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.
“Philanthropy has traditionally been viewed as a high-cost individual activity but with Web 3, collective decision-making bodies such as DAOs can use tools that simplify financial coordination and encourage more participation,” explained Omar Antilla, Head of Product at Crypto. for charity.
He added, “Crypto enables new and innovative fundraising strategies, such as charitable NFT-drop campaigns, or allowing people to pool their crypto money in decentralized finance (DeFi) protocols that earn interest for a specific cause.”
In October, a number of breast cancer-focused organizations began implementing NFTs to highlight Breast Cancer Awareness Month.
Antilla noted that he’s seen many other charitable communities built around non-fungible tokens (NFTs), which have raised support for many other causes in need, such as testicular cancer, human trafficking, and the war in Ukraine.
Last year, the decentralized autonomous organization UkraineDAO funded $6.1 million to acquire a non-fungible token (NFT) for the Ukrainian flag 1/1. The proceeds were intended for non-profit organizations in Ukraine to help those affected by the Russian invasion.
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 main cryptocurrencies for donations:
“However, over time, we will see institutions accepting a much larger spread of tokens — similar to the way they would accept gifts of securities. We will also see gifts of NFTs and other tokenized assets such as real estate or collectibles.”
“I think so once […] She added that more organizations are realizing the charitable potential of this donor segment, and each organization will have a digital 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, to transact, and to 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
This may be especially true for countries that experience a lack of confidence in their nation’s monetary system, where cryptocurrency adoption rates are also higher.
Connelly said that adoption rates are highest in non-developed 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.