The wide-reaching nature of crypto means that the total addressable market for crypto charity is huge with new technologies transforming the way funds are raised and distributed to those in need, and providing innovative ways for crypto philanthropists to support causes they care about.
Non-Fungible Tokens (NFTs)
Philanthropic communities built around NFTs have raised support for many other causes such as testicular cancer, human trafficking, and the war in Ukraine. In 2021, UkraineDAO crowdfunded $6.1 million for a 1/1 Ukrainian flag NFT. The proceeds were donated to nonprofit organizations in Ukraine helping those affected by the Russian invasion. Another example of this is the breast cancer awareness foundation creating an NFT collection on OpenSea to highlight Breast Cancer Awareness Month.
Anne Connelly, the co-author of “Bitcoin and the Future of Fundraising,” believes that organisations will start accepting a much broader spread of tokens than just Bitcoin and Ethereum, similar to how they would accept gifts of securities. Gifts of NFTs and other tokenized assets such as real estate or collectibles could also soon be another avenue for giving.
Decentralized Autonomous Organizations (DAOs)
DAOs can use tools that streamline financial coordination and encourage more participation by allowing donors to have a greater say in how their contributions are used. In a DAO, members can vote on proposals for how the funds will be distributed, ensuring that the community’s priorities and values are reflected in the charity’s work. This also creates a greater sense of ownership and accountability among donors, as they are directly involved in decision-making.
Decentralized Finance (DeFi)
According to Omar Antila, Product Lead at Crypto for Charity, the 2 billion unbanked adults that exist in the world today will soon have the tools to participate in the global economy, transact, and create wealth without third parties getting in the way or taking a cut. This is especially true for countries suffering from a lack of trust in their state’s monetary system, such as Nigeria, Argentina, Vietnam and South Africa where crypto adoption rates are the highest. Having the choice to use crypto is an important option for citizens and also shows governments that if they want people to use their fiat currency, they will need to clean up their act.
Crypto enables new fundraising strategies, like charitable NFT-drop campaigns, or allowing people to pool their crypto funds in DeFi protocols that earn interest for a specific cause. As the adoption of these technologies continues to grow, we can expect to see more and more organizations using them to support their causes and philanthropy becoming more inclusive, transparent, and efficient.