Five Reasons non-profits should start accepting crypto donations this giving season
Giving Season is the most important time of the year in the charitable sector. It’s when many non-profits make a final push for donations, often with well-established campaigns and strategies built specifically for giving season. This year, there is a lot of uncertainty around giving season, and if it will measure up to past years. After all, it has been an incredibly difficult year for charitable organizations.
With the current economic challenges facing the world, non-profits have been hit on all sides. On the one hand, inflation has increased the costs for non-profits to deliver their services. On the other hand, donors have also been hit negatively, and thus, non-profits are seeing lower donation volumes. Finally, there are more individuals in need of the services offered by non-profits, especially those that provide emergency assistance such as food banks and shelters.
With this trifecta of challenges impacting non-profits, this giving season is perhaps the most important one we’ve seen in years. As non-profits are building out their giving season strategy, it’s important for them to consider how they can engage with new audiences and technologies. This is where crypto philanthropy comes in.
At the moment, many non-profits are hesitant to engage with cryptocurrency. While excitement in the web3 social impact space has never been higher, the crypto market is down, and many have lost trust in cryptocurrency following recent events. However, despite the market conditions, many non-profits are doubling down on crypto philanthropy as they recognize that it is here to stay, and that it is a creative way to expand their fundraising reach and connect with new audiences.
So, in this blog post, we highlight five reasons why your non-profit should start accepting cryptocurrency donations this giving season. As a disclaimer, it’s important to note that crypto fundraising takes a lot of effort and is not a simple as setting up a wallet. So, if you’d like help building out a strategy, feel free to reach out, we’d love to help!
1. Crypto donors are very generous
What many find surprising is just how generous crypto donors really are. After all, there is the perception that cryptocurrency is only used for criminal purposes by shadowy basement-dwelling coders. However, this is not True. In fact, one study found that almost half of cryptocurrency owners donated $1,000 or more to charity in 2020. Interestingly, only about one third of the investor population as a whole donated $1000 or more.
This theme was only reinforced during #CryptoGivingTuesday in 2021 with those in the crypto community coming out in droves to support their favourite charitable causes. In fact, according to The Giving Block, the average crypto gift on #CryptoGivingTuesday was a whopping $12,600 USD, or 98.4x higher that the non-profit industry’s average donation size.
A more recent example of the generosity in the web3 community can be seen in the response to the Russian invasion of Ukraine. Since the beginning of the crisis, large amounts of crypto donations quickly made their way to humanitarian organizations working on the ground and even directly to the Ukrainian Government. In fact, at the time of writing this post, over $130M in tracked crypto donations within a couple of months.
It is also commonplace to see major gifts made by so-called crypto whales. For example, in 2021, Vitalik Buterin, Founder of Ethereum, donated $1 Billion in cryptocurrency to help fight COVID-19 in India. In the world of NFTs, Beeple, one of the world’s most well known NFT artists, sold an NFT for $6 million and donated a portion of the proceeds to the Open Earth Foundation. Médecins Sans Frontières also recently received a donation of $3.5 million in what was the world’s largest cryptocurrency donation from an NFT project.
There is no denying that cryptocurrency donors are very generous, and by accepting cryptocurrency donations, it opens you up to a new audience of donors who are more than willing to give back to the
2 – Engaging with cryptocurrency helps expand your organization’s reach globally and to a new generation of donors
By accepting crypto donations, it enables you to spread your message to a much broader, more global audience. There are few communities that are truly as globalized as the web3 community. A quick look at Chainalysis’ Global Crypto Adoption Index shows you how global the reach of crypto is, with every continent but Oceania (and of course Antarctica) having representation in the top 20 list of Crypto-adopting countries.
By adopting cryptocurrency donations, and joining the crypto and blockchain ecosystem, you can open your organization up to new audiences and a new type of donor that is hard to reach via traditional fundraising methods. Additionally, it helps build your brand and expand your fundraising footprint outside of your local community.
Accepting crypto donations also helps you connect with a younger generation of donors. With the average charitable donor in the United States being 64 years old, it is important for non-profits to put in place intentional strategies to connect with younger donors, helping to future proof their organization. In fact, 94% of all cryptocurrency buyers are 18-40 years old, providing your organization with a unique opportunity to connect with emerging donor demographics.
Furthermore, it also demonstrates that your organization believes in and values of innovation and transparency. These two traits are of the upmost importance to the next generation of donors, who grew up in the smartphone era with access to any information they could ever want with the click of a few buttons. They value organizations that are open and honest, and that is also why so many of them value cryptocurrency and web3. These individuals also want to see non-profits embracing technology as a way to more effectively deliver their services, because they believe in the power of technology to improve lives. Transparency and technology are vital to the long-term success of any non-profit organization, and if these organizations don’t embrace them, they risk falling behind.
3 - It’s easier than ever to accept crypto donations
Whether you decide to accept donations through a crypto giving platform, such as The Giving Block or Endaoment, or directly to your organization’s own wallet, crypto giving has never been easier and more accessible for those who aren’t as experienced with blockchain or making cryptocurrency transactions.
There are an infinite number of high-quality resources online that will walk you and your organization, step by step, through setting up an account on a giving platform or exchange, or setting up your own organizational wallet.
For those who are new to the space, going with a giving platform such as The Giving Block is a great way to get oriented with crypto fundraising, and to learn about the basics of cryptocurrency. In time, as you get more comfortable, you may then decide to start accepting donations independently, or you may decide that the convenience of a third-party platform is worth the small platform fee they charge. Most platforms are also set up to automatically convert the donation to fiat currency, securing the value of the donation and protecting your organization from volatility.
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 came to the conclusion that it was a winning policy.
Beyond large international non-profits, crypto fundraising is also accessible to small, locally-based organizations, and we have seen hundreds of these smaller organizations start accepting crypto donations as well. The point is, if your organizations decides to start accepting crypto donations, and I hope you do, then you will not be alone, as thousands of other organizations have already taken that step.
The point is, whether you are new to the space, or an experienced cryptocurrency veteran, and whether you are a small or large organization, you can be set up to accept cryptocurrency donations in less than a week’s time.
4 – Accepting crypto donations is step one to engaging with the web3 community
Those in the web3 space come from many backgrounds. They aren’t just coders, but are community connectors, promoters, policy experts, artists, and more. Accepting crypto donations can get your foot in the door to this amazing and talented community. It can be step one in a journey to fully embracing web3 and all its future use cases for your organization. Blockchain and decentralized platforms, apps, and organizations, are revolutionizing the way that non-profits deliver their services all over the world. Whether it’s providing direct access to financial services for marginalized populations, supporting and empowering refugees, delivering Unconditional Basic Income (UBI), combatting climate change, or monitoring ocean clean-ups, the use cases are truly endless. By engaging with the web3 community, it can open your mind to new technologies and use cases that can truly revolutionize the way your organization supports beneficiaries and delivers on its mission.
5 – It’s not a matter of if but when
Ultimately, when it comes to accepting cryptocurrency donations, it’s not a matter of if, but when. In the book “Bitcoin and the Future of Fundraising” by Anne Connelly and Jason Shim, which I highly recommend, they use the example of accepting credit card donations. Decades ago, individuals were terrified at the idea of entering their credit card information online, and many non-profits were slow to accept credit card donations. Then, when credit cards were adopted at a rapid pace for online payments, many non-profits were slow to react, and missed out on potential donors who chose this as their preferred method of payment over cash or cheque.
In a sense, cryptocurrency can be viewed very similarly, but with much broader implications. Not only does it have the benefit of connecting your organization with a new and exciting donor base, in which hundreds of millions in donations are being made, including major gifts in the millions, but it also opens your organization up to an exciting new technology with use cases that go well beyond simply accepting financial contributions.
Non-profit organizations can either be a leader in the space, and embrace innovation, or scramble and play catch up a couple years from now. If they choose the latter, their organizations will miss out on all the benefits that come with being an early adopter.
Conclusion
There’s no denying that it will be a challenging giving season for non-profits. Although crypto philanthropy is no sure thing, and it requires a lot of effort to build relationships with donors and secure donations, non-profits must be willing to innovate, and try new things to survive in this new environment. Crypto philanthropy can help non-profits engage with an exciting new community, expand their presence, and build relationships with a new and generous donor demographic. Non-profits should embrace this, step outside of their comfort zones, and become early adopters of this exciting new technology.
Interested in accepting crypto donations at your non-profit but don’t know where to start? Feel free to reach out, we’d love to help!
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