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Why Crypto Donations Are Rising in 2024
In 2021, the nonprofit sector has quietly become the most crypto-friendly arena in the world. Millions of dollars have been donated, and thousands of nonprofits have launched active initiatives to collaborate with crypto philanthropists.
When cryptocurrency markets crashed in 2022, the nonprofit sector began to think the crypto philanthropy party was over. After a record-breaking 2021 in which my organization, The Giving Block, facilitated $69 million in crypto donations, crypto-based charitable giving slowed with the FTX crash.
Pat Duffy is a founder of The Giving Block, a platform that helps investors donate cryptocurrency to charities, educational institutions, and faith-based nonprofits. The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
Today, market caps are rising again, and in turn, crypto donations are pouring in. We’ve spent the past few months helping crypto investors donate tens of millions of dollars to charities, faith-based organizations, and universities, from ocean conservation charities to refugee relief organizations.
If anyone thinks this is just business as usual, they are sadly mistaken. Crypto philanthropy is back in a big way. And what makes this wave unique is the diversity of ways to donate, driven by much more than the price of BTC, ETH, etc. Web3’s current charitable trends were built during the last bull cycle, battle-tested and optimized through the bear market, and are now coming of age as the market approaches a period that should break previous all-time highs.
Here are some of the little-discussed ways Web3 and the cryptocurrency community are changing the nonprofit world for the better.
When we launched The Giving Block six years ago, we knew that Bitcoin and Ethereum donors were here to stay. The generosity of meme coin holders, however, surprised us.
Last cycle, we thought the rise of Dogecoin and Shiba Inu donors would be a fad, with DOGE becoming the most donated cryptocurrency in the $30 million Team Seas campaign led by Mr. Beast and Mark Rober. But memecoins remain a very valuable source of charitable funding today. This time, some new memecoins have burst onto the charitable giving scene to make a difference.
The Baby Doge team has donated over $500,000 to support animal shelters and other animal welfare programs around the world. Baby Doge is even launching an API to easily enable cryptocurrency donations from their community, as they seem to have made charity part of their DNA. They even set a Guinness World Record for Most of the donated pet food within 24 hours.
Meanwhile, BONK was one of the most donated cryptocurrencies when the price took off earlier this year, as their community immediately turned gains into impact. The BONK community is in the process of developing an on-chain program and decentralized application that allows users to donate cryptocurrency to animal-focused charities that partner with The Giving Block. The application manages the donation process, burns a small percentage of BONK tokens, and matches the donations. We are thrilled that a community that has seen an 8,000% increase in their investment in the last twelve months has been inspired to make a long-term commitment to charity.
We’ve always said that crypto philanthropy is a two-way street. Meme coin projects demonstrate how crypto communities grow by funding social causes, creating a mutually beneficial cycle of growing awareness for the token and the cause they support. But these relationships don’t exist in a vacuum. Some philanthropic strategies coming out of Web3 have a real opportunity to change the way traditional nonprofits systematically raise money, as some organizations have begun to embrace quadratic funding.
Ethereum co-founder Vitalik Buterin is known to have co-devised quadratic financing, which has been called a “mathematically optimal way to finance public goods in a democratic community.” Over time, it has become one of Web3’s favorite ways to fund projects of all kinds.
In December 2023, the Gitcoin community quadratic funding round raised 2,971 donations from 1,058 donors at finance six projects that will help advance the lifesaving work of the American Cancer Society.
For nonprofits looking for ways to engage new donor communities, quadratic funding represents a way forward, a way to break the mold of traditional fundraising methods and embrace innovation.
Similarly, more and more humanitarian organizations have been experimenting with distributing aid via stablecoins, from UNHCR to Mercy Corps Ventures. With each test, the impact sector is getting closer to adopting more promising use cases for cryptocurrency and blockchain.
We are also seeing the legacy of NFT fundraising continue. During the last bull market, innovative projects like Women and weaponswho donated six figures to the Malala Fund, which supports girls’ education, has set the stage for a culture of charitable giving. We’ve even seen major charities and global brands collaborate on NFT initiatives, such as when Stella Artois brewery tapped Gary Vaynerchuk’s Vayner3 to launch an NFT drop in support Water.orga group that promotes clean water and sanitation initiatives
Today, bitcoin-based ordinal projects like NodeMonkes are expanding the boundaries of NFT charitable giving. Creators like Jack Butcher have given collectors the tools to understand the positive impact they have with every NFT purchase.
We have also seen a rise in Web3 influencers asking their communities to donate cryptocurrency for good. One example is the Crypto Twitter personality known as Leap, who raised over $100,000 in Ethereum and Solana donations for cancer care and research.
Billions of dollars have been donated to nonprofits via cryptocurrency, and tens of billions of dollars will be donated as the market matures and donors take advantage of the tax breaks it offers. As a result, cryptocurrency fundraising has become a major focus in the nonprofit sector, and as cryptocurrency continues to grow as a major asset class, nonprofits will continue to bet on cryptocurrency donors as a pillar of their strategies to thrive through the Great Wealth Transfer from older generations to Millennials and Zoomers.
Some nonprofits will find the kaleidoscopic diversity of the cryptocurrency donor community daunting. Despite the fact that most of the Forbes top 100 nonprofits are raising money in cryptocurrency today, many small and medium-sized nonprofits aren’t even equipped to accept major assets like Bitcoin and Ethereum, let alone things like NFTs and meme coins.
The forward-thinking philanthropists of the Web3 ecosystem will continue to provide incredible opportunities for forward-thinking nonprofits. These efforts will set the stage for some of the most exciting cryptophilanthropy programs in the years to come. But I’m equally excited about the cryptophilanthropists who are slowing down to meet charities where they are.
With more and more nonprofits embracing cryptocurrency, crypto investors who take the time to educate their favorite organizations on the fundamentals of Web3 will play one of the most important roles in driving continued adoption in this space.
Today more than ever there are more nonprofits raising funds through cryptocurrency, but that’s only thanks to the people in the Web3 community who continue to step up and donate and seize the opportunities that draw them to our industry.
The current trifecta of nonprofit adoption, Web3 innovation, and bullish market conditions has set us up for the most exciting chapter in crypto philanthropy yet. And if we continue to be innovative in our philanthropic projects, patient with our philanthropic partners, and generous with our philanthropic contributions, crypto will remain one of the fastest-growing methods of giving in the nonprofit sector.