The benefits of applying the distributed ledger technology to the non-profit sectorare numerous as highlighted above. Donors will have more trust in the sector and,consequently, will be more willing to donate.To stimulate transparency and traceability in the non-profit sector, we have devisedAidCoin, an ERC20 token that aims to become the preferred method to donatetransparently through the Ethereum blockchain and to access the AIDChainplatform. The adoption of cryptocurrencies will impact the way we donate in thefuture and AidCoin is poised to play a leading role in this new era of fundraising.
Distributed Ledger Technology (DLT), or blockchain technology provides a sharedledger which is immutable and allows for full transparency. Records on the blockchaincannot be erased, so when used for cryptocurrency, blockchain technologyprovides traceable accountability showing the exact flow of any coin in the ecosystem.This tamper resistant system has clear use in the non-profit area: whensomeone donates a token, they can see exactly how it was used throughout itslifecycle.The following are the types of transparency that can be designed for charitableorganizations:• Tracking the actual use of funds, from the time money is donated up until itsconversion into local fiat currencies.
• Verification of the identity of the recipients and reporting on the blockchainof their funds use.• Tracking of administrative costs of nonprofits.• Ensuring money earmarked for specific projects actually gets to those specificprojects.• Comparison of the effectiveness of a euro spent in one charity versus a differentcharity.• Tracking of the investment policies of charities with the money they hold.• Reduction in transaction costs of money transfer through cryptocurrency ratherthan financial intermediaries.
This becomes especially relevant whendealing with organization that operate in developing countries, where transferfees for remittances can be as high as 20%3