Using Cryptocurrency for Charitable Fundraising
The rise of cryptocurrency has revolutionized various sectors of the economy, and fundraising for charitable causes is not an exception. The use of digital or virtual currencies such as Bitcoin, Ethereum, and Ripple for fundraising has gained significant traction worldwide. Thanks to the decentralized nature of blockchain technology, cryptocurrency fundraising offers a plethora of benefits, including transparency, security, and global reach.
Today, a majority of the organizations included in Forbes´ Top 100 Charities List accept cryptocurrency donations – a clear signal that cryptocurrency donations are now definitely a mainstream occurance. One notable moment that helped increase mainstream awareness of the possibilities of combining cryptocurrency and charitable projects occurred live on the Ellen DeGeneres Show in 2017, when the actor Ashton Kutcher – backed by Ripple – donated $4 million in XRP to Ellen DeGeneres Wildlife Fund.
What Is Cryptocurrency Fundraising?
Cryptocurrency fundraising for charitable causes entails raising funds in cryptocurrency instead of traditional currency. Essentially, donors contribute digital currency instead of traditional currency.
If you are looking to learn more about cryptocurrency fundraising, The Giving Block – a Shift4 company – is a good resource, since they release annual reports focused on crypto philanthropy. In their the 2024 Annual Report, they showed how over $2 billion in cryptocurrency had been donated to charitable causes during the previous five years, and that the most donated cryptocurrencies in 2023 were USDC (a stablecoin), Bitcoin, and Ether (Ethereum).
Real-world Examples
Feeding the hungry
The artist and digital entrepreneur Jack Butcher has launched several cryptocurrency fundraisers and many of them have shined a spotlight on the possibilities of utilizing non-fungible tokens (NFTs) for philanthropic causes. Through the Jack Butcher fundraisers, the eqvivalent of hundreds of thousands of USD have been donated to non-profit organization such as CARE and Feeding America to run food programs and battle food scarcity in the United States. Some of the fundraisers have focused on other countries, e.g. fundraisers to provide food and other basic necessities to women and children in Afghanistan.
Supporting Ukraine
When the Russian invasion of Ukraine escalated into full-blown war in early 2022, several Decentralized Autonomous Organizations (DAOs) formed to carry out cryptocurrency fundraisers for charitable causes in support of the Ukraine. One of them, simply named UkraineDAO, has been able to donate over $7 million in cryptocurrency to recipients such as the Ukrainian Government, the organization Come Back Alive (savelife.in.ua/en), and the Outright International´s Ukraine Fund for the LGBT community.
Helping Maui after the devasating fires of 2023
In August 2023, a series of wildfires caused massive destruction and over a hundred deaths on Maui, Hawaii. Many charitable efforts helping the survivors accepted donations in cryptocurrency, and Ripple announced that they would match the crypto donated to the Maui Emergency Response Fund up to $50,000. Then, Jared Isaacman of Shift4 announced that they would also match the donations. Therefore, $50,000 donated from the public turned into $150,000 in relief aid for Maui.
Advantages of Cryptocurrency Fundraising
1. Global Reach: Cryptocurrency, being a borderless mode of transaction, allows fundraisers to reach a global audience. It eliminates geographical restrictions often associated with traditional fundraising methods.
2. Lower Transaction Costs: Cryptocurrency transactions have relatively low processing fees compared to traditional bank transfers or payment cards, making it a cost-effective fundraising method.
3. Speed: Due to the absence of intermediaries or banks, cryptocurrency transactions are processed relatively quickly, regardless of the amount or destination.
4. Transparency and Trust: With blockchain technology, transactions are recorded on a public ledger, enhancing transparency and creating trust among donors or investors.
Steps to Fundraise Using Cryptocurrency
1. Identify the Right Cryptocurrency or Cryptocurrencies: With over 5,000 cryptocurrencies available in the market, identifying the right one for your fundraising can be challenging. Consider factors like market capitalization, liquidity, and community support.
2. Set Up a Cryptocurrency Wallet: A digital wallet is required to receive and store cryptocurrencies. Choose a reliable wallet that supports your selected cryptocurrency and has robust security measures.
3. Inform Yourself About the Legal Situation: To avoid legal issues, it is always a good idea to seek out information prior to a fundraising campaign. It’s vital to understand and comply with applicable laws to avoid legal complications.
4. Communicate Your Cause: Launch a compelling campaign explaining what the fundraising is for. Provide complete transparency about how the funds will be utilized to build trust with potential donors.
5. Promote Your Fundraising Campaign: Promote your campaign on social media, blogs, cryptocurrency forums, and other platforms. Engage with the community, answer queries, and maintain an active presence to attract more donors.
Conclusion
While cryptocurrency fundraising provides numerous benefits, it’s important to remember that it’s a relatively new concept and comes with its own set of risks and challenges. Therefore, it’s crucial to conduct thorough research, understand the market dynamics, and comply with legal norms to effectively leverage cryptocurrency for fundraising.
Indeed, as the digital landscape continues to evolve, cryptocurrency serves as an exciting, innovative tool for businesses, NGOs, and entrepreneurs to fundraise. Embracing this novel fundraising approach can open doors to global opportunities and take your campaign to new heights.