Building an Accessible Web3 Ecosystem for Nonprofits

PhilanthropyCommentary
Written By Drew Simon

Despite the exponential growth and adoption of Web3 technology in recent years, many nonprofit organizations still perceive it as inaccessible and are hesitant to get involved. This could be due to stigmas about Web3, feeling intimidated by the technology, or simply not seeing the potential use cases of how Web3 can support their organization's mission. Web3 is a generational technology for social impact, and to maximize the potential of this technology to drive real world change, it's crucial that we address this issue and break down the barriers preventing nonprofits from engaging.

In this article, we highlight five steps that can be taken to build a Web3 ecosystem that is truly accessible to nonprofits, and empowers then to use this game changing technology to grow their impact.


Leading with the benefits, not the technology

In Web3, we tend to be, well...obsessed with the technology, and rightfully so. After all, blockchain is a revolutionary technology that has the potential to positively disrupt nearly all aspects of our lives in one way or another. However, when working to onboard non-Web3-native individuals and organizations to the space, it's important to lead with the benefits to them and their organization, not the technology.

For nonprofits, especially smaller ones that may not have a dedicated IT team, the idea of blockchain may be intimidating. Add to that the fact that many nonprofits are risk averse and slow to adopt new technologies, and one can understand why leading with the technology could be the wrong approach to getting nonprofits excited about Web3.

When selling, let's say, a new SaaS (Software-as-a-Service) platform to a business, the sales representative doesn't lead with what programming language it's written in, or which cloud hosting service it's deployed on. They lead with the benefits to the organization - how it will improve their operational efficiency, customer retention, or cost-effectiveness. The same needs to be true for how we promote Web3.

When approaching nonprofits, it's important to lead with the benefits that come with engaging in Web3, which could include the value of decentralized community governance, appealing to a global community, developing new revenue streams, or more transparently tracking their organizational impacts. While it is important for nonprofits to understand the technology behind the services and tools they use to deliver their mission, and the potential risks and opportunities that come with the technology, it certainly doesn't need to be the main selling point.

 

Breaking down stigmas about crypto

Cryptocurrency is facing a PR challenge. Over the last year and a half, the space has been plagued by the collapses of prominent institutions, scams, and other negative behaviors by bad actors in the space, that has broken down trust and public perceptions towards cryptocurrency and Web3. One study found that, amidst the crypto winter, public perceptions of the security and trust towards crypto continue to decline.

Despite its rapid growth, and numerous examples of the positive use cases of Web3, it still faces many negative stereotypes that hinder its acceptance by some nonprofits. Some common misconceptions include that it is only used by criminals, that it is all one big Ponzi scheme with no real-world use cases, that it's terrible for the environment, and that you need to have a strong background in computer science to get involved in Web3. These stereotypes can create barriers for nonprofits considering the adoption of Web3 technologies. For example, some nonprofits may worry that, by accepting crypto donations, it may alienate their traditional donor base. This risk-reward trade-off is something many nonprofits have contended with.

To shift this narrative, it's important to have open and honest conversations with nonprofits about these stigmas, acknowledge their concerns, discuss what's being done to address these concerns in the ecosystem, and present an alternative perspective focused on the positives. These stigmas exist for a reason, and instead of just shutting them down, it's important to acknowledge them and present a positive alternative perspective.

 

Creating simple on-ramps for nonprofits

One of the barriers facing nonprofit adoption of Web3, is risk-aversion towards new technologies. Nonprofits are understandably risk-averse and may be slower to adapt new technologies than in other sectors. The main function of nonprofits, after all, is to responsibly steward donor funds and deliver impact. With the adoption of any new technology comes risk, and thus, nonprofits need to be careful when experimenting.

To address this, it's important for builders to create accessible, simple, and low-risk onramps for nonprofits to Web3. These onramps should include support with setting up their first crypto wallet, an introduction to the basic concepts behind Web3, and coaching on safety, security, and common scams in the space.

Two great examples of Web3 organizations building accessible onramps for nonprofits are Endaoment and The Giving Block, two leaders in the crypto philanthropy movement. Both organizations have made it super easy for nonprofits to begin accepting crypto donations, regardless of their knowledge level. They both provide a high degree of support and resources for nonprofits, and collectively, have onboarded thousands of nonprofits to the space.

Crypto philanthropy is of course just one part of the equation, and builders in all areas of the Web3 social impact ecosystem must work to ensure their solutions are easily accessible by non-Web3-native populations, and that appropriate educational resources and support are in place to create as seamless an onboarding process as possible.

 

Leading by example and sharing best practices

One of the most effective ways to build widescale adoption of Web3 in the nonprofit sector, is for prominent organizations in the sector to lead by example and share lessons and best practices in a language that is easy to understand by non-Web3-native organizations. 

We have seen thousands of non-profits already begin accepting cryptocurrency donations. This includes organizations such as UNICEF, Save the Children, the American Cancer Society, Mental Health America, The Leukemia and Lymphoma Society, United Way Worldwide, CARE, Feeding America, and even some University endowments.

We have seen some of these massive organizations go all in on accepting cryptocurrency donations by establishing specialized cryptocurrency funds. One of these organizations, the American Cancer Society, recently launched a Cancer Crypto Fund with the goal of raising $1 million to support cancer research. Another example of one of these funds is the UNICEF Crypto Fund, which supports the development of innovative humanitarian projects around the world.

If these massive organizations, with there large PR and legal teams, and extensive fundraising experience, think it is a good idea to accept crypto donations, then it probably is. It is likely that they put substantial thought in to it, had it vetted by their legal teams, had substantial discussion at their Board Meetings, and concluded that it was a winning policy.

Leading by example is one thing, but openly sharing best practices is equally important in creating widescale adoption. It's important for nonprofits to share openly the benefits of engaging with Web3, and the risks and challenges that come with engaging in the space. For a great example of nonprofit Web3 leaders sharing best practices, can be found in our interview on the Crypto Altruism Podcast, with Joe Agoada, CEO of Sostento. The Giving Block has also done a great job sharing best practices and case studies in crypto philanthropy, including through their 2023 Annual Report on Crypto Philanthropy. 

As more nonprofits get on board with Web3, experience its benefits, and share stories of success, it will help create a flywheel effect that will result in more-and-more nonprofits engaging with Web3.

 

Creating space

Finally, it is important to create accessible spaces for nonprofits to learn about the benefits of Web3, form partnerships, experiment, and discuss use cases. This could include more formal spaces such as communities of practice or masterminds, or more informal opportunities such as Twitter spaces, webinars, or Discord groups.

It is also important that the Web3 social impact ecosystem is well represented at conferences and events, including both Web3 and traditional nonprofit sector conferences. The Web3 social impact ecosystem is still a relatively small niche within the broader Web3 ecosystem and traditional nonprofit sector, and it's important that it is well represented in both communities.

One excellent opportunity for nonprofits to learn about crypto philanthropy, is the upcoming State of Crypto Philanthropy Digital Summit hosted by Endaoment and The Giving Block on June 28, 2023. It is important to create more low-risk opportunities like this for nonprofits to start engaging with and learning about the incredible potential of Web3 to support their organization's mission.

 

The time is now to become a Crypto Charity and develop your Web3 strategy

It’s not a matter of if, but when cryptocurrency fundraising become the norm and blockchain is used at scale by Nonprofits all over the world to advance their causes. That being said, it’s better to be an early adopter and to get on board now, than to wait and play catch-up in the future. If you choose the latter, it may be much harder to break through the noise and form key partnerships, reach new audiences, and truly benefit from the technology.

To Nonprofits, it is understandable that Web3 can be overwhelming and intimidating, but we’re here to help. Through NextGen Nonprofit, our consulting arm, we offer personalized support to help your Nonprofit develop a comprehensive Web3 strategy. Whether it’s accepting cryptocurrency donations, developing a Web3 marketing strategy, or forming key partnerships, we’re here to make it a lot easier for your organization.

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Drew Simon
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