Crypto adoption is on the rise, benefiting individuals worldwide as well as the projects that aim to do good by tapping into crypto liquidity. Nonprofits and others, including digital artists, are leveraging the blockchain in very creative ways to increase awareness and raise funds for their causes. As such, the intersection of crypto and charity is helping drive innovation on-chain and putting the spotlight on a new arm of trustless finance: decentralized philanthropy, or DePhi.
Why Crypto Is Ideal for Charitable Giving
With blockchain technology at its foundation, crypto has become a catalyst for innovation because of its many benefits. The attributes that make digital assets great for remittance and e-commerce are the same properties that make them attractive to both charities and the philanthropists that support them:
- Low payment processing fees
- Efficient, borderless transfers to charities all over the world
- A high degree of anonymity—an important factor for many donors
- Transparency, which helps track donations
The traceability of crypto donations is a plus for those who want assurance their gift directly benefits a people or cause, and not lining the pockets of nonprofit executives or otherwise being misspent. For others, the choice to donate crypto comes down to the tax benefits, which can be especially appealing to those who donate assets that can appreciate over time.1https://www.thegivingblock.com/tax-help-crypto-donations For still others, crypto donations help raise awareness of digital assets. As Alex Wilson, co-founder of the popular donation platform The Giving Block, wrote in Bitcoin Magazine in November, “Imagine hearing about Bitcoin for the first time because your favorite charity got a $1 million bitcoin gift. That’s a very different way of introducing people to Bitcoin.”
Jason Smythe, co-founder of Wildcards, a gamified wildlife conservation charity that accepts ETH and Dai donations, says that blockchain immutability and transparency are major advantages for his organization. “We have been able to create a convenient place for people to give to wildlife conservation and track their giving to multiple organizations, without any of our users needing to trust us as the developers of the platform,” he explains. “The process is transparent, open, and cannot change unpredictably for our users and organisations.” The platform enables people to “adopt” animals through the purchase and reselling of trading card-like animal renderings.
While much of the focus is on newer charities using blockchain tech, it’s the well-established global nonprofits that were among the earliest adopters of crypto and blockchain. UNICEF Ventures, the funding arm of the well-known children’s aid charity, has made early-stage investments in blockchain startups that further its mission since 2016.2https://www.unicef.org/innovation/blockchain UNICEF France added Single Collateral Dai (the precursor to Maker’s Multi-Collateral Dai stablecoin) as a donation option in 2018, and in 2019, UNICEF launched its Cryptocurrency Fund to manage crypto donations and investments in open source technologies.
The Numbers Don’t Lie
While crypto’s functionality makes donating and accepting donations fast and easy, the increase in crypto adoption, along with the rise in the value of the market, means there’s more to give. The expansion of crypto from nothing but a good idea in 20083https://bitcoin.org/bitcoin.pdf to a near-$2 trillion asset class today has generated new wealth for some and additional discretionary income for others—and charitable causes are benefitting.
The Giving Block, which enables charities to easily accept crypto donations and individuals to just as easily donate crypto, collected $2.1 million in crypto in December 2020 alone. Fidelity Charitable, the charity arm of financial services giant Fidelity Investments, captured $28 million in crypto donations in 2020, more than double the amount recorded in 2019.4https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2021-giving-report.pdf
Many crypto enthusiasts are willing to share their gains with good causes, and, to that point, charities everywhere are finding new ways to tap into that money.
How Charities are Targeting DePhi’ists
The desire of nonprofits to attract crypto donors is driving new technical solutions and promotion strategies beyond placing “Donate crypto” buttons on platforms.
The Giving Block supports around 200 nonprofits, according to Wilson, including major organizations such as Save the Children and the American Cancer Society. Users can donate several different cryptocurrencies, including GUSD (a stablecoin created by Gemini) and Maker’s Dai. The organizations receiving donations through the platform can choose to HODL or immediately convert the crypto donated to fiat to avoid price fluctuation effects.5https://www.thegivingblock.com/services Through the platform, the nonprofits fundraising crypto collect an average of $30,000 per year.
Others take a different approach. GiveCrypto was founded in 2018 by Coinbase CEO Brian Armstrong to “raise funds from early crypto holders and distribute payments to people all over the world who are either living in poverty or going through some sort of economic crisis."6https://www.marketwatch.com/story/its-really-hard-to-get-people-to-give-money-to-strangers-on-the-internet-coinbase-ceos-charity-enlists-ambassadors-to-help-donate-cryptocurrency-11615976484 The organization, which aims to put cryptocurrency directly in the hands (or smartphones) of recipients, is a good example of a charitable initiative that continues to market smartly. Its new Ambassadors program recruits individuals to find people in need of donations in their communities, vet them, and then teach them how to use crypto. Taking a transparent approach to charity, the project currently publishes real-time data around its Venezuelan Ambassador Program.
BitGive, a pioneer in crypto philanthropy founded in 2013, has developed GiveTrack, a platform that offers charities the ability to fund specific projects with crypto (or credit/debit card) donations.7https://www.givetrack.org/faq It, too, provides transparency by sharing project donation results with users in real time. BitGive ran the De-Phi Crypto for Good Conference in November 2020, a first-of-its-kind event that showcased several initiatives helping to improve the world through crypto giving.
An imaginative example of attracting DePhi’ists is provided by rTrees, an Ethereum-based initiative that enables users to generate returns on Dai held in their MetaMask wallets. The tokens earned are automatically donated to Trees for the Future, a charity that seeks to end hunger and train farmers in sub-Saharan Africa by planting trees that create and protect nutrient-rich soil. The trees planted are represented in a virtual grove that users can help cultivate with “power up” donations that speed planting and growth.
Giving Inspired by Art
While nonprofits use DeFi apps in creative ways to draw donors, artists are now creating art as programmable non-fungible tokens (NFTs) to draw attention and donations to causes they support.
Artist Micah Johnson has created a digital work to benefit two young boys facing adversity, Jacque and Rayden. The piece, titled sä-v(ə-)rən-tē, is described on the artist’s Async.art page as “a symbolic act of sovereignty, an independent artistic solution to an ongoing national conversation about equity, diversity, and inclusion.”
The work depicts the boys on one side of a door that stands unsupported in a field. Waiting on the other side of the door is an astronaut, a figure representing the boys’ dreams. Each year on the boys’ respective birthdays, the door opens to reveal their aspirations and Bitcoin wallet addresses to which people can send contributions. Starting this year, people can also donate Dai. When the boys reach their 18th birthday, each disappears from the image and receives their crypto wallets.
Programmed art enables the layering of images in a work. In Johnson’s art, the astronaut is the only layer that can be purchased.
Another example of blockchain-powered giving through art is provided by crypto evangelist Mai Fujimoto, known to her fans as Miss Bitcoin. In January, Fujimoto launched a celebrity NFT art project for charity in partnership with the blockchain gaming platform Enjin.8https://cointelegraph.com/news/japan-s-miss-bitcoin-launches-celebrity-nft-art-charity-project The aim is to sell tokenized art created by Japanese celebrities to raise funds for the Japanese nonprofit DxP, which provides aid to teenagers facing challenges during the coronavirus pandemic.
Organizations and individuals are leveraging crypto and DeFi in creative ways to develop new models of funding for good causes. In that sense, the benefits of DePhi go far beyond the donated crypto, extending to create a cycle of benevolence through which the causes, the donors, and the blockchain are all winners.