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Charities risk losing a generation of donors if they don’t accept crypto

Crypto donations expose charities to a "new demographic of funders" that they can’t afford to miss out on.

Charities accepting crypto donations are setting themselves up for an entirely new demographic of funders — who just so happen to be one of the most giving, according to charity organizations. 

Alex Wilson, the co-founder of The Giving Block, a crypto donation platform providing back-end support to charities, told Cointelegraph that the crypto community is still a market many charity organizations have nointeracted with.

The top charity organizations in the world by funds received including United Way Worldwide, Feeding America, and UNICEF. All three of them accept cryptocurrencies as a means of donation.

The Giving Block co-founder said the crypto community has been great with the “philanthropic use” of cryptocurrency, and those crypto donors are also some of the “most generous” — with the average gift being over $10,000.

UNICEF Australia New Product and Innovation Lead Zunilka Whitnall said it was important that charities implement blockchain technology to make their fundraising more transparent to the general public. She also noted that the technology will also give them access to a “new demographic of funders.”

Whitnall however noted that there is a “gap in understanding” of what blockchain is and how they work for many charity organizations.

Bryce Thomas, co-founder of Tokens for Humanity, an organization developing blockchain applications for the charity sector told Cointelegraph that the majority of cryptocurrency holders and users are between the ages of 18 to 35 — a demographic which is difficult for many charities to engage with.

Thomas said blockchain integration “solves the problem” of donor engagement with younger demographics.

He also noted that there has been a “resurgence” of interest in tracking and reporting the impact of nonprofits and that blockchain technology would enable a clearer way for transparency and accountability.

UNICEF’s Whitnall said its current focus with blockchain technology is improving its efficiency in distributing resources globally, as well as making its internal operations more efficient and transparent to the wider community.

Related: NFTs and crypto provide fundraising options for breast cancer awareness

Cryptocurrency has been a popular means of giving to charitable causes. Ether (ETH) was the most-donated cryptocurrency in 2021, totaling $30.79 million in donation volume via The Giving Block.

This year, crypto donations has most notably been a major lifeline for Ukraine’s defense against Russia, with the Ukrainian government spending $54M of crypto donations on military equipment, hardware, munitions amongst other defense equipment.

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UNICEF Giga NFTs to connect schools in developing countries to internet

The popularity of NFTs drives fundraising experiments for UNICEF's Giga initiative to connect more schools around the world to the internet.

Developed countries often take for granted the ubiquity of the internet. But the reality is that some 2.9 billion people still don’t have connectivity to the world wide web.

Data provided by UNICEF highlights that the majority of this internet-less mass of people reside in undeveloped countries, and children continue to be disadvantaged by the lack of internet connectivity at local schools.

A UNICEF-led initiative is tackling this dilemma in a novel way through a joint venture with the International Telecommunication Union that led to the creation of Giga in 2019.

Gerben Kijne, blockchain product manager at Giga, outlined the firm’s Project Connect initiative at the Blockchain Expo in Amsterdam. Giga has made strides in connecting schools to the internet in developing countries around the world.

Gerben Kijne speaks about Giga's Project Connect and its Patchwork Kingdoms NFT fundraising experiment at the Blockchain Expo in Amsterdam.

The first step in this process was mapping schools and their connectivity through Project Connect. Giga uses machine learning to scan satellite images to identify schools on an open-source map. To date, it has pinpointed over 1.1 million schools across 49 countries and connectivity data for a third of these schools.

Having identified a huge number of schools in need of internet accessibility, the next step in the process was creating a novel fundraising initiative tapping into the world of blockchain, cryptocurrencies and NFTs.

Speaking to Cointelegraph after his keynote address at the RAI Convention Centre in Amsterdam, Kijne unpacked Giga’s Patchwork Kingdoms initiative. With NFTs surging in popularity over the past couple of years, Giga looked to make the most of the craze through its own NFT-led fundraising experiment in March 2022.

Giga teamed up with Dutch artist Nadieh Bremer to launch a collection of 1000 procedurally generated NFTs minted on the Ethereum blockchain. The NFTs were produced using Giga’s school data to represent those with and without internet connectivity.

The NFT public sale raised around 240 Ether (ETH) in totality, valued at $700,000, which went directly to connecting schools to the internet. Kijne conceded that the value raised was secondary to the exploration of a different kind of philanthropic fundraising.

“I think NFTs also provide a really interesting use case. One of the things that we're starting to look into is what does philanthropy look like for the next generation of people? Because if you go to UNICEF now and you donate, I don't even know what you get, probably like a ‘thank you email’ or something.”

Kijne believes that NFTs can provide a closer connection to donations, highlighting their use to track the impact of donations through the ownership of a specific school’s NFT and monitor when the funds raised are ‘cashed in’ to pay for internet connectivity.

Many learnings were taken out of the NFT-based fundraising initiative. As Kijne reflected, building a community before the launch may well have helped boost support. As has been seen in the NFT space, community members play a role, but opportunistic NFT investors are always present and looking for a chance to profit from new launches.

“I think quite a few people that sort of joined us, they formed one of two camps. We have the people we were aiming for, Giga supporters. Many bought their first NFT ever. Then the other group is people who are thinking, ‘Oh, a UNICEF NFT! Let me get on that.'”

Despite that fact, the project was deemed a success and provides an intriguing use case for blockchain-based NFTs as a means of transparent, community-building fundraising. The public sale in March 2022 sold out in three hours and raised $550,000. The additional 20 percent of funds raised came from secondary sales on OpenSea.

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