The Sigmoid Curve and the Imperative for Charities and Non-Profits to Embrace Blockchain Technologies

Sigmoid curve banner

Charles Handy, the renowned management philosopher and well-known for the ‘Sigmoid Curve’ principle, once said,

“The key to future success is to have the foresight and discipline to see the opportunities in what you are doing in the present cycle and then to make your moves while things are going well. If you act too late, you may be in the downward curve and not able to turn things around.” (Handy, 1994)

The sigmoid curve:

Also known as the S-curve, this is a mathematical concept that models the natural growth and decline of various phenomena, including industries, businesses, and technologies. 

This curve is characterized by its distinctive ‘S’ shape, which represents three distinct phases: the initial growth phase, the maturity phase, and the decline phase.

Sigmoid curve diagram

In the initial growth phase, often taking years on the timeframe, an organization or technology experiences rapid growth, with innovation and adaptation being the key drivers. 

As the curve progresses into the maturity phase, the rate of growth slows down, and the organization or technology becomes more stable and established. However, without proactive measures to sustain growth and innovation, the curve eventually enters the decline phase. 

In this stage, the organization or technology faces stagnation or obsolescence, ultimately leading to a loss of relevance and diminishing returns.

Making organizational changes:

Understanding the sigmoid curve principle is crucial for organizations, including charities and non-profits, as it highlights the importance of anticipating and adapting to change. By recognizing their position on the curve and proactively investing in new technologies or strategies, organizations can maintain their relevance and ensure long-term sustainability. For us, the sigmoid curve principle serves as a reminder for charities and non-profits to adopt blockchain technology while they are still in the growth or maturity phases, thereby securing their future success.

Making change during the maturity phase (the red dotted line on the diagram below) is of paramount importance because it provides organizations with the necessary resources, stability, and momentum to adapt and innovate effectively and enables them to achieve greater success sooner and with more impact. In this phase, organizations have already established their presence and developed a solid foundation, which allows them to focus on improvements and explore new opportunities without the risk of jeopardizing their core operations.

Note that in the sigmoid curve theory, there is usually a period of potential conflict and confusion after the change. It is where the errors get sorted out, new patterns of working are sorted out, and new learning takes place. But it is overcome. You can see the organization moves to a new, higher sigmoid curve pattern. More growth, more success.

Sigmoid curve diagram showing change

Conversely, attempting to make significant changes during the decline phase (the blue dotted line), can be considerably more challenging and less effective. It’s not impossible of course, but at this stage, organizations are already grappling with diminishing returns, waning relevance, and potential obsolescence, which can hinder their ability to invest in new technologies or strategies. 

Additionally, the decline phase often sees a decrease in morale, making it harder to rally the support needed to embrace and implement change. The phase where worry and uncertainty happens, is that much harder to overcome. Again, it isn’t impossible to change at this point. Just harder. 

By taking proactive measures during the maturity phase, organizations can avoid the pitfalls of the decline phase and ensure a smoother transition to the next phase of growth, thereby maintaining their long-term viability.

Waiting too long could result in organizations falling behind the curve and losing the ability to adapt and grow. Blockchain technology has already demonstrated immense potential in transforming various industries, and the philanthropic sector must recognize the importance of integrating it sooner rather than later.

Applying the Sigmoid Curve theory to charities and blockchain:

The question, then, is not whether charities and non-profits SHOULD embrace blockchain technology but WHEN to make the leap.

Here at Angel Giving, as a decentralized platform that leverages blockchain technology, we facilitate direct donations from donors to beneficiaries. By using smart contracts and a transparent ledger, the platform ensures that donations reach their intended recipients without the need for intermediaries, thereby reducing overhead costs and increasing the impact of each donation. It really is better.giving !

Additionally, blockchain technology’s inherent transparency seen in Angel Giving fosters trust among donors, as they can track and verify the allocation of their funds. As a result, charities and non-profits can expect to witness increased donor engagement and overall contributions. 

Blockchain technology also enables organizations to tokenize their assets, or benefit from others who have tokenized assets (see this article about a recent Angel Giving fundraising event using NFTs) creating new fundraising opportunities and paving the way for innovative impact investment models.

Embracing blockchain technology now, while the sector is still in the growth phase, allows charities and non-profits to build a strong foundation for future success. However, the key to reaping the maximum benefit of blockchain technology lies in the foresight and discipline to invest in it during that growth phase of the sigmoid curve.

The sigmoid curve principle serves as a timely reminder for charities and non-profits to recognize and capitalize on the opportunities presented by blockchain technology. By doing so, they can ensure long-term sustainability, improve transparency, reduce costs, and foster trust among donors, ultimately enhancing their ability to make a meaningful impact in the world.

Better.Giving – It’s never too soon to start

References:

Handy, C. (1994). The Empty Raincoat: Making Sense of the Future. Hutchinson.