Ten reasons non-profits should embrace crypto philanthropy in 2022
For many non-profits, April is the start of the fiscal year and the beginning of a new fundraising year. As non-profits continue adjusting to the changing philanthropic environment and economic uncertainty in the world, they are looking for new ways to engage with potential donors. This should include accepting cryptocurrency donations.
The momentum in the crypto giving space is incredible, and there is no better time than now to get on board. Not convinced? Here are 10 reasons that should convince you of the value of crypto philanthropy for non-profits.
1. Crypto philanthropy is growing at an incredible pace
Year over year, crypto giving is experiencing incredible growth. According to The Giving Block, the largest crypto giving platform, approximately $300,000,000 USD worth of cryptocurrency is donated to charitable causes each year, and it can only be expected that this number will continue to increase with wider crypto adoption. In 2021, we also saw the growth of Crypto Giving Tuesday, which saw millions of dollars flow to a variety of charitable causes. A total of $2.4 million USD worth of cryptocurrency was donated this #CryptoGivingTuesday through the Giving Block platform alone. This doesn’t account for donations made directly to non-profits, or through other crypto giving platforms. What was truly inspiring, however, was the engagement around #CryptoGivingTuesday online, as non-profits, donors, and collectives shared their vision for the day, and the role that crypto giving can play in the broader social impact space.
Whereas crypto giving used to be a super niche market, with a modest number of organizations accepting donations, this is certainly not the case anymore. There are thousands of non-profits currently accepting cryptocurrency donations, including massive organizations such as UNICEF and the United Way, and smaller and mid-sized organizations as well.
2. 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 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 had made its way to Ukraine.
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 causes they care about.
3 - Crypto Giving can be highly cost effective
Accepting cryptocurrency donations has the potential to save non-profits a lot of money that would have otherwise gone to middlemen organizations such as legacy giving platforms, credit card companies, and payment processors.
In my blog post “Accepting crypto donations in the charitable sector,” I highlighted the exorbitant fees that some donation platforms charge to charities. Global Giving, for example, charges 8-15% in fees, while GoFundMe charges 2.9% plus 30 cents per transaction.
Many charities elect to accept donations directly through their website via credit card, but this doesn’t prevent them from paying fees. In fact, typical credit card fees range from 1.3% - 3.5%, and this doesn’t account for the additional cut that goes to the payment processor.
While these fees may seem like a drop in the bucket, they add up over time and can end up costing charities a substantial amount in lost revenue. Ultimately, these fees mean less of your donation goes to the charity, reducing the impact of your donation.
Most cryptocurrency transactions, on the other hand, are extremely low cost, especially relative to the alternatives mentioned above, and can help ensure a greater share of the donation goes to the non-profit, ensuring that each donation has a greater impact. Now, of course, for those who decide to go with a crypto giving platform, instead of accepting the donations directly, there will be fees. That being said, crypto giving platforms tend to charge very reasonable fees overall, and your money is supporting an innovative new organization, instead of a payment processor that brings in billions in revenue a year, and whose CEO makes more in two days than the average person does in a year.
4 - 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 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.
The point is, whether you are new to the space, or an experienced cryptocurrency veteran, in either case you can be set up to accept cryptocurrency donations in less than a week’s time.
5 – Engaging with cryptocurrency helps expand your organization’s reach globally
By accepting crypto donations, it enables you to spread your message to a much broader, more global audience. There are few communities that are 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 area.
6 – Accepting crypto donations shows that you value innovation
Accepting cryptocurrency donations shows that your organization believes in and values 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.
7 – Many non-profits are already doing it
Massive international non-profits have already begun accepting cryptocurrency donations and have seen great success with their efforts. 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. All crypto received through the fund will go directly towards cancer research for “new discoveries and better treatments”.
Another example of one of these funds is the UNICEF Crypto Fund, which supports the development of innovative humanitarian projects around the world. To date, this fund has received over 2500 ETH and 15 BTC in donations 1625 ETH to support social impact start-ups.
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.
8 – Major gifts are common place in the crypto space
When it comes to crypto giving, the power is in the community, and accepting crypto donations will open your non-profit up to millions of potential new donors. However, we have also seen an increasing number of large-scale donations made by so-called crypto whales, or through large organizations, such as crypto exchanges. 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.
If your organization embraces the value of accepting cryptocurrency donations and joins the community as hundreds of non-profits already have, it gives you the opportunity to be in the running for large donations from leaders and organizations in the space.
9 – 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 much 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 your mission.
10 – It’s not a matter of if but when
Ultimately, when it comes to accepting cryptocurrency donations, it isn’t 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 of the potential 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.
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