The advent of blockchain and cryptocurrencies has been a major event not only for those looking to seize an investment opportunity, but also for the non-profit world.
The potential that these innovations present for non-profits has not been slow to manifest itself, making it clear that they can be used as a fundraising tool.
There are several non-profit organizations that have already adopted this system. One of them is UNICEF, which in 2019 established its CryptoFund to accept donations in cryptocurrency.
According to a survey conducted by Fidelity Charitable, those who invest in cryptocurrencies would also be more likely to donate to nonprofits. In fact, according to the study, in 2020 about half of those who own cryptocurrencies donated money to charity (the amount would be, on average, around $1000), compared to 33% of the general investor population.
The popularity of cryptocurrencies has grown tremendously in recent years, creating a new form of wealth that can be distributed to charity more effectively and efficiently than traditional money.
In fact, in 2022, cryptocurrency experts predict a huge increase in crypto-philanthropy. For example, The Giving Block platform, which directs cryptocurrency donations to nonprofit organizations, expects to raise donations of $1 billion in value this year.
But what are the benefits of donating through the cryptocurrency and blockchain system?
In addition to contributing to a valuable project and making a positive impact on the world and people, there are several other reasons why a donor should consider a cryptocurrency donation.
Why donate in cryptocurrencies?
Transparency, security and efficiency
One of the key aspects of blockchain technology is transparency.
The blockchain works as a huge public ledger of all the transactions that take place in the system, accessible to everyone and unchangeable.
Imagining the case of a person donating cryptocurrency to a nonprofit, this means that it is extremely easy to be able to track where your donation goes and how it is used by the organization.
Thanks to the blockchain, it is possible to track how one’s donations are used from start to finish. Within the system, in fact, organizations can record and share with users all those documents that attest to how the funds were spent and what results were achieved for each project in which they were used.
This guarantee of transparency represents an important security for those who decide to donate, eliminating possible fears that their donation will be thwarted or used for less noble purposes.
Moreover, another advantage of cryptocurrency donations is that they enjoy great efficiency. Donating to any association is now very simple and can be done quickly and immediately from anywhere in the world.
For those who wish to donate part of their cryptocurrencies to charity, it is also possible to refer to several online fundraising platforms, which allow donors to identify non-profit organizations that accept this type of donation.
One such platform is The Giving Block, which allows donors to choose from more than 1,000 associations to direct their donations towards.
The Giving Block has also organized an initiative similar to 1% For The Planet, the Crypto Giving Pledge: this is a commitment to donate 1% of one’s cryptocurrency holdings each year to non-profit organizations that partner with the platform.
Anonymous donations
Blockchain can be a very useful tool to meet all those people who for different reasons would like their donation to remain anonymous.
We can think of all those countries where supporting certain causes can lead to very unpleasant consequences, up to and including arrest.
All transactions that are recorded in the blockchain are secure and totally anonymous.
In fact, each user has two strings of code, the public key and the private key. While the private key must remain secret and is used to unlock the funds, the public key is used to direct money to another user.
Every transaction is permanently recorded on the blockchain and is unchangeable. What is recorded, however, is only a code (called “address”) that is generated from the public key.
It is impossible to trace the public key back to the private key, so the identity of the donor remains secret and protected.
NFT and fundraising
Another interesting opportunity for activism and fundraising, directly related to the blockchain universe, are NFTs.
By NFT we mean a token that represents the deed of ownership of a digital asset that is not fungible, not replaceable with something else. This act of ownership is recorded on the blockchain, thus becoming immutable and visible to anyone. It is, in the extreme, the deed of ownership of a unique object in the world.
Today, NFTs often identify digital artworks, which are sold at auction to donate the proceeds to charity. But that’s not all. NFTs can correspond to any digital asset: a celebrity photo, a song, a drawing and so on.
The price of some NFTs has grown over time to reach into the millions of dollars. This makes them an important new tool for fundraising.
An example of how NFTs can be crucial for fundraising is provided by Jack Dorsey, CEO of Twitter, who in 2021 sold his first tweet in history in NFT form. The value of the cryptocurrency sale amounted to nearly $3 million, all of which was donated to charity.
The NFT sale can be organized through a partnership with large companies or celebrities: this helps the auction resonate with the audience of interest, increasing awareness.
Unlike a normal donation, where donors provide cryptocurrency without getting anything in return, the NFT sale allows the donor to get a kind of digital certificate of their philanthropy, encouraging and stimulating donations.
Moreover, working through the blockchain system, the NFT auction benefits from all the advantages listed above: speed of the transaction, efficiency, possibility to donate from all over the world, transparency and anonymity.
Can cryptocurrencies really help non-profits? The Pineapple Fund case
In 2017, on the social network Reddit, a user signed with the nickname “Pine” announced the opening of the Pineapple Fund, a cryptocurrency fund to be allocated to various non-profit organizations, inviting interested associations to apply to receive a donation.
The user claimed to be one of the world’s largest bitcoin holders and stated his willingness to donate most of his cryptocurrency to non-profits.
“Because once you have enough money, money is not important”, he wrote on the home page of the website dedicated to the project.
After receiving more than 10,000 applications, Pine selected 60 non-profits to which he donated a total of 5104 bitcoins, equivalent to $55 million.
The selected organizations were both large and small entities. The largest donations each amounted to $5 million, directed to GiveDirectly, The Open Medicine Foundation and MAPS.
Pine wished to remain anonymous, but his Pineapple Fund represents perfect evidence of the impact cryptocurrency donations can have on the non-profit world.
Veracura
Veracura recognizes the opportunities that blockchain technology and digital assets represent for the world of activism, and for this reason is developing a specific working group with the goal of turning these tools into allies to scale its mission.
If you are interested in supporting us in this initiative, you can apply to join our squad.
