The holidays are a great time to give back. And the rise in popularity of cryptocurrencies has opened up even more avenues for charitable endeavors. This was highlighted during Giving Tuesday 2021, the Tuesday after Thanksgiving which saw over $2.4 million raised in cryptocurrency from the nonprofit fundraising platform The Giving Block.
As cryptophilanthropy is a new sector of the cryptocurrency economy, many in the industry believe that crypto donations are only going to rise. Alex Wilson, co-founder of The Giving Block, told Cointelegraph that last year the organization raised about $4 million in crypto donations, noting that this year, over $100 million in crypto donations will likely be received. Wilson believes that crypto donations are more tax-efficient than fiat donations. “Anyone who donates before December 31 is able to claim a deduction for the 2021 tax year. This is a great way to offset some of your gains.” Wilson added that over 1,000 nonprofits currently accept crypto donations through The Giving Block, a few of which include St. Jude, Save the Children and United Way. We expect to grow our partnerships and have many more in the future. We’re estimating that we’ll process nearly $1 billion in donations next year and work with over 6,000 nonprofits.”
Cryptocurrency giving campaigns for the holidays
While a number of nonprofits have started to accept crypto donations, it’s also notable that campaigns centered around cryptocurrency philanthropy are being launched this holiday season.
For example, Upbring Innovation Labs, a Texas-based nonprofit that aims to improve technology in the nonprofit sector, launched the Give Big TX Crypto Fund in December. Ryan Park, vice president of innovation of Upbring, told Cointelegraph that the fund is a joint cryptocurrency campaign working with twelve Texas-based nonprofits:
“You can think of this as a ’cause fund.’ The cause here is to make Texas a better place to live. It’s also about showing non-profits how they can adopt Web 3.0 technologies in order to grow. The overall goal is to make Texas a leader in cryptophilanthropy.”
Park said that the Give Big TX cryptocurrency campaign partners with eight organizations, including Austin Pets Alive and Big Brothers Big Sisters Lonestar. He added that the Texas Blockchain Council — a 501 C (6) organization — is also part of this initiative given the group’s involvement in advancing blockchain throughout different industries in Texas.
Kelsey Driscoll, senior innovation program strategist at Upbring, further told Cointelegraph that the campaign will be accepting over 40 different types of cryptocurrencies for donations through Dec. 31, all of which are facilitated by The Giving Block. She noted that “When donations are made, The Giving Block converts them automatically to United States dollars so accepting crypto has been as simple as accepting fiat donations.” Driscoll added that the subreddit group r/Bitcoin will be matching Bitcoin (BTC) donations when contributions are made to any of the charities supported by The Giving Block.
Pawthereum, a decentralized community-run project supporting animal shelters, has also launched a charitable cryptocurrency campaign this month. John Weathers, community manager for Pawthereum, told Cointelegraph that its 12 Days of Crypto Giving campaign allows for crypto donations to be made for specific projects that help animals in need. The Pawthereum project was created as a fork of the meme cryptocurrency project Grumpy Cat Coin, which raised $70,000 in crypto funds 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 caring for dogs with special needs. According to Weathers, close to $400,000 worth of crypto has been donated since the campaign was launched on Dec. 14.
Nonfungible tokens, or NFTs, are also being leveraged for donations this year. Given that the market growth for NFTs sales is expected to reach $17.7 billion by the end of 2021, this sector is launching one of the largest crypto charity events this season. This auction, known as Right-Click!, is open to all and hosted by Opensea, a NFT platform. The auction ran through Dec. 24, and all proceeds will be donated to Blankets of Hope, a charity that provides warm blankets to the homeless while also teaching kindness to children in school.
Mike Fiorito is the co-founder of Blankets of Hope. He said that he has been an avid NFT collector and is aware of the welcoming nature of the NFT community as a whole. He believes there will be more NFT-focused charities. He said that there are many kind people working in the NFT industry who are making big money and want to help others.
Park pointed out that the Give Big TX crypto campaign allows NFT artists to directly work with nonprofits in order to donate profits from nonfungible tokens. “Many NFT artists are interested in working with nonprofits. This is an opportunity for them to do so.
Do charitable crypto campaigns have a future?
Although there are currently only a handful of charitable crypto campaigns present, the benefits associated with cryptocurrency donations may result in mainstream adoption moving forward.
While U.S. donors don’t have to pay capital gains taxes on any crypto assets they donate to a registered nonprofit, there are other technological advantages. Cointelegraph spoke with Nawzad, a Pawthereum community leader, to say that crypto donations are more transparent than fiat.
Moreover, statistics from The Giving Block found that crypto donors may be willing to contribute more to charity, noting that $11,000 is the average cryptocurrency donation size on The Giving Block. Donation data from Giving USA found that $737 was the average charity donation for Americans in 2020. While the benefits are obvious to some, adoption seems to be the greatest challenge. For example, although Texas is growing into one of America’s biggest crypto capitals due to its friendly stance toward blockchain and mining power capabilities, Park shared that it has been challenging to bring Texas nonprofits on to the Give Big TX Crypto campaign:
“We reached out to about 60 nonprofits and are partnering with 12 total. It seems like this would have been a shoo-in but there is still a long way to go in terms of educating the world on the potential of crypto philanthropy.”
Another challenge worth mentioning is that while NFT’s may appear as ideal donation assets, there is uncertainty regarding tax deductions. Fiorito stated that he is still trying determine whether donating NFTs can be tax-deductible. Fiorito commented that it was a confusing area as we are still early in the NFT space. This uncertainty is why the Right-Click! Give! Auction accepts cryptocurrency donations via The Giving Block.
Related: Biggest NFT drops and sales in 2021
Challenges aside, it’s clear that crypto philanthropy has opened a new door of opportunities to a generation eager to give back. For instance, Park pointed out that the donor base for many of the nonprofits partnering with the Give Big TX Crypto campaign is over the age of 70. According to statistics from The Giving Block, the average age of crypto users is 38 years old, as Wilson added:
“The people donating here are individuals that live and breathe Web 3.0 or that have held crypto for a long time. A big piece of this now is just educating those people that this opportunity exists.”