Token-Based Incentive Models for Transparent NGO Fund Transfers Using Blockchain Escrow Protocols

Abstract

Non-governmental organizations (NGOs) continue to encounter increasing pressure from donors,
regulators, and civil society to establish transparent, tamper-resistant, and verifiable mechanisms for fund utilization.
Traditional donation tracking systems rely heavily on centralized intermediaries, making them vulnerable to
mismanagement, corruption, delayed reporting, and opaque fund trails. This paper proposes a token-based incentive
model combined with a blockchain-driven escrow protocol to ensure transparent fund transfers and milestone-based
disbursement for NGOs. The architecture leverages smart contracts to automate fund release when predefined
project criteria are met, eliminating subjective decision-making and unauthorized withdrawals. A tokenized reward
layer is introduced to enhance stakeholder trust by providing donors, auditors, and field officers with verifiable
proofs of contribution, validation, and on-ground progress. A humanitarian aid distribution simulation was
conducted to evaluate system performance in terms of transparency, transaction integrity, delay reduction, and fraud
prevention. Results demonstrate significant improvement in donor confidence, traceability, and accountability
compared to traditional fund flow systems. The proposed model provides a scalable, secure, and auditable
framework that can be adopted by global NGOs, philanthropic institutions, and social impact organizations to
strengthen trust and improve governance in aid disbursement ecosystems.