This document discusses how blockchain technology could be used to enable social impact and benefit charities. It describes how blockchain allows for decentralization and transparency through a distributed public ledger. It then outlines several potential applications of blockchain for charities, including using cryptocurrency for donations, improving financial transparency of donations, creating new digital assets like charity tokens, and reducing intermediaries. The document also discusses how blockchain could help record, measure, and incentivize social impact through mechanisms like smart contracts and prediction markets.

1. 1
Blockchain & Social Impact
Rhodri Davies
Head of Policy & Programme Director, Giving Thought

2. What are blockchain &
cryptocurrency?
2
Distributed public ledger: record of transactions and ownership
within a system, without the need for traditional trusted 3rd party
NB: ≠
Cryptocurrency is the best-known use case of blockchain so far,
but there are potentially far wider applications

3. What does blockchain enable?
3
Decentralisation & Disintermediation
Radical transparency
Assets and value of all kinds can be recorded
Smart contracts
Transforming governance

4. How could it be relevant to
charities?
4
Cryptocurrency Blockchain
• Crypto-mining for
charity
• Crypto-philanthropy
Financial
• Radical donation
transparency
• New Digital Assets
• Charity crypto-
tokens & ICOs
• Disintermediation
Non-Financial
• Asset tracking &
provenance
• Digital Identity
• Social Purpose
DAOs
• Social Impact

5. Civil Society Blockchain so far
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6. Blockchains & Social Impact
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Creating Measuring
Recording
IncentivisingPredicting? Transacting

7. Creating Social Impact: Civil Society
Blockchain Possibilities (part 1)
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1) Disintermediation
• Reduced transaction
costs
• Direct cash transfers
at scale
• Increased trust?
2) Radical Transparency
• Ability to track donations
at all points
• Increased trust?
• Challenges in terms of
core costs etc.
• What about justified
donor/beneficiary
anonymity?
3) All Kinds of Assets
• Any existing asset
can be recorded on
blockchain- tangible
or intangible
• Entirely new digital
assets can be
created- e.g. tokens

8. Creating Social Impact: Civil Society
Blockchain Possibilities (part 2)
8
6) Real-time
financial info
• Immutable shared
ledger of transactions
• No need for separate
reporting regime
• No need for audit?
4) Smart Contracts
• Self-executing computer
protocols that perform
defined functions when
set criteria are met
• Wide range of
applications e.g.
automated Payment by
Results, algorithmic
regulation
5) New governance models
• Distributed Autonomous
Organisations (DAOs)- networks of
individuals able to coordinate at
scale without centralisation by
using smart contracts etc.
• Challenge to traditional charitable
organisations?

9. Measuring Social Impact
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 Blockchains are not themselves measurement tools, so they won’t automatically
solve existing challenges with measuring social impact
 In the short term, we will still need:
Agreed frameworks
(goals &metrics).
‘Oracles’
Authoritative individuals/organisations who verify
info on a blockchain
But there may be other possibilities in the future…

10. Recording Impact
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NB: Assuming we have a way to measure impact, what is the benefit
of using a blockchain to record it?
 ‘Social Impact Data Commons’: break data siloes
to drive innovation
 Shared record: can be updated by multiple
parties without central oversight or separate
reconciliation process
 Highly secure: immutable, distributed ledger
so no central point of attack
 Universality: social impact data recorded on same ledger as financial data etc., opens
up wide range of possibilities in terms of transactions/incentives

11. Direct Social Impact Recording:
Internet of Things
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 Gartner predicts there will be 20bn IoT devices by 2020
 Many experts believe blockchain tech will provide
infrastructure for data collection and transaction
 Some data could provide proxies for social impact and
outcomes (e.g. health data, environmental data, data on from
smart homes).

12. Digression: IoT, The M2M economy &
Philgorithms
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 One upshot of IoT development will be emergence of a Machine-to-Machine
(M2M) economy made up of vast numbers of very small transactions.
 Can we harness some for social good?
 Impossible to do through direct human
oversight, so will need to be automated.
 Hence AI philanthropy and philgorithms (algorithmic
process of matching need with interventions based on
analysis of social data and impact data)
 Will put a much stronger emphasis on impact measurement

13. Like this…
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14. Transacting in social value
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 Once impact data is recorded on a blockchain, it can be used as the
basis for transactions
 Cryptographic tokens can be created to
represent value of any kind (financial, non-
financial, physical, intangible) – including
social impact
 Tokens could combine different elements of
value recorded on same underlying ledger to
create blended assets or currencies
 Already efforts to do this for e.g. charitable
giving, SDGs, environment etc.
But this isn’t all you can do with tokens…

15. Token Incentives & Social Impact
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 Crypto tokens can be used as the basis for reward systems designed to incentivise
many different things when it comes to social impact, e.g:
NB: Theory of creating incentives is called “Mechanism Design” – essentially the inverse
of Game Theory, and won its creators the Nobel Prize for Economics…
Production
• Users rewarded directly
for producing
measurable impact
• Token likely to function
as currency (closed or
exchangeable)
Measurement & Reporting
• Users rewarded for
accurate measurement and
trustworthy reporting of
impact (similar to projects
aimed at combatting fake
news etc.)
• Token may have financial
value, or function merely as
marker of reputation
Prediction
• Users rewarded for success
in predicting which
interventions will deliver
best outcomes/highest
impact
• Already a number of
blockchain-based prediction
market platforms (Augur,
Gnosis etc.)

16. Prediction markets for social impact
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 Basic idea: create a marketplace around a token which rewards those who
successfully identify the best interventions and approaches to deliver impact
 Benefits of using a blockchain: decentralised
(i.e. you don’t need a “bookie”) and payments
can be automated using smart contracts
i.e. “Bet on your theory of change”
 Potentially democratising: would be open to
organisations from all sectors, as well as
individuals
 Over time, participants would develop track records. Those who prove to be
good at predicting social impact will attract more funding.

17. Where to find more
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CAF Giving Thought think tank and Future:Good project
Giving Thought Podcast: http://givingthought.libsyn.com/
@Rhodri_H_Davies

18. Rhodri Davies
Head of Policy & Programme Director, Giving Thought
Charities Aid Foundation
rdavies@cafonline.org