet before it, blockchain has the potential to revolutionise the charity sector," the report says.

Singh said: "Fads come and go, but blockchain is here to stay. Charities must own this debate, engage with blockchain and begin to create their own future using these tools, or risk being sidelined as the future takes shape around them."

Sir Stephen Bubb, director of Charity Futures, said: "Blockchain offers charities great potential for so long as they take time to understand the technology.

"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?"

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