The holidays are the perfect time of year to give back, and the rise of cryptocurrencies has created even more opportunities for charitable initiatives. This was highlighted during Giving Tuesday 2021, the Tuesday after Thanksgiving that Raised over $ 2.4 million in cryptocurrency from the non-profit fundraising platform The Giving Block.
As crypto-philanthropy becomes a new subsector of the cryptocurrency economy, some in the industry believe that crypto donations will only keep increasing. Alex Wilson, co-founder of The Giving Block, told Cointelegraph that the organization raised about $ 4 million in crypto donations last year, noting that it is likely to receive over $ 100 million in crypto donations this year.
According to Wilson, this growth is partly due to the fact that donating crypto is more tax efficient than fiat donations. “Anyone who donates before December 31st can claim a deduction for the 2021 tax year. This is a great way to offset some of your profits. ”Wilson added that there are currently over 1,000 nonprofits accepting crypto donations through The Giving Block, including St. Jude, Save the Children and United Way. “Over the next year we have a lot of partnerships going live and we expect our growth to accelerate. We expect to process nearly $ 1 billion in donations next year and partner with over 6,000 nonprofits. “
Cryptocurrency donation campaigns for the holidays
While a number of nonprofits have started accepting cryptocurrency donations, it’s also noteworthy that campaigns related to philanthropy in cryptocurrency are being launched this holiday season.
For example, Upbring Innovation Labs – a Texas-based organization dedicated to advancing technology in the nonprofit sector – launched the Give Big TX Crypto Fund in early December. Ryan Park, Upbring’s vice president of innovation, told Cointelegraph that the fund is a collaborative cryptocurrency campaign that works with twelve Texas-based nonprofits:
“You can think of this as a ’cause fund’. The reason here is to make Texas a better place to live. It’s also about showing nonprofits that they can use new Web 3.0 technologies to move forward. The overall goal is to see Texas as a leader in crypto-philanthropy. ”
Park shared that the Give Big TX Crypto Campaign is working with organizations like Austin Pets Alive, Big Brothers Big Sisters Lonestar, Catholic Charities of Central Texas, and eight other nonprofits. He added that the Texas Blockchain Council – a 501C (6) organization – is also part of this initiative given the group’s involvement in advancing blockchain across various industries in Texas.
Kelsey Driscoll, chief innovation program strategist at Upbring, told Cointelegraph that the campaign will accept over 40 different types of cryptocurrencies for donation through December 31, all of which will be supported by The Giving Block. “When donations are made, The Giving Block automatically converts them to US dollars, so accepting crypto has been as easy, if not easier, as accepting fiat donations,” she noted. Driscoll added that the subreddit group r / Bitcoin with Bitcoin (BTC) Donations when donations are made to any of the charities supported by The Giving Block.
Pawthereum, a decentralized community project to support animal shelters, also launched a nonprofit cryptocurrency campaign this month. Pawthereum community manager John Weathers told Cointelegraph that his 12 Days of Crypto Giving campaign enables crypto donations to be made for specific projects that help animals in need. The Pawthereum project was created as a fork of the Grumpy Cat Coin meme cryptocurrency projectwho raised $ 70,000 in cryptocurrency for the Sterling Animal Shelter in Massachusetts.
Most recently, Pawthereum raised $ 25,000 through crypto donations for Muttville Senior Dog Rescue, a San Francisco-based animal shelter that cares for dogs with special needs. Almost $ 400,000 worth of crypto has been donated since the campaign started on Dec. 14, according to Weathers.
Non-fungible tokens or NFTs will also be used for donations this year. Given that the market is growing for the sale of NFTs expected to reach $ 17.7 billion By the end of 2021, this sector is kicking off one of the biggest crypto charities this season. Known as Right-Click, Give !, this is a public auction hosted on the NFT OpenSea platform. The auction ran through December 24th and all proceeds will be donated to Blankets of Hope, a charity that provides warm blankets to the homeless while teaching kindness to children at school.
Mike Fiorito, co-founder of Blankets of Hope, told Cointelegraph that, as an avid NFT collector, he is well aware of how welcoming the NFT community as a whole is. Hence, he believes that more NFT-focused charity campaigns will emerge. “There are a lot of nice people in the NFT space who make a fortune – no matter how big or small – and want to give something back,” he said.
Park also noted that the Give Big TX Crypto Campaign allows NFT artists to work directly with nonprofits to donate proceeds from minting non-fungible tokens. “Many artists who do NFT drops want to work with nonprofits, and this is an opportunity to do so. We have two NFT projects that donate proceeds from their mints to our fund. ”
Will charitable crypto campaigns catch on?
While there are only a handful of charitable crypto campaigns currently in existence, the benefits associated with cryptocurrency donations can cause mainstream adoption to advance.
While US donors do not have to pay capital gains tax Any crypto assets you donate to a registered nonprofit have other technological benefits. For example, Pawthereum community leader Nawzad Amiri told Cointelegraph that the transparency a blockchain network provides, along with the speed of transactions, is impressive when it comes to crypto donations versus fiat.
Also statistics from The Giving Block found that cryptocurrency donors may be willing to donate more to charity, and that $ 11,000 is the average cryptocurrency donation size on The Giving Block. Giving USA donation data found that $ 737 was the average American charity donation in 2020.
While the benefits may be clear to some, education seems to be the biggest challenge hindering adoption. For example, even though Texas is growing in one of America’s largest crypto capitals due to his friendly attitude towards blockchain and Mining power skills, Park shared that Texas nonprofits were having a hard time engaging the Give Big TX Crypto campaign:
“We have reached out to about 60 nonprofits and work with a total of 12. It seems like this was a shoo-in, but there is still a long way to go in enlightening the world about the potential of crypto-philanthropy. “
Another challenge worth mentioning is that while NFTs may seem like ideal donation assets, there is uncertainty about tax deductions. Fiorito stated that he is still trying to determine if the donation will be considered a tax deductible event by NFTs. “This is a cloudy area because we are in the NFT room so early,” he commented. Because of this uncertainty, the right click, Give! Auction also accepts cryptocurrency donations through The Giving Block.
Challenges aside, it’s clear that crypto-philanthropy has opened up new opportunities for a generation eager to give back. For example, Park pointed out that many of the nonprofits partnering with the Give Big TX Crypto Campaign have a donor base that is over 70 years old. To According to statistics from The Giving Block, the median age of crypto users is 38, as Wilson added:
“The people who donate here are people who live and breathe Web 3.0 or who have owned crypto for a long time. A big part of it now is educating these people that this possibility exists. ”