SUMMARY
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Problems
The Growth of Online Fundraising: Challenges and Opportunities
The fundraising sector has become increasingly popular in recent years thanks to the ease of access to online platforms that allow nonprofit organizations and individuals to raise funds for important causes. However, despite the growth of the sector, there are still significant issues that need to be addressed.
Transparency in Fundraising: The Importance of Informing Donors
One of the main issues concerns the transparency and traceability of the funds raised. It is important that donors know exactly how their money will be used and that nonprofit organizations regularly publish detailed information on their finances and financial management. Additionally, it is important for fundraising platforms to adopt rigorous measures to ensure that the funds raised are actually used for the intended cause.
Transaction Cost: A Challenge for Online Fundraising
Another issue concerns the high cost of transactions. Fundraising platforms often charge high fees on donations made. This can discourage donors from making donations, particularly for smaller amounts. Additionally, the fees can have a significant impact on the amount of money that actually reaches the cause for which it was raised.
Cybersecurity: A Critical Factor for Online Fundraising
Platform security is another important issue. Donors’ and nonprofit organizations’ personal information may be vulnerable to cybersecurity breaches, and fundraising platforms must ensure the security of user information. Additionally, it is important for platforms to adopt measures to prevent potential fraud or abuse of the fundraising system.
Solutions
Blockchain technology: An effective solution for the fundraising sector
Blockchain technology is an effective solution to the problems faced by the fundraising sector. With the platform’s transparency, traceability, reduced transaction costs and security, greater trust can be built between donors and nonprofit organizations, making the fundraising sector more sustainable and reliable.
Transparency and traceability of transactions through blockchain technology
Blockchain technology ensures transparency and traceability of transactions, which can be securely and immutably recorded. This allows nonprofit organizations to openly and transparently publish information about their activities, and donors to verify where their funds have been allocated and how they have been used. This way, blockchain technology fosters trust between the parties involved.
Reduced transaction costs through blockchain technology
Furthermore, blockchain technology reduces transaction costs associated with fundraising platforms by eliminating the need for intermediaries, such as banks and money transfer companies, to process transactions. This means that transaction fees can be reduced or even eliminated, allowing donors to allocate a greater portion of their funds to the causes they wish to support. This advantage can attract more donations and improve the sustainability of the fundraising sector.
Security of fundraising platforms through blockchain technology
Blockchain technology ensures the security of transactions in fundraising platforms by using advanced encryption to protect user information and prevent fraud and system abuse. Thanks to this security, donors can feel more secure when making online donations, and nonprofit organizations can protect the personal data of their supporters. This improvement in security contributes to building greater trust between the parties involved and can enhance the reputation of the fundraising sector.
Case Studies

ALICE.SI
Alice.si is a fundraising platform that utilizes blockchain technology to make the donation process more transparent and secure. The platform allows donors to track the destination of their contributions transparently, and provides fundraising organizers with a secure and decentralized system to manage donor information and donations. Additionally, Alice.si uses a blockchain-based reputation system to evaluate the quality of non-profit organizations and improve donor trust.
HELPERBIT
Helperbit is a fundraising platform that utilizes blockchain technology to ensure donations’ transparency and security. The platform allows donors to track the destination of their contributions in real-time, and provides fundraising organizers with a tool to manage donations efficiently and transparently. Furthermore, Helperbit uses a blockchain-based smart contract system to automate donation verification processes and reduce costs associated with fundraising.
GIVETH
Giveth is a blockchain-based fundraising platform that offers a decentralized and transparent crowdfunding system. The platform allows donors to track the destination of their contributions in real-time, and provides fundraising organizers with a tool to manage donations collaboratively and transparently. Additionally, Giveth utilizes a blockchain-based smart contract system to automate fund distribution processes and improve fundraising efficiency.Advantages
Blockchain technology becomes relevant for philanthropy fundraising
Blockchain technology is becoming increasingly relevant in the philanthropy and charity fundraising sector. According to a report by Transparency Market Research, the global blockchain technology market for philanthropy and charity is expected to grow at a compound annual growth rate of 29.1% between 2018 and 2026, thanks to the increasing awareness and adoption of cryptocurrencies as a donation method.
Successful examples of blockchain-based fundraising
- One successful example is the American Red Cross fundraising campaign after Hurricane Harvey. In collaboration with BitGive, a blockchain technology company, the American Red Cross created a blockchain-based fundraising campaign to provide financial assistance to hurricane survivors. The campaign achieved its goal of $500,000 in just three weeks.
- Save the Children had a similar success in their 2019 fundraising campaign. By using blockchain technology to track donated funds and ensure they were exclusively allocated to those in need, the campaign raised over $1.4 million in just two months.
- A survey conducted by Fidelity Charitable revealed that 72% of donors would be willing to donate in cryptocurrencies if they understood their operation better and if there was a secure way to do so. This demonstrates that using blockchain technology as a means for fundraising has the potential to attract a large number of donors.
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