Non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and decentralized finance (DeFi) are redefining how charities collect donations and distribute money to those who need it most.
With ever-evolving cryptocurrency and blockchain-related technology, crypto-philanthropists told Cointelegraph that they have seen “new wealth distribution mechanisms” never seen before.
Omar Antilla, product lead at Crypto for Charities explained.
He added, “Crypto enables new and innovative fundraising strategies, such as charitable NFT-drop campaigns, or allowing people to pool their crypto funds into DeFi protocols that earn interest for a cause.”
In October 2022, several breast cancer-focused organizations began implementing NFTs to highlight Breast Cancer Awareness Month.
Antilla noted that he has seen many other charitable communities built around NFTs, which have raised support for many other causes in need, such as testicular cancer, human trafficking, and the war in Ukraine.
Last year, ODAO Ukraine crowdfunded $6.1 million for a 1/1 of a Ukrainian flag NFT. The proceeds were donated to non-profit organizations in Ukraine to help those affected by the Russian invasion.
Blockchain technology is poised to expand what is currently possible in the non-profit sector. Source: Moralis.io
Meanwhile, Anne Connelly, co-author of “Bitcoin and the Future of Fundraising,” believes that the crypto-philanthropy sector will soon expand with Bitcoin (BTC) and Ether (ETH) as the leading cryptocurrencies for donations:
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“However, over time, we will see institutions accepting a much larger spread of tokens — similar to the way they accept gifts of securities. We will also see gifts of NFTs and other tokenized assets such as real estate or collectibles.”
She added, “I believe that once more organizations […] realize the charitable potential of this donor segment, every organization will have an encrypted donation platform, in the same way that every organization accepts credit cards.”
The large-scale nature of cryptocurrency means that the total addressable market for crypto-charity is also huge, Antilla said.
Antilla believes that the “two billion or so unbanked adults in the world today” will soon have the tools to “participate in the global economy, transact and create wealth without a third party getting in the way or taking a cut.”
Related: Charities risk losing a generation of donors if they don’t accept cryptocurrency
More and more people and small businesses in developing countries are implementing Bitcoin and crypto for payments. Source: Cointelegraph.
This may be especially true for countries with a lack of confidence in their nation’s monetary system, where crypto adoption rates are also the highest.
Connelly said that adoption rates are highest in underdeveloped countries – most notably Nigeria, Argentina, Vietnam and South Africa – because they simply cannot trust their nation’s monetary system:
“More than half of the world’s population lives under double, triple or quadruple rates of inflation. For most people, they cannot trust their governments to manage the monetary system effectively.
“Choosing to use cryptocurrency is an important choice for citizens, but it also shows governments that if they want people to use their fiat currency, they need to clean up their act,” she added.