Bitcoin and cryptocurrency remained off the radar for much of the world until the infamous bull run at the end of 2017. Talk of ‘Lambos’ and vacation homes filled Crypto Twitter and Telegram. Everybody had the fever. Investors were hungrier than ever before as they planned their own futures. Their fortunes came so quickly that most of the community became greedy overnight.
Satoshi Nakamoto set out to create a better financial system. One that wasn’t controlled by centralized entities. Cryptocurrency was meant to make our society more equal but we quickly forgot that as we got rich overnight. Some remembered and made charitable donations with their appreciated crypto. They kept in mind how important adoption was.
Greed, one of the seven deadly sins. How did this happen to us? Wasn’t cryptocurrency about empowering the less fortunate and leveling the economic financial structure? Most of us were caught up in the hype, but not everyone.
There was suddenly a flood of multimillion-dollar donations being made to the small group of nonprofits who were ready to accept those donations. These nonprofits were spreading awareness and engaging the crypto community with clear visions of bettering our world. They were making the internet more free, finding cures to diseases, fighting for human rights and more. Crypto should play a key role in making the world a better place but we need everyone in the community chipping in to their favorite causes.
Each major crypto donation served as a positive PR campaign for the entire community. A one million dollar fiat donation won’t make a headline but a million-dollar Bitcoin donation is a headline and more. Bitcoin donations aren’t just good for the nonprofits, they’re good for the whole community. Each positive impact that cryptocurrency makes is one step closer to legitimacy and mainstream adoption. The world’s largest companies around the world put Corporate Social Responsibility (CSR) at the center of their brands. It’s time the crypto community learns from its previous cycles and takes note.
Not everyone can donate millions in crypto, but we all should contribute to growing our community in these positive ways. Below are examples of the most notable cryptocurrency donations to date.
For most nonprofits, cryptocurrency adoption may still not be a priority, but this is changing. I’m anticipating that this adoption will shine a positive light on crypto and spread awareness more effectively than previous efforts. Everyone in the community should play their part. You might not have an easy way to call your bank and ask them to be pro-crypto but you can certainly ask your favorite nonprofits to embrace crypto and make a donation.
The memes about institutional adoption are true. The institutions are coming, just not the ones you expected. Its nonprofits, not hedge funds. Nonprofits have massive followings and reach. Nonprofit adoption is a major catalyst for legitimacy in the eye of the public. Who knows, maybe nonprofits even spark the next bull run.
Let’s take a look at a few of the reasons why nonprofits are beginning to take an interest. You can even use these reasons to educate the nonprofits you contact on why they should take your Bitcoin. Think about the effect this can have on cryptocurrency market cycles, be the spark.
Fundraising: Cryptocurrency Donations
Cryptocurrency donations are a way for nonprofits to diversify their revenue. In many cases, crypto donors are an entirely new pool of contributors that weren’t previously donating. Although it’s estimated that only 1% of nonprofits currently accept Bitcoin or other cryptocurrency donations, you will likely be surprised by some of the big names accepting crypto donations. Some organizations like the Internet Archive have been accepting Bitcoin since 2011 while others are just getting started. You can find over 100 nonprofits that accept cryptocurrency donations here and below I’ve displayed a sample of some of the most well-known names.
You can expect this list to continue growing quickly. Ten years ago, many nonprofits didn’t even accept credit card donations. Now they all do. I believe the adoption of cryptocurrency will be similar over the next few years.
With an option to donate crypto directly to a nonprofit two things change. Initially, the crypto donor now has a much more tax efficient way to make a contribution to a nonprofit. In the US, crypto donations are treated similar to stock donations. The donor is not required to pay capital gains on the crypto donated and can write off the contribution on their taxes. If the donor were to first sell their cryptocurrency and then make a donation, they would in most cases lose 20%+ and in return be making a smaller gift.
In addition, donating crypto is simply more convenient than pulling out your wallet and entering credit card information. When using your online wallet you can send your favorite nonprofit a crypto donation in just a few clicks. It’s also much easier to prepare tax statements when donating crypto since everything is on the blockchain with easily searchable records.
Marketing and Awareness
Cryptocurrency users are a new pool of potential donors to engage with and help raise awareness about a cause. As a crypto user, imagine how much more likely you would be to support a nonprofit on social media or attend one of their charity events if they were pro-crypto? This is particularly true for millennials and Gen Z who are traditionally difficult to engage with for most nonprofits. The most visionary nonprofits are realizing they will stand out and show people they are innovative.
Fun Fact: On average, more people search “donate bitcoin” than “donate stocks” on Google.
More than scalability, the foremost problem facing our blockchain community is that of legitimacy. So far, it’s been a long and hard path getting the worlds largest enterprises to adopt crypto. Why should the worlds largest companies disrupt themselves? For the average user, this concern is peripheral and attempting to drive corporations to transact in crypto feels daunting and futile. As a result we turn inward, complaining in the echo chambers of our community.
Internal feedback still matters though, as many external actors are in fact unwilling to listen. But there is an external demographic that is always worth engaging — nonprofits. Nonprofit partners bring with them legitimacy and attention and unlike for-profit stakeholders, your support, not market validation, is what matters most. A strategically sound, symbiotic nonprofit relationship will elevate your project. As a bonus, this story is not just great for you, it’s fantastic for the broader adoption of cryptocurrency by traditional stakeholders.
Why are nonprofit partnerships valuable? Ask yourself the following: Does Nike make the “best” shoes?
Nike doesn’t emphasize the quality of their insoles. They reach beyond the quality of their products by aligning themselves with famous athletes. The message? If the world’s greatest athletes use Nike products, they must be good. This thought process is mirrored when the crypto world partners with nonprofits — If the world’s positive impact organizations work with X project, they must be legitimate.
Recently, companies have taken corporate social responsibility (CSR) to the next level. Call it “virtue signalling”, but if you are outside of the cryptocurrency community, which two projects have you heard about? It’s not Bitcoin and Ethereum → It’s Bitcoin and Ripple. Why Ripple? Because they’re the crypto CSR goliath.
Their CSR, not their bank relationships, are why your mother has heard about them. $50M to universities around the world. $29M to DonorsChoose. A $4M donation to the Ellen Degeneres Wildlife Fund, on the Ellen Degeneres show executed by Ashton Kutcher — this is the pinnacle, but you get the idea. Yes, these stories got my parents talking about crypto. But more importantly, it made them comfortable with the idea of their son pursuing a career in this industry. These are the stories that make crypto feel legitimate and safe.
Transcending the crypto echo chambers via nonprofit partnerships not only get you seen, but seen as legitimate. The reputation of cryptocurrency comes along for the ride (see below).
So, what are some examples of nonprofit and crypto partnerships? Let’s take the example of the Brave Browser. Brave has launched an Ad Grants program similar to Google Ad Grants. The basic idea is that they are awarding crypto-friendly nonprofits approximately $10,000 in free ads every month. To date, my company has on-boarded The Human Rights Foundation and Code to Inspire. The announcement by Brave was covered in publications ranging from CoinDesk to Engadget. Nonprofits in the program have benefited from hundreds of thousands of impressions and site visits through the Ad Grants. This has been a great way for nonprofits to directly engage with an incredibly tech and crypto savvy audience. With already 6 million monthly users, this is likely one of the best ways for nonprofits to get in touch with the crypto community.
Another example is the charity program at IoTeX. The Giving Block partnered with IoTeX to create a charity of quarter program. All rewards produced by The Giving Block IoTeX delegate will be donated to a different charity every quarter. The first recipient of this program will be the Lupus Foundation.
Transparency and Efficiency
Cryptocurrencies are the most transparent way of exchanging value ever created. Even the FBI and DEA have stated they wish more criminals would use cryptocurrencies because they are much easier to track.
Cryptocurrency is making it possible for nonprofits to be more transparent and efficient than ever. Whether that’s using a public blockchain to trace donations or distribute and track aid abroad, there has never been a better tool to increase transparency and efficiency. Take for example organizations like Sempo who are using stablecoins like DAI to deliver better cash transfers for nonprofits like Mercy Corps and Oxfam.
Most nonprofits aren’t ready for the level of transparency that cryptocurrency would bring, but with donors pushing for transparency they’ll have no choice but to open their books. Imagine being able to send a Bitcoin donation, then see the nonprofit distribute that aid directly to a beneficiary. All public. All verifiable. Would that make you more likely to donate? It sure would for me.
Although we aren’t seeing this on a large scale yet, nonprofits are dipping their toes into the world of crypto. The efficiency is enabling them to become more comfortable with transformative use cases around donation tracking and transparency.
So, how can I help spread adoption?
As a crypto community, we should look to engage and work with nonprofits who are crypto-friendly. If a nonprofit isn’t crypto-friendly yet, tweet at them or send them an email. Share with them as a potential donor that you would be more likely to donate if they embraced crypto.
Working with nonprofits can be a powerful adoption and marketing tool. Nonprofits have the reach and following to help bring crypto mainstream. They are helping this community shine a positive light on crypto with some of the best use cases available. The institutions are here, they just aren’t the ones you expected yet!
Disclaimer: This article is not tax or financial advice, please seek the help of a professional tax consultant or financial advisor.
About The Author:
Co-Founder, The Giving Block
Alex’s background is in management consulting where he worked with Fortune 500 companies to develop strategies around emerging technologies like AI, IoT and blockchain. As he went down the blockchain rabbit hole, he began consulting and investing in early stage blockchain and cryptocurrency projects. Now, he’s turned his attention to the nonprofit world where he equips nonprofits to accept Bitcoin and other cryptocurrency donations. He is also the director at BlockShop DC, a blockchain incubator and event space that hosts 7 startups in the Washington DC area.