Crypto altruism: Applying blockchain to charitable and humanitarian activities

Abstract

Charities and humanitarian organizations have come under closer scrutiny over recent years. Highly publicized financial scandals, together with criticisms concerning the cost, effectiveness, and underlying motivations of certain charitable and humanitarian activities, appear to have corroded public trust. Can recent innovations in blockchain assist in improving nonprofit effectiveness and, through it, trust amongst donors, beneficiaries, and broader communities? This paper deploys a “cost of trust” framework to assess blockchain potential in reinforcing trust in charitable and humanitarian operations. Blockchain has been touted by its advocates as a potential solution for charities to reduce the cost of trust, by: (i) enabling observable funding flows; (ii) enforcing conditions regarding funding disbursement and use; and (iii) facilitating direct giving. Despite a growing number of use cases, limitations of this technology in reducing the cost of trust are also recognized in respect of complex relationships between donating and trust perceptions in heterogeneous environments.