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The potential of blockchain technology for social good has become a hot topic for many philanthropists, social entrepreneurs and related non-profit organizations. The Blockchain for Social Impact Coalition (BSIC) with over 50 member organizations held a conference in June, and Ethereal
you know how, trust the words made by metallic typography on a dark jeans backgroundGetty
will sponsor another major conference in New York in May 2019. Participants share the view that the blockchain is inherently democratic due to the absence of centralized control, and with its timestamps, verification systems , the control trail and the tamper protection, the blockchain looks like a perfect for an arena that boasts of transparency and trust.
For organizations involved in doing good in developing countries, blockchain applications seem particularly attractive. Smart contracts to carry out projects of poverty alleviation from a moment to the "untrustworthy" parties left as NGOs and local governments, or between NGOs and aid agencies can be dealt with more quickly, at lower costs and eliminate mutual suspicions. Corruption, one of the main obstacles to development in many Third World countries, would be reduced "consensus governance." In the field of humanitarian aid, blockchain technology would be useful in helping cash to refugees and would eliminate the scams that often afflict the supply chain. The blockchain technology clearing and settlement functions could be applied to remittance transfers, now in hundreds of billions of dollars a year, thus eliminating brokers, reducing costs and increasing transaction speed.
But in some cases, especially the transactions between and the growing number of non-profits, subsidy contractors, VC companies and others who present themselves as workers for social and environmental impacts in the Third World, it may be worth asking the counter-intuitive question: is full transparency what do they really want? Is it desirable to have a system capable of generating a chain of custody for each item in the supply chain, where every moment in a contractual relationship is visible? Sometimes there are good reasons to hide some details involved in complex programs, from the provision of standard aid to the promotion of local businesses with a social impact. Pure transparency can also pose a risk to the reputation of an organization.
We are honest, the world of social welfare is highly competitive. The hundreds of NGOs and companies that operate in international development, for example, compete with each other for public recognition, quality personnel and, above all, for public money (government contracts or grants) and private risk capital, as well as donations from individuals, institutions religious, corporations or foundations. The people in those organizations want to be seen and known, their CEOs want to talk to the forums and everyone wants their organizations to be considered trustworthy. Making and selling widgets is one thing, but saving lives or helping to reduce poverty puts you on a higher moral level. In the social impact the image of the world is all about and fundraising (selling that image) is based on it. Blockchain applications could theoretically damage that image.
Imagine an NGO called Let & # 39; s Eradicate Poverty Together (LEPT), a $ 400 million organization with thousands of employees and projects in 48 developing countries. He won a grant from USAID (United States Agency for International Development) to develop and run a project in Malawi that will train and equip young unemployed people to form cooperatives to produce and market dairy products.
One of USAID's requirements is that the winning company agrees to participate in the blockchain technology. There will be several data streams for reporting, all in an authorized environment. Financial reports, personnel models, salaries, budgets, etc. Of LEPT will be included in the various blockchain reporting. Each transaction added to each chain will be stamped and cryptographically validated, including for example all phases of the recruitment of new staff for the project, as well as expenses and progress reports along the agreed schedule.
There are some obvious advantages in a blockchain approach for organizations such as LEPT. A typical USAID grant or contract must go through multiple checks before funds are released. There are representatives of the Officers of the Agreements (called AOR), legal and personal staff of the accounting offices who must check and sign the contract or grant agreement. This process often causes delays in implementation and nullifies many contractors and beneficiaries. Because the blockchain creates a "smart contract" in which trust is no longer a problem, it is not necessary for these multiple verifiers and things can be accelerated.
But the cons seem to be more important than the professionals here. Get the target population in the LEPT youth exchange, defined for ages 16 to 25. In the Malawi region, where jobs are carried out, young unemployed people move periodically between their villages and the city and some move permanently to the cities. Since in a sense they are moving targets, the recruitment of young people in the project proves to be more difficult than expected, but each person recruited is included in a block of the chain with their details and a timestamp. Within the first 3 months, 60% of these young people are no longer involved in the project and this is immediately visible. The field staff, in order to achieve recruitment goals, has started to recruit a considerable number of people aged over 30 and even some 40-year-olds. Because of the transparency of the blockchain, it is now clear that 58% of the project participants are not in the agreed age group, nor are they "youth" from any imaginative effort.
Or consider the "Capacity building." Budget line item. In the pre-blockchain accounting the management at the ground level would have been managed in a flexible way; Daily changes in local circumstances would require adjustments that could not be foreseen at the time of signing the project agreement. Now, for example, two locally hired employees suddenly need accommodation and three bikes initially purchased under the heading "outreach equipment" are irreparable and there is no money left in that budget. The project has no choice but to provide housing for the two local agents and buy three new motorcycles under the capacity production line.
Such reality-based adjustments were usually negotiated and forgotten informally, but now with blockchain, they stand out as red flags and USID officials have no discretion over how to handle them. In the interest of transparency, the blockchain has, as expected, created a unique, unassailable truth, a good thing in theory. But in reality the informal and often reasonable flexibility has been replaced by an unalterable rigidity.
In reality, most NGOs and companies working in projects like these (and the number of those working with USAID spend between $ 4 and $ 5 billion in the US each year) have to make a lot of compromises, both Practical adjustments such as those reported above and some "white lie" moral compromise as well. For example, the annual report of the LEPT used to make it a point of pride that $ 0.90 cents of every dollar donated goes directly to the beneficiaries of its projects. If LEPT were to create a public blockchain it would be impossible to diminish the fact that this cent of $ 0.90 includes the things that are needed to complete a project but that does not seem to be the case, such as accommodation for expatriate staff, trips to conferences where LEPT staff speaks with lenders about possible proposals, the costs of hiring consultants to write proposals, the travel costs of the LEPT CEO in each of its regions from two to three times. ; year to inspire staff and so on. Now it starts to look a lot less than $ 0.90 that comes to the recipient community.
Another element of image improvement in the pre-blockchain days of LEPT was to state that the work of LEPT in numerous projects around the world has had an impact on millions of poor people. But with the blockchain it is now easier to see that LEPT is actually a subcontractor with anywhere from two to six other companies in the same projects, and these other organizations make the same impact statements, often with the exact same numbers. This fairly common double count, in a sense an innocent part of managing impressions, is now completely visible.
Given the long-standing skepticism of public opinion over much of the foreign aid, some of which are based on misunderstanding about scope and purpose, perhaps there is something constructive to say about the way things were , in fact a sort of selective transparency. Both non-profit organizations and non-profit organizations claiming to be in the social impact arena have an interest in their reputation and public image. Blockchain, with all its tantalizing possibilities, could simply pull back the curtain a little farther than what some organizations want.
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The potential of blockchain technology for social good has become a hot topic for many philanthropists, social entrepreneurs and related non-profit organizations. The Blockchain for Social Impact Coalition (BSIC) with over 50 member organizations held a conference in June and Ethereal
you know how, trust the words made by metallic typography on a dark jeans backgroundGetty
will sponsor another major conference in New York in May 2019. Participants share the view that the blockchain is inherently democratic due to the absence of centralized control, and with its timestamps, verification systems , the control trail and the tamper protection, the blockchain looks like a perfect for an arena that boasts of transparency and trust.
For organizations involved in doing good in developing countries, blockchain applications seem particularly attractive. Smart contracts to implement poverty alleviation projects among "unreliable" parties such as NGOs and local governments, or between NGOs and humanitarian agencies can be dealt with more quickly, at lower costs and eliminate mutual suspicions. Corruption, one of the main obstacles to development in many Third World countries, would be reduced through "consensus governance". In the field of humanitarian aid, blockchain technology would be useful in helping cash to refugees and would eliminate the scams that often afflict the supply chain. The blockchain technology clearing and settlement functions could be applied to remittance transfers, now in hundreds of billions of dollars a year, thus eliminating brokers, reducing costs and increasing transaction speed.
But in some cases, especially the transactions between and the growing number of non-profits, subsidy contractors, VC companies and others who present themselves as workers for social and environmental impacts in the Third World, it may be worth asking the counter-intuitive question: is full transparency what do they really want? Is it desirable to have a system capable of generating a chain of custody for each item in the supply chain, where every moment in a contractual relationship is visible? Sometimes there are good reasons to hide some details involved in complex programs, from the provision of standard aid to the promotion of local businesses with a social impact. Pure transparency can also pose a risk to the reputation of an organization.
We are honest, the world of social welfare is highly competitive. The hundreds of NGOs and companies that operate in international development, for example, compete with each other for public recognition, quality personnel and, above all, for public money (government contracts or grants) and private risk capital, as well as donations from individuals, institutions religious, corporations or foundations. The people in those organizations want to be seen and known, their CEOs want to talk to the forums and everyone wants their organizations to be considered trustworthy. Making and selling widgets is one thing, but saving lives or helping to reduce poverty puts you on a higher moral level. In the social impact the image of the world is all about and fundraising (selling that image) is based on it. Blockchain applications could theoretically damage that image.
Imagine an NGO called Let & # 39; s Eradicate Poverty Together (LEPT), a $ 400 million organization with thousands of employees and projects in 48 developing countries. He won a grant from USAID (United States Agency for International Development) to develop and run a project in Malawi that will train and equip young unemployed people to form cooperatives to produce and market dairy products.
One of USAID's requirements is that the winning company agrees to participate in the blockchain technology. There will be several data streams for reporting, all in an authorized environment. Financial reports, personnel models, salaries, budgets, etc. Of LEPT will be included in the various blockchain reporting. Each transaction added to each chain will be stamped and cryptographically validated, including for example all phases of the recruitment of new staff for the project, as well as expenses and progress reports along the agreed schedule.
There are some obvious advantages in a blockchain approach for organizations such as LEPT. A typical USAID grant or contract must go through multiple checks before funds are released. There are representatives of the Officers of the Agreements (called AOR), legal and personal staff of the accounting offices who must check and sign the contract or grant agreement. This process often causes delays in implementation and nullifies many contractors and beneficiaries. Because the blockchain creates a "smart contract" in which trust is no longer a problem, it is not necessary for these multiple verifiers and things can be accelerated.
But the cons seem to be more important than the professionals here. Get the target population in the LEPT youth exchange, defined for ages 16 to 25. In the Malawi region, where jobs are carried out, young unemployed people move periodically between their villages and the city and some move permanently to the cities. Since in a sense they are moving targets, the recruitment of young people in the project proves to be more difficult than expected, but each person recruited is included in a block of the chain with their details and a timestamp. Within the first 3 months, 60% of these young people are no longer involved in the project and this is immediately visible. The field staff, in order to achieve recruitment goals, has started to recruit a considerable number of people aged over 30 and even some 40-year-olds. Because of the transparency of the blockchain, it is now clear that 58% of the project participants are not in the agreed age range, nor are they "young" with any imaginative effort.
Or consider the "Capacity building" line item. In the pre-blockchain accounting the management at the ground level would have been managed in a flexible way; Daily changes in local circumstances would require adjustments that could not be foreseen at the time of signing the project agreement. Now, for example, two locally hired employees suddenly need housing, and three bikes that were initially purchased under the heading "outreach equipment" are irreparable and there is no money left in that budget. The project has no choice but to provide housing for the two local agents and buy three new motorcycles under the capacity production line.
Such reality-based adjustments were usually negotiated and forgotten informally, but now with blockchain, they stand out as red flags and USID officials have no discretion over how to handle them. In the interest of transparency, the blockchain has, as expected, created a unique, unassailable truth, a good thing in theory. But in reality the informal and often reasonable flexibility has been replaced by an unalterable rigidity.
In reality, most NGOs and companies working in projects like these (and the number of those working with USAID spend between $ 4 and $ 5 billion annually in US government funds) have to make a lot of compromises, both practical adjustments such as those reported above and some "compromising moral" white-lie as well. For example, the annual report of the LEPT used to make it a point of pride that $ 0.90 cents of every dollar donated goes directly to the beneficiaries of its projects. If LEPT were to create a public blockchain it would be impossible to diminish the fact that this cent of $ 0.90 includes the things that are needed to complete a project but that does not seem to be the case, such as accommodation for expatriate staff, trips to conferences where LEPT staff speaks with lenders about possible proposals, the costs of hiring consultants to write proposals, the travel costs of the LEPT CEO in each of its regions from two to three times. ; year to inspire staff and so on. Now it starts to look a lot less than $ 0.90 that comes to the recipient community.
Another element of image improvement in the pre-blockchain days of LEPT was to state that the work of LEPT in numerous projects around the world has had an impact on millions of poor people. But with the blockchain it is now easier to see that LEPT is actually a subcontractor with anywhere from two to six other companies in the same projects, and these other organizations make the same impact statements, often with the exact same numbers. This fairly common double count, in a sense an innocent part of managing impressions, is now completely visible.
Given the long-standing skepticism of public opinion over much of the foreign aid, some of which are based on misunderstanding about scope and purpose, perhaps there is something constructive to say about the way things were , in fact a sort of selective transparency. Both non-profit organizations and non-profit organizations claiming to be in the social impact arena have an interest in their reputation and public image. Blockchain, with all its tantalizing possibilities, could simply pull back the curtain a little farther than what some organizations want.
