Frauds in charity organizations, such as pocketing donations and setting inordinate costs for infrastructure and administration, point to the fact that the donor community may have a severe fundamental issue regarding trust in the ultimate application of their donations. This is a deeply seated problem, which breeds mistrust in such organizations and therefore requires well-thought-out actions to restore fundamental trust, hence increasing donations.
This five-vignette study presented respondents with different characteristics of blockchain technology, using a within-subjects design to give respondents exposure to scenarios about transparency, immutability, decentralization, and security functionalities of the blockchain. The study aims to determine whether blockchain can function as a technology for trust enhancement to motivate donors and increase donations.
To examine the impact of decentralization and distributed ledger technology (DLT) on donor trust and donation behavior.
To investigate how transparency and immutability influence donor perceptions of trustworthiness and security.
To assess the effectiveness of consensus mechanisms and security features in enhancing donor confidence.
To explore the role of smart contracts and pseudonymity in ensuring transparency and protecting donor privacy.
Figure 1: Blockchain Charity Model
The "Blockchain Charity Model" describes a simple and transparent donation process using blockchain technology. Donors donate through an app connected to a digital wallet (DAPP), such that these donations are recorded on the blockchain and cannot be tampered with. The provided information and donations are then channeled to the intended beneficiaries, such as schools, from a donation fund where the donated money is placed.
Schools have easy access to the resources to be used by the beneficiaries, such as children, who can confirm their access using technologies such as NFC tags or biometric identification. This model reveals characteristics highlighting the key attributes of blockchain: transparency, immutability, and security—features that ascertain the correct use of donations and create trust toward other donors.
This factorial survey was conducted using SoSci Survey, with each session taking approximately 10-15 minutes. We recruited 500 participants via panel provider, with participants receiving €1.75 compensation.
Basic charity organization providing transparency and regular reports without advanced technological features.
Data stored across multiple computers instead of central location, increasing security and reliability.
All transactions visible and recorded in public ledger; once recorded, transactions cannot be changed.
Special methods ensure all network computers agree on transaction validity, with digital signatures protection.
Digital agreements automatically execute when conditions are met; users can transact pseudonymously.
Theory: Common-pool resource management - decentralization minimizes centralized corruption and ensures no single point of failure.
Theory: Principal-agent theory - immutability resolves issues of hidden actions and improves trust through clear records.
Theory: Mutual agreement - collective decision-making builds fairness and verified transactions reduce fraudulent risks.
Theory: Contract theory - smart contracts ensure compliance with predefined conditions while balancing privacy with trust-building.
Transparency: High, but no built-in tracking for fund usage
Transaction Costs: High fees make micro-donations inefficient
Speed: Slow (10 min per block)
Transparency: Same as Bitcoin, but faster transactions
Transaction Costs: Very low fees, ideal for micro-donations
Speed: Instant transactions (<1 sec)
Transparency: Very high, smart contracts allow fund tracking
Transaction Costs: Lower fees (depending on network congestion)
Speed: Faster (12-15 sec per block)
The study operationalized trust through multiple dimensions: competence (platform capability), integrity (honesty and ethics), and benevolence (consideration of donor interests).
Trust game decisions measured hypothetical donations of 100 currency units across different blockchain feature scenarios to assess behavioral impact.
Results provide insights for charity organizations, technology developers, policymakers, and donors regarding blockchain adoption in philanthropic contexts.
Planned extensions include real donation behaviors, cross-cultural validation, and long-term impact assessment of blockchain philanthropy platforms.
Interested in discussing this research or potential collaborations?
Contact for Details