Markets
Why Crypto Donations Are Rising in 2024
In 2021, the nonprofit sector quietly became the most crypto-friendly arena in the world. Millions of dollars were being donated, and thousands of nonprofits had active initiatives to partner with crypto philanthropists.
When crypto 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 when FTX collapsed.
Pat Duffy is the co-founder of The Giving Block, a platform that helps investors donate crypto to charities, educational institutions, and faith-based nonprofits. The opinions 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 aid organizations.
If anyone thinks this is simply business as usual, they are sadly mistaken. Crypto philanthropy is back in a big way. And what makes this surge unique is the diversity of giving modalities, driven by much more than the price of BTC, ETH, and so on. The current Web3 charitable giving trends were built during the last bull cycle, battle-tested and optimized by the bear market, and are now reaching maturity as the market approaches an expected period of breaking 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 passing fad, with DOGE becoming the most donated cryptocurrency in Team Seas’ $30 million campaign led by Mr. Beast and Mark Rober. But memecoins remain a genuinely valuable source of charitable funding today. This time around, some new memecoins have emerged 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 crypto donations from their community, as they seem to be making charitable giving a part of their DNA. They even set a Guinness World Record for more pet food donated in 24 hours.
Meanwhile, BONK was one of the most donated cryptocurrencies when the price took off earlier this year, as its community immediately turned gains into impact. The BONK community is in the process of developing an on-chain program and decentralized app that allows users to donate crypto to animal-focused charities working with The Giving Block. The app handles the donation process, burns a small percentage of BONK tokens, and matches donations. We’re excited that a community that has increased its investment by 8,000% in the last twelve months has been inspired to make a long-term commitment to charitable giving.
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 increasing awareness of 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 how traditional nonprofits systematically raise funds, as some organizations have begun to embrace quadratic funding.
It is well known that Ethereum co-founder Vitalik Buterin was the co-creator of quadratic finance, 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 methods of funding projects of all kinds.
In December 2023, the Gitcoin Community Quadratic Funding Round raised 2,971 donations from 1,058 donors to finance six projects that will further the life-saving work of the American Cancer Society.
For nonprofits looking for ways to engage new donor communities, quadratic funding presents a path forward, a way to break the mold of traditional fundraising methods and embrace innovation.
In a similar vein, more and more humanitarian organizations have been piloting aid delivery via stablecoins, from UNHCR to Mercy Corps Ventures. With each trial, the impact sector is moving closer to embracing more of crypto and blockchain’s most promising use cases.
We’re also seeing the legacy of NFT fundraising continue. During the last bull market, innovative projects like Women and Weaponsdonating six figures to the Malala Fund, which supports girls’ education, set the stage for a culture of charitable giving. We’ve even seen major charities and global brands collaborate on NFT initiatives, as was the case when beer company Stella Artois chose Gary Vaynerchuk’s Vayner3 to launch an NFT drop to support Water.orga group that promotes clean water and sanitation initiatives
Today, mainstream bitcoin-based projects like NodeMonkes are pushing the boundaries of NFT charitable giving. Creators including Jack Butcher have empowered collectors to understand the positive impact they make with each NFT purchase.
We’ve also seen a rise in Web3 influencers asking their communities to donate crypto for good. One example is the Crypto Twitter personality known as Leap, who raised over $100,000 in Ethereum and Solana donations for cancer treatment and research.
Billions of dollars have been donated to nonprofits using cryptocurrencies, 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, crypto fundraising has become a major focus in the nonprofit sector, and as crypto continues to grow as a major asset class, nonprofits will continue to rely on crypto donors as a cornerstone 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 crypto donor community daunting. Despite the fact that most of the Forbes 100 largest nonprofits are fundraising with crypto today, many small and mid-sized nonprofits aren’t even equipped to accept major assets like Bitcoin and Ethereum, let alone navigate topics like NFTs and meme coins.
Forward-thinking philanthropists across the Web3 ecosystem will continue to provide incredible opportunities for nonprofits at the forefront. These efforts will set the stage for some of the most exciting crypto-philanthropy programs in the years to come. But I’m equally excited about crypto-philanthropists who are slowing down to find charities where they exist.
With more nonprofits accepting cryptocurrencies than ever before, cryptocurrency investors who take the time to educate their favorite organizations on the fundamentals of Web3 will play one of the biggest roles in driving continued adoption in this sector.
There are more nonprofits raising funds for crypto today than ever before, but that’s only thanks to the people in the Web3 community who continue to step up and make donations and opportunities that draw them into 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 philanthropic projects, patient with our philanthropic partners, and generous with our philanthropic contributions, crypto will remain one of the fastest-growing giving methods in the nonprofit sector.