Is Blockchain the Future of Philanthropy?




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Nov 09, 2018
by Anna Rawe
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Is Blockchain the Future of Philanthropy?

Salzburg Global Fellow Lina Lim discusses how blockchain can be used in the philanthropy sector to transform systems Lina Lim at Salzburg Global Seminar

In a world where terms such as block chain and bit-coin increasingly appear in our media, our businesses, and our culture, the time to understand its potential for the philanthropic sector has arrived. This is the view of Lina Lim who works as the director of impact investment at the Blockchain Philanthropy Foundation.

The Foundation was founded last year to research and collaborate on the ways to use blockchain to improve the philanthropic sector’s capabilities and service delivery. The Foundation also looks at how blockchain can help charities access funding and is currently partnering with Melbourne’s La Trobe University to develop a platform for digital currency donations.

Of blockchain’s potential, Lim says, “Everyone says technology is a tool, [and] I agree. However, blockchain can add more value beyond just being a tool of technology… it open[s] up opportunities of new ways of process[ing].”

Blockchain was initially developed to support bitcoin. Lim, however, is more interested in using this new technology to empower people who are left out of the financial system. Lim’s passion for financial inclusion involves helping the estimated 1.7 billion people who, according to the World Bank, are unbanked. This lack of a paper trail and reliance on cash makes it harder for them to have access to financial institutions and services like bank accounts and credit.

Lim says, “Blockchain has been very powerful in opening up that opportunity… the bank will say, ‘We don’t have any record of you’ but with the blockchain, we can create this community-based information… they can start building their information and profile into the blockchain.

“[Then] the bank can come into the ecosystem so they will be able to access the same information transaction, so with that, it’s opening up for that particular individual… to build an identity transaction… with that, they can later go to the bank [who will see] ‘Ok, there is that history of information.'”

Other uses of blockchain are for those working overseas to be able to send remittances back to their families a lot faster, or for donors to track where their donations are being used. Lim says, “It brings a lot of applications [for both philanthropic and business institutions] starting from building better efficiency, automation, reducing costs… and increasing the trust component.”

Trust may become one of blockchain’s most valuable characteristics, particularly in an age where hacking scandals have rocked several companies and a lack of faith in governments and corporations continues to simmer. The fact that blockchain can make information “tamper proof” or “immutable” means that once data is entered into the chain, it can’t be changed.

This immutability is also down to what Lim describes as the difference between “the current database model… [where information] just stays in one place, but with blockchain it allows the data to be shared amongst the other participants, or what we call nodes.” The lack of a centralized set of information may help people to trust NGOs to collect and use their data.

While Lim’s foundation is still new and running on the enthusiasm of volunteers, she suggests blockchain is an area that needs further development and has the potential to become an integral part of the philanthropy sector, especially in its ability to foster collaboration.

She says, “It’s kind of like the Internet when it first came, and everyone’s not sure ‘What is that?’ But then there is more adoption, and it becomes more familiar… in this sector, we look to solve common issues… we do similar projects everywhere so why can’t we have an infrastructure and storage of data then we can actually then share all of this?

“Blockchain is a network, and it requires collaboration… it can bring together the ecosystem, [the service providers and the communities that benefit from this impact] we can actually build that within this technology.”

The session New Horizons in Social Investment: Global Exchange for Action and Impact is part of Salzburg Global Seminar's multi-year series Philanthropy and Social Investment. This year’s session is held in partnership with the Asian Venture Philanthropy Network, a network committed to building a vibrant and high impact social investment community across Asia. To keep up to date with the conversations taking place during the session, follow #SGSphil on Twitter and Instagram.