Can digital currency reduce the abuse of charitable donations?

The misuse of charity funds is a serious problem all over the world. What's worse, only 5% of the donations can reach those in need. Can digital currency improve this ratio and help the donations reach the right people? Digital currency and blockchain technology have some advantages in helping donations flow to the right places.

Widespread acceptance of digital currencies by nonprofits can provide transparency and certainty that cannot be matched by traditional currencies and financial services. Because all transfers are recorded on the publicly visible blockchain of digital currencies, any individual can monitor the financial activities of nonprofits. With this transparency, it is difficult for an organization to deceive donors into transferring funds to another place, as long as both parties use only digital currencies.

The misuse of donations by non-profit organizations is a very serious problem, which has a great impact on those who need help. According to a survey report by TampaBay, the 50 worst charities in the United States spent $935.6 million in 10 years, and only more than $40 million went to the recipients . The money that went to the recipients only accounted for 5% of the donations. What's worse is that these charities often use the good reputation of other groups to raise funds, such as veterans, firefighters, police, etc. At the same time, they also gain benefits from other organizations, such as women and children, and major disease and disability organizations.

In 2014, Americans donated $358.38 billion to charity (2% of the country's GDP). With such a large amount of donations, it is time to seek a more efficient, transparent, clear and low-cost management method. If a simple way is found for donors to track where their donations go, it will encourage more charitable enthusiasm.

If more charities accept digital currencies, they will provide donors with a higher level of transparency and certainty. Because all digital currency transfers will be recorded on the blockchain. Donors can use blockchain browsers to track where their donations go. Some charities have already begun to accept Bitcoin, which is currently the most popular digital currency. But most charities are only testing the potential of digital currencies, avoiding volatility, and some choose to convert directly into legal currency. All this will change when the public begins to accept digital currencies and charities begin to use digital currencies to pay some expenses.

The more aboveboard charities will jump at the chance to prove themselves publicly, prove the numbers they help, and show their donors the impact of their donations. Their shady counterparts, profiting from the disasters of others, will continue to use fiat currency, which is equivalent to openly conducting their dirty business, and their business will surely get worse.