All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.
The blood shed from a human being is impure and cannot be used in medication or research except for a necessity or a dire need. In cases where usage of blood is permissible, there will be no harm whether the benefited person is a Muslim or a non-Muslim so long as the purpose is lawful. For further information see Fataawa 83172 and 87533. Therefore, it is permissible for you to donate blood as long as you know for sure or predominantly think that the blood will not be used in impermissible matters.
On the other hand, using blood in manufacturing medicine is permissible when the blood changes into a substance which is completely different from the original impure substance. Such a change makes the blood pure according to the opinion of a group of scholars and it is the opinion approved by Shaykh-ul-Islam Ibn Taymiyyah .
As for blood donation, it is not obligatory; a person has the right to refuse to donate blood unless donation becomes a must on him. For instance, if he is the only one available and someone’s life depends on donating blood; in this case, it is obligatory on him to donate blood on condition that there will be no harm on his own health.
Further, when the donor is given a gift to encourage him (to donate blood) without it being the reason for his donation or without taking it in return for the blood donated, we hope that it is permissible – Allaah Willing. It is also permissible for him to donate this gift for the benefit of cancer children or any other lawful field.
Allaah Knows best.