What really happens when you donate to a charity?

Charity: benevolent goodwill toward or love of humanity.

Unfortunately there are many cases of so-called charity organisations that do not stand by their promise of goodwill towards humanity. It’s easy today for this to happen as organisations are managed with obsolete management approaches that make them highly susceptible to frauds and inefficiency.

It is usually very difficult or even impossible to understand how exactly donated funds were allocated. Current system even allows for fraudulent acts to remain hidden for prolonged periods of time or even indefinitely. As a consequence there are countless unclear donations spending plaguing many charity organisations.

More than a third of the fraud incidents reported in 2015/16 by charities were committed by staff, trustees or volunteers, the UK Charity Commission has revealed. This swallows considerable portion of 100’s of billions of dollars of yearly donations worldwide - dollars that never reach the ones who need them the most.

Core problem is how charitable organisations are currently managed. Charities rely on trust in authority to secure honest and efficient use of donations. Unfortunately authority is today represented by a person or a group of persons, who can easily be, by human definition, biased and susceptible to greed which results in theft and misuse of donated money.

Blockchain is another type of authority which is on the other hand managed by a “smart contract” — an algorithm that, once deployed to blockchain, cannot be altered or compromised in any way. In essence a smart contract is a set of instructions on how to manage a particular process. A set of instructions that are guaranteed to execute exactly as predicted, planned and defined: ultimate advantage over human-based authority as sometimes you just want heartless efficiency of a computer.

Blockchain will revamp the long overdue standards of charity organisations and eradicate misuse of charity concept. DAOnate.it will lead this transformation.

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