Alibaba's introduction of tamper-proof Blockchain technology to improve accountability in the Chinese charity industry will boost the trend, particularly among other organizations.

The Xinhua News Agency reported that Chinese philanthropy rose 10-fold to $15 billion in the decade through 2014. This has been marred with several cases of scandals hence this move by Alibaba, the world’s most popular in e-commerce market, controlled by Chinese billionaire Jack Ma.

Ant Financial, the affiliate of Alibaba Group Holding Ltd, is handling the new initiative aimed at tackling misuse of funds and to gain public trust. It has began a ledger to record donations made by its more than 400 million users of Alipay, the online payments and investment service. Donors will be able to track transaction histories, know where their funds go and how they’re used.

The project kicks off via a tie-up with the China Social Assistance Foundation. The initial project is using a private Blockchain which only Ant Financial currently has access to. Ant Financial joins companies including Citigroup Inc and JPMorgan Chase & Co which are now experimenting with Blockchain.

Why Blockchain for charity

The Blockchain provides a record of all transactions and a way of determining who owns what at any given time. In the philanthropic context, it provides donors with a new way of giving and allows charities a new fundraising channel.

According to Charity Aid Foundation, a lot of the interest in the Blockchain revolves around a handful of themes related to its features which mainly include transparency and openness. It also reduces transaction costs and increases trust both in the donors and in the system which powers the industry.

Some of the ways in which the technology could impact the charity industry is by providing new ways for donors to give and new ways of addressing social problems by changing how charities operate. It is also expected to lead to new issues for charities to address.