Recently, we were shocked by news from a national magazine that reported the existence of a philanthropic organisation that allegedly used people's funds that were used inappropriately.
Of course this is unfortunate considering that the donor's good intention is to help people who deserve to be helped, but according to the news, the funds collected by the Islamic social institution are used for things that are beyond that.
This article will not try to add to the analysis of what has happened because the national magazine is sufficient in its analysis for us and it is not appropriate for us to then expose the disgrace of a party.
Social institutions certainly receive funds from donors (party 1) and distribute them to the rightful (party 2). The difference in banking is that banks manage depositor funds (party 1) and lend to those who need funds (party 2). Banks operate and are accountable to depositors. If the bank does not perform well, the depositors will punish it in the form of taking all their funds and depositing them in other banks.
Because banks are institutions of trust, the central bank regulates them very complexly and strictly with the aim that the economy runs well and of course depositors are satisfied so that they do not withdraw their funds from banks.
In terms of accountability, is the accountability of funds received the same between social institutions and banks. Of course not. Banks are responsible to depositors, in the case of social institutions, when someone donates, generally the donor will not check where the funds have been donated.
Then who is the social institution accountable to? The answer is to Allah. Because the funds belong to the ummah.
The next simple question is why banks that are only accountable to humans (depositors) are regulated with very strict and complex regulations but social institutions that must be accountable to Allah are regulated with regulations that are not as complex as banks?
This is not a new occurrence but there has never been a regulation within a social institution with a higher complexity than bank regulations. This should be of concern to all of us.
The incident of philanthropic institutions in the national magazine is quite a lesson for all of us. This paper tries to propose what improvements we should make in the future.
The author believes that in the context of transparency of social institutions, annual reports must be audited. And by getting an unqualified status (WTP), the public will generally already trust it. But is the issue of trust sufficient only with the WTP status above. We know that institutions such as Arthur andersen, which have a very strong name as the world's public accounting firm, were also in trouble with Enron around the early 2000s. This means that auditor institutions are still committing fraud in their audit operations.
Therefore, we need to think of other ways to increase transparency and precision, namely with the help of technology. Then how can technology increase transparency? The answer is with blockchain technology.
This technology will convert the value of our donation money into an encryption code that is impossible for others to know so that it is guaranteed security, but still provides information to donors about the encrypted donation journey.
For example, if a wakif (waqf donor) wants to donate money to a nazhir (waqf manager) to buy a sewing machine for a tailor woman. Then the waqif will be able to check whether the donated funds have reached the shop selling the sewing machine and not the family account of the manager of the social institution.
If the search shows that the donated funds reached the sewing machine seller's shop, then it will be in accordance with the wishes of the wakif, namely for the tailor's mother so that transparency will be maintained. And the waqif can also take issue if the trace shows that the waqif funds actually reach the manager's account wife. Of course, the reputation of the social institution will fall.
This illustration is similar to when we send goods to another area and we receive a tracking number. For example, we send goods from Surabaya to Jakarta by air. Then we can check whether it has reached the airport in Surabaya or has even arrived at the destination.
If this blockchain is adopted, the management institution will have very little or no room to commit fraud.
In closing, the recommendations for the above paper are first, regulators of social institutions are expected to start implementing technology as part of the policy to ensure that social funds are safe and reach the expected destination.
Secondly, social institutions are also expected to adopt this technology without waiting for regulations from regulators. This is to convince donors of the institution.
Third, there may not be many experts in the blockchain field compared to the needs. Therefore, educational institutions are expected to include this technology in the curriculum. Keep in mind that this technology is not only for social institutions but for all companies to avoid fraud.
Disclaimer:
- Source: Republika.id (published 7 July 2022, with the title "Blockchain dan Transparansi Filantropi")
- The views of the author do not necessarily represent the views of the Institution
