Blockchain offers a range of benefits to facilitate raising money for non-profit organizations and helping those in need. Thanks to the technology, NFTs and cryptocurrency are not only investments but also powerful tools that drive charitable donations. Crypto-assets can provide a safe, more transparent way of funding, along with several other benefits.
As the adoption of cryptocurrencies and NFTs grows exponentially year on year, charities and non-profit organizations have begun to incorporate them for fundraising. In 2021, the number of donations in digital assets made through ‘The Giving Block’ organization surpassed those made in 2020 by 1558% (amassing $69,644,535 in total), and 2022 looks even more promising. The director of Crypto Consultants UK commented that crypto donations offer multiple advantages, including the following:
- Charities have full control over fundraising with no third parties being involved.
- Transparency for donors.
- Blockchain has a growing user base, which could thereby increase the number of donations.
- Crypto-assets are borderless, which could increase donor size.
- Reduced fees for donors and charities alike.
- Ease of collaboration.
- NFTs embrace creativity.
- Popular ambassadors can raise funds by selling their own NFTs for the charity.
He explained that NFTs offer transparency as they live on the blockchain and can be checked by anyone. Anyone can see who created a digital asset, who owned it in the past, and its overall journey from wallet to wallet. This is appealing both for the charity and the donor as NFTs build trust, allow for permissionless access, and provide proof of ownership.
Decentralization and quick money transfers make crypto and NFT donations efficient and unrestricted. The crypto expert shared a few examples:
“Many have also learned from the situation in Canada where donations were frozen. This pushed charities towards NFTs and crypto. As well as some recent examples of NFTs being used by charities for Covid-19: Aid, a UK-based charity, auctioned off their logo as an NFT to raise funds.”
In Canada, the government froze money raised to support the Freedom Convoy – a protest against restrictions caused by the pandemic. Almost $10 million which had been collected on the GoFundMe platform was made unavailable for withdrawal. The protestors then turned to Bitcoin due to its non-traceable structure and resistance to censorship, raising $1 million.
In a similar vein, Ukraine has received millions in cryptocurrency and NFT donations. The besieged nation has been suffering through a bloody war and requires large-scale financial support. Government officials have seen many benefits from receiving funds in crypto-assets.
To better facilitate digital asset payments, Ukraine’s Ministry of Digital Transformation launched its own crypto fundraising site aid, while the national bank of Ukraine received $1 million from Solana’s community. DAOs, individual artists, and art projects have also expressed their support for the country through crypto philanthropy.
To attract investors and supporters, some NFT projects pledge to donate a portion of their profits to environmental, medical, and humanitarian non-profit organizations. Fortunately, blockchain technology allows users to ensure that the funds are indeed traveling to those destinations, and these Web 3.0 initiatives help make the world a better place overall. Unfortunately, NFT projects use the ‘charity feature’ as a marketing strategy and do not always fulfill their promises.
On the Flipside
- There have been numerous fake crypto/NFT charity projects, so it’s important to ensure that the charity collecting funds is reliable.
- According to The Giving Block, Ethereum charity donations surpassed Bitcoin donations in 2021.
Why You Should Care
In many cases, donations in digital assets can be more trustworthy than those made in fiat currencies.