The potential of blockchain has many Australian charities excited, but a not-for-profit leader says a lack of understanding about how to best use the technology is holding charities back.
Save the Children CEO Paul Ronalds spoke to Pro Bono News following a panel discussion on the potential impact of blockchain on the charity sector.
Ronalds said there was “real potential in the technology” for organisations like Save the Children, as it faced increased pressure to be more efficient with managing cash donations in a “low trust” and unstable environment.
But he said one of the main messages that came out of the panel talk was how the charity sector’s use of blockchain was in “its absolute infancy”, and more discussion and research was needed before its potential “was overhyped”.
“We are getting a better understanding and appreciation for it, but we are still some way from realising that potential and we’re going to have to continue to engage in events, and detailed research around the potential of blockchain,” Ronalds said.
One of the key barriers charities faced, Ronalds believed, was that when it came to blockchain – a method of storing data where transactions are recorded and confirmed anonymously – there was a lack of understanding among sector leaders about how to best use it.
“Some of the leaders and some of the board members of charities are perhaps not as data savvy as they need to be,” he said.
“We need to make sure that people leading charities are similarly engaged in understanding the digital world and how it’s moving and how technologies like blockchain can help their organisations,” he said.
He said charities often fell into the trap of not keeping up with changing systems and processes that made it hard for them to “be able to readily keep up with new technologies”, especially if they were a smaller group with other pressing matters to deal with.
Advocates believe blockchain technology can make charities more transparent, by making fundraising more efficient, and moving records and data to the public domain.
RMIT Blockchain Innovation researcher, Mikayla Novak, told Pro Bono News she was confident smaller charities who may not have the capacity to keep up with fast changing technology would not be locked out of the market.
“There is always a possibility within the blockchain sector to actually have an industry of brokerage and assistance where small charities can actually receive assistance,” Novak said.
Ronalds added that smaller charities “needed to be strategic”, by finding a technology partner or larger charity group that had the capacity to help them.
“There were many technology firms at this conference that were really interested in how blockchain might be applicable to social purposes,” he said.
“There are also groups like Save the Children that perhaps have a more mature IT capability… it’s definitely not insurmountable.”
While the technology has a way to go yet, Ronalds said the fact leading organisations in the sector had success with their pilot programs was promising.
“We saw in one of our pilot programs, the transaction costs associated with transferring funds being reduced by between 95 and 98 per cent ,which means more money goes into the ultimate beneficiaries’ pockets,” he said.
“I would encourage other, smaller organisations to make sure they are at least keeping abreast of these developments, even if they’re not piloting themselves, because there is a lot of potential.”