Blockchain and Charities: Increasing Transparency and Accountability in Donations

Charitable donations have been an essential part of society for centuries. From religious tithing to modern-day philanthropy, the act of giving has always been considered a noble and altruistic gesture. However, with the growth of the internet, charities have had to adapt to new challenges, such as increased competition for donors, fraud, and the need for transparency. The advent of blockchain technology offers a solution to some of these challenges by increasing transparency and accountability in donations. In this article, we will explore how blockchain technology can benefit charities and donors.

What is Blockchain Technology?

Blockchain technology is a distributed ledger that is used to record transactions. It was originally developed for Bitcoin, the first decentralized cryptocurrency, but it has since been used in various applications. A blockchain is a public, decentralized ledger that is maintained by a network of computers. Each block in the chain contains a record of transactions, and once a block is added to the chain, it cannot be altered.

How Can Blockchain Technology Help Charities?


One of the biggest challenges facing charities is transparency. Donors want to know that their donations are being used for the intended purpose and that the organization they are donating to is legitimate. Unfortunately, there have been cases where charities have misused funds or even been outright scams. With blockchain technology, all transactions are recorded on a public ledger that anyone can view. This makes it easy to see where donations are going and how they are being used.


Another challenge facing charities is accountability. Donors want to know that their donations are having an impact and that the charity is being responsible with their funds. Blockchain technology can help with this by creating smart contracts. Smart contracts are self-executing contracts that automatically enforce the terms of an agreement. This means donors can set conditions for their donations, such as the funds only be used for a specific project or being released in increments based on milestones. Once these conditions are met, the smart contract will automatically release the funds.


Charities are often faced with high administrative costs, such as processing donations and managing paperwork. Blockchain technology can help reduce these costs by automating many of these processes. For example, donations can be processed instantly, and administrative tasks can be streamlined, freeing staff time to focus on more important tasks.

Reducing Fraud

Unfortunately, there have been cases of fraud in the charity sector. This can range from misusing funds to setting up fake charities. Blockchain technology can help reduce the risk of fraud by providing a transparent and immutable record of transactions. This makes it easier to identify any suspicious activity and ensures that all transactions are legitimate.

Case Study: The UN World Food Programme

The United Nations World Food Programme (WFP) is the world’s largest humanitarian organization fighting hunger. It delivers food assistance in emergencies and works with communities to improve nutrition and build resilience. In 2018, the WFP launched Building Blocks, a blockchain-based platform to improve the efficiency and transparency of its supply chain.

Building Blocks uses a distributed ledger to track transactions and provide donors with transparency on the flow of funds. The platform also uses biometric technology to ensure the right people receive assistance. By using blockchain technology, the WFP has been able to reduce costs, increase efficiency, and provide donors with greater transparency and accountability.


Blockchain technology can potentially revolutionize the charity sector by increasing transparency, accountability, and efficiency. By using a decentralized ledger to record transactions, charities can provide donors with greater visibility into how their donations are being used. Smart contracts can ensure that funds are used for their intended purpose, while automation can reduce administrative costs. The UN World Food Programme’s Building Blocks platform is just one example of how blockchain technology can benefit charities and donors.

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