How Decentralized Autonomous Organizations Optimize Charitable Giving

Abstract

Charitable giving in legacy systems is subject to several major downsides that can be addressed with decentralized autonomous organizations (DAOs). Centralized legacy charitable organizations often lack foundational transparency and are subject to significant power imbalances that favor the donor and lead to centralization of the charity. Existing legal incentives often lead to so-called Zombie Charities in many jurisdictions. The donative intent can therefore often not be optimally fulfilled. DAOs combine unique feedback loops and transparency features with community governance that address the existing shortcomings of charitable organizations in decentralized structures.