NFT Fundraising Flavors: For-Profit, NPO, and Politicos
When was the last time you wrote a check for cash? Or maybe I should ask, have you ever written a check for cash? Or written a check at all?
Some people rarely carry cash anymore, especially in bigger cities. They simply tap their card or swipe their phone. When I was in NYC last fall, the ability to scan the OMNY app on my phone to hop on public transport was a revelation. No more dealing with the grubby, glitchy MTA machines! I’m happy to say that my MetroCard is now a sentimental bookmark.
As our financial lives move online, it’s no surprise that causes, people and businesses looking for money are fundraising online as well.
NPOs look for donations, companies look for sales, startups look for funds. Anyone and their cousin Fred can raise money on GoFundMe. Even politicians are raising money online now.
Art NFTs were the big story of 2021 in the fundraising world. This post won’t cover what is an NFT or the “how-to” part of creating NFTs. Instead, we’ll take a look at what to consider before you even get to the “how-to” part, and see some different projects and partnerships that raised money online using NFTs.
Before we do all that, it’s helpful to remember that launching an NFT fundraising campaign requires some strategic decisions.
Considerations for an NFT Fundraising Strategy
Below are some considerations to think about before you dive into creating your NFT.
Tax Implications for NFT fundraising
Will you accept cryptocurrencies? If so, there are tax implications to be worked out.
Are there fundraising regs in your industry or space? For example, political campaign finance laws or SEC regulation crowdfunding for online fundraising.
Environmental Considerations in NFT fundraising
The energy used to power cryptocurrency and NFTs can be hard on the environment if you don’t choose the right platform. Bitcoin mining, in particular, is still a big culprit. Cryptocurrency leaders are aware that all this is a significant challenge to the industry and the planet, and they are working on alternatives that use renewables or much less electricity.
Marketing and Creating Community with NFT Fundraising
In addition to raising cold hard cash, or, in this case, hot-wired funds to your bank account, NFT launches can yield significant marketing benefits. One of my favorites is from Charmin, a brand born in 1928. @ProcterGamble created Charmin NFT…. wait for it — P! Yes, Charmin NFTP. The NFTPs raised money for the charity Direct Relief.
Humans have a playful side; we like to be in on the joke, to interact with like-minded people. Brands that create a human connection earn loyalty, referrals, and repeat business.
NFTs can incentivize community building and participation. Token holders can be granted exclusive perks and rewarded for using NFTs; superfans can be given additional airdrops.
Different NFT Use Cases for Fundraising
NFTs have other use cases that can be creatively combined for NFT fundraising, including collectibles, music, gaming, tokens for experiences, real-world assets, and more. You’ll see some examples in action below.
For-profit NFT Fundraising, aka Revenue
Here are some corporations and individuals collecting revenue from NFT projects:
William Shatner of Star Trek fame sold virtual trading cards made from iconic photos from his career. Some included a hardcopy element and could be redeemed for an autograph.
Super rare whiskey NFTs — the company stores the whiskey until the NFT owner claims it.
Artist Krista Kim designed a digital Mars House and sold the NFT for $500,000.
Even on Mars, people need a place to sit down. Argentinian designer Andrés Reisinger sells furniture NFTs for virtual homes in Decentraland or Minecraft. His highest price piece sold for almost $70,000. Five of the NFT designs will be turned into actual objects and sent to the buyers of the NFTs.
The NBA was one of the first to see the potential of NFTs, and they are cashing in big time. A digital clip of LeBron James and Nemanja Bjelica sold for $208,000 as a “Moment” on NBA TopShot.
Coachella is an excellent example of a creative mix of NFT-driven virtual and physical rewards like passes, art prints, photo books, digital collectibles, and more through their Coachella Collectibles NFTs. Coachella donates a portion to Give Directly, Lideres Campesinas, and Find Food Bank, which conveniently leads us to NFTs for NPOs.
NFTs for NPO Fundraising Examples
Even before the current NFT trend, online donations are growing, increasing by 32% from 2019 to 2020. Fundraising platform Fundly projects that the global crowdfunding market will almost triple by 2025.
NPO consultants recommend that NPOs approach NFT fundraising in small steps. Energy-guzzling NFT projects are a potential public relations minefield for environmental non-profits. Greenpeace quit accepting Bitcoin donations last year in May.
The World Wildlife Fund received some backlash for an NFT campaign. They were aware of the environmental dilemma and for the most part, addressed it. I give them props for trying. When I donated to them a few years ago, I wrote a note; Please don’t send me the tacky canvas bag and a stack of Christmas cards I don’t want. Well, I was nicer than that, but even back then, I was thinking, All these mailers and the merchandise in their catalog have a carbon footprint, too.
Below are some examples of NPO NFT fundraising and partnerships:
NFDoge art donates 10% of profits going to Save the Children.
Tim Berners-Lee, one of the inventors of the Internet, raised $5.3 million for his preferred charities by auctioning an NFT of the original Internet source code.
Soccer icon Pelé donated 90% of the profits from an auction of NFT trading cards to his eponymous Pelé Foundation.
Merriam-Webster auctioned an NFT of the definition of an NFT to benefit the nonprofit Teach For All.
A cartoon drawing of a cat-turtle named Honu raised US$25,000 for ocean conservation charities in 2018.
The Bored Ape Yacht Club donated $850,000 from NFT sales to an orangutan charity.
In a fascinating comparison to all the million-dollar high-profile sales, Ellen DeGeneres raised a modest $33,495 for the nonprofit World Central Kitchen. Given her 75 million Twitter followers, that result seems very low compared to crypto kitties and $500k virtual homes on Mars. Part of the reason may be because her mainstream base is not early adopter or techie. So even for Ellen, NFTs fundraisers need to know their audience and plan marketing accordingly.
Political Campaign NFT Fundraising
The cost of running for office adds up, so it’s no surprise that NFTs have caught the eye of candidates.
Blake Masters, a Republican U.S. Senate candidate in Arizona, raised nearly $575000 from selling limited edition NFTs depicting the cover of his book Zero to One.
Political NFTs can be combined with real-life perks and exclusive access to events. Masters held a token-holders party. The real-life events help build community among supporters.
While Republicans lead the pack with early adoption of NFT fundraising, in 2021, Front Row’s Lone Star Collection highlighted the Texas State Representatives who left the state to protest pending voting rights legislation and deny a quorum. House Speaker Dade Phelan signed civil arrest warrants for the AWOL reps, inspiring the “Wanted” poster motif for the NFTs. The first collection sold out.
Tip of the Iceberg for NFT Fundraising
As you can see, we are in the very early stages of using NFTs to raise money, whether for individuals, charity, increased revenue, or some blending of all the above.
While the technology is new, the principles behind a good fundraising campaign are the same. Know your audience, create perks that resonate with them, and wrap your shiny new NFT drop in a solid marketing plan.
At Impactoverse, we know a lot of people and organizations have questions about NFT fundraising. That is one reason we are building out PetDrops NFT, a low-risk, fun way to learn how to create an NFT, and then mint one if you choose! We will also have done-for-you options if you are allergic to tech. Proceeds will benefit animal welfare NPOs. Contact us or check out PetDrops.io (launching soon!) for more info!