ClearGive: A governance-driven blockchain framework for enhancing transparency, auditability, and regulatory compliance in digital philanthropy

This paper discusses some of the recurring problems in digital philanthropy, such as low levels of transparency, low auditability, and inconsistent regulatory compliance. Current donation systems – centralized and blockchain-based – do not provide a good balance of privacy of the donors, compliance factors, and verifiable audit trails. To address these drawbacks, the paper introduces a permissioned blockchain-based governance system, called ClearGive, created to increase accountability in charitable ecosystems. ClearGive uses four main control mechanisms namely: (i) anomaly detection to detect potentially fraudulent transactions, (ii) cryptographic pseudonymization to protect the identity of donors, (iii) deterministic policy engine to make sure that the regulations are followed like the FCRA 2010 and the IT Act 2000, and (iv) multi-tier verification system, which involves attestation by independent auditors. In terms of governance, the structure supports validation of compliance in real-time, audit trails that are immutable, and transparent reporting. Its architecture enables it to manage high transaction throughput and low latency, and this is appropriate in a resource-constrained environment of nonprofit. The results indicate that compliance and audit controls embedded in blockchain systems can greatly improve the level of trust, decrease the risk of fraud, and the level of adherence to regulations. The piece offers a practical guideline to policymakers, auditors, and nonprofit organizations on how to enhance governance in digital donation systems.