Among the many issues being raised in the course of the recent Wuhan coronavirus outbreak is the ability of charities to respond to crises and to fulfil their fiduciary and moral duty to apply donations effectively and for the purposes intended. In my recent article ‘A viral warning for change. The Wuhan coronavirus versus the Red Cross: better solutions via blockchain and artificial intelligence, available here, it is argued that the present crisis should be seen as a call to arms for the tech industry, which has the relevant know-how and resources to radically change the landscape of crisis response and the management of donations through the implementation and use of blockchain and artificial intelligence (AI), both of which are already in common commercial use.

The present problem

Beijing has ordered all public donations for the Wuhan crisis to be funnelled to five government-backed charity organisations. This is a throwback to pre-2016 China, before the Charity Law of China was introduced to enable the establishment of private charities. The Charity Law was intended to develop the charity field and protect the interests of relevant stakeholders. Although all charities in China are required to have in place sound internal governance structures, the funnelling order implicitly assumes that the five government-backed charities are fit for purpose and better able to manage the current crisis. That assumption may be at odds with historical and more recent evidence suggesting organizations responsible for responding to crises appear to struggle to manage their core responsibilities. And if Beijing’s implicit assumption is wrong then the centralizing effect produced by funnelling merely serves to compound the problem.

In this instance, and not for the first time, the Red Cross in China is in the crosshairs of public anger. One of the lessons learned was that emergency response must be better developed at the local level. This is what the Red Cross said in 2017 on the 10 year anniversary of the deadly Wenchuan earthquake in Sichuan province in western China. Billions of dollars had been donated following the Sichuan earthquake but had been mishandled. What has been learned? The public in China has again been angered by the mishandling of donations, and this impacts on the willingness to donate, which retards the objective of addressing a problem.

There is a better way

Blockchain and AI are now in frequent use by global tech companies and represent tools that can be used to better manage crisis situations. A private blockchain network would enable the recording and tracking of anything that is donated, from donation dollars to N95 masks. It also creates clear points at which it is possible to hold a person or organization to account, from the loading of donations for delivery through to its final end-use. Importantly, the blockchain can also be given public visibility, providing transparency to all stakeholders—donors and donees, as well as public oversight bodies. Anyone could track the progress and use of their donation.

When responding to crisis charities also face complex, data-dependent questions requiring expert judgements. Considerable amounts of data must be integrated that, insofar as infection data is concerned, is not only subject to rapid change but is inevitably out of date. The difficulty of the task is complicated by the need to decide where and when limited resources can most effectively be spent. This is the context where AI can be employed to assist humans to determine optimal outcomes. In a blockchain-based donations context, such outcomes would not only be driven by models developed by epidemiologists but also by the current and forecast supply and utilization of limited resources. AI can also provide visibility to the decision-making process, which is critical to restore public trust in the system and the ongoing flow of much needed donations.

These technologies are already in widespread usage, such as by the likes of Alibaba, SF Express and Apple—why not charities? In China, President Xi Jinping has said that opportunities presented by blockchain technology must be seized and has referred to Blockchain+ solutions that support basic needs such as, among other things, medicinal safety.

A call to arms

In the shorter term, the current crisis should serve as a call to arms for China’s tech industry to get engaged in finding a solution. There is no reason that this should not also extend to tech firms globally to collaborate at several levels, AI being one area where the desirability of a cooperative landscape is becoming increasingly apparent.

Over the medium to longer term, the solution in China may rest on the progress of a principle established by the Chinese government in 2013 that the market should be allowed to play a decisive role in the allocation of resources. Public-private and mixed ownership reforms in China testify to the reality that centrally controlled organisations, be it a state-owned enterprise or a government-backed charity, have not developed management systems or innovated solutions to problems at anything like the pace that private enterprise has.

The time to develop borderless solutions based on fit-for-purpose technologies is now. Let us not wait and find ourselves in the future again talking sentimentally about lessons that were learned.

Syren Johnstone is Executive Director of the Master in Laws (Compliance & Regulation) Programme at the University of Hong Kong.