Why Crypto Donations Are Surging in 2024

In 2022, when cryptocurrency markets experienced significant downturns, nonprofit organizations began to question if the boom in crypto philanthropy had come to an end. Previously, in a groundbreaking 2021, my organization, The Giving Block, played a pivotal role in processing $69 million worth of charitable donations in cryptocurrencies. However, this trend was disrupted as FTX, a major player in the crypto sector, faced collapse.

Pat Duffy is a cocreator of The Giving Block, a service that facilitates cryptocurrency donations to charities, schools, and religious organizations. This article represents the author’s perspective; it doesn’t necessarily align with CoinDesk, Inc.’s views or those of its proprietors and associates.

As a researcher studying the current market trends, I’ve noticed an uptick in market caps leading to a surge in cryptocurrency donations. Over the past few months, my team and I have been facilitating large-scale crypto donations towards various causes such as ocean conservation charities, refugee aid organizations, and universities.

As a researcher studying the latest developments in cryptocurrency philanthropy, I can assure you that this is not just another routine phase in the industry. On the contrary, crypto giving is experiencing a significant resurgence with a distinct twist. The reasons for this surge extend far beyond the price fluctuations of Bitcoin, Ethereum, and other digital currencies.

As a researcher exploring the intersection of Web3 and the crypto community with the nonprofit sector, I’ve discovered several under-appreciated ways these innovations are making a positive impact:

Memecoin Fundraising

Six years ago, we introduced The Giving Block with a belief in the permanence of Bitcoin and Ethereum donors. Yet, the philanthropic spirit of meme coin holders has taken us by surprise.

The Baby Doge collective has given over half a million dollars to various animal shelters and initiatives worldwide, highlighting their strong commitment to animal welfare. Furthermore, they’re planning to introduce an API that simplifies crypto donations for their community members. This dedication to charitable giving seems deeply ingrained in the ethos of Baby Doge. They also set a new Guinness World Record by donating an impressive amount of pet food within a 24-hour period.

During this year’s price surge, BONK emerged as one of the most generously donated cryptocurrencies. Almost instantly, its community converted their gains into charitable contributions, focusing on animal welfare organizations in collaboration with The Giving Block. In development is an on-chain program and decentralized application designed to facilitate crypto donations to these charities. This platform streamlines the donation process by burning a minimal amount of BONK tokens and matching donations. We’re thrilled that this community, which has seen an 8,000% return on their investment over the past year, is now making a lasting commitment to philanthropy.

Quadratic Funding

As a crypto investor, I’ve long believed that the relationship between cryptocurrency and philanthropy is a reciprocal one. Meme coin projects serve as prime examples of this symbiotic bond. They harness the power of their communities to fund social causes, which in turn raises awareness for both the token and the cause it supports. But these collaborations don’t operate in isolation. The philanthropic approaches emerging from Web3 carry significant potential to transform traditional fundraising methods systemically. Some nonprofit organizations are already adopting quadratic funding models, which could revolutionize how they secure financial support.

As a crypto investor, I’ve come across the term “quadratic funding” many times, which was co-devised by Ethereum co-founder Vitalik Buterin. This innovative method has gained significant popularity in the Web3 community and is often referred to as a “mathematically optimal way to fund public goods within a democratic system.” Essentially, it’s an effective approach for funding various projects.

In December 2023, over 1,000 unique donors contributed a total of 2,971 donations to Gitcoin’s quadratic funding model, earmarked for six projects that will further the mission of the American Cancer Society and contribute to its life-saving efforts.

Nonprofit organizations looking to expand their base of donors have a fresh opportunity through quadratic funding. This approach offers a means to depart from conventional fundraising techniques and champion novel ideas.

Just like the humanitarian sector is exploring new avenues, numerous organizations, including the UNHCR and Mercy Corps Ventures, have begun experimenting with the delivery of aid using stablecoins. As these trials continue, the impact sector is inching towards fully embracing the potential uses of cryptocurrencies and blockchain technology.

NFT and Influencer Fundraising

As a researcher studying the evolution of digital fundraising, I’ve observed the lasting impact of NFT (Non-Fungible Token) charitable initiatives during previous market surges. Trailblazing projects like Women and Weapons raised substantial six-figure donations for Malala Fund, an organization dedicated to girls’ education. This pioneering act paved the way for a charitable giving culture in the NFT space.

As a researcher exploring the innovative landscape of blockchain technology, I’m excited about how projects like NodeMonkes are pushing the boundaries of charitable giving through Bitcoin-based ordinals. These initiatives enable creators such as Jack Butcher to educate collectors on the meaningful difference their NFT purchases make in the world.

there’s been a growing trend among Web3 influencers, including figures like “Leap” on Crypto Twitter, of encouraging their followers to contribute crypto for charitable causes. For instance, Leap successfully collected over $100,000 worth of Ethereum and Solana donations for cancer care and research.

Bottom Line

From my perspective as a researcher studying the trending dynamics of philanthropy, an increasing amount of charitable contributions in the realm of cryptocurrency has been reported, with estimates reaching tens of billions of dollars as the market continues to evolve. This burgeoning phenomenon is capturing the attention of nonprofit organizations due to its potential tax advantages for donors. Consequently, crypto fundraising has emerged as a significant area of focus within the nonprofit sector, and as long as cryptocurrency maintains its status as a prominent asset class, nonprofits will continue to prioritize crypto donors as vital supporters during the Great Wealth Transfer from older generations to Millennials and Zoomers.

Many smaller and mid-size nonprofit organizations may find the complex and varied crypto donor community intimidating. While a significant number of the Forbes Top 100 charities are currently raising funds in cryptocurrencies, a large proportion of these organizations lack the resources to handle major assets like Bitcoin and Ethereum, let alone explore more intricate topics such as NFTs (Non-Fungible Tokens) and meme coins.

Proactive philanthropists within the Web3 community will persistently offer groundbreaking chances for pioneering nonprofits. These actions will pave the way for some of the most captivating cryptocurrency-based charitable initiatives in the upcoming years. I’m equally enthused about crypto philanthropists who are taking a thoughtful approach by collaborating closely with charities rather than rushing ahead.

As a crypto analyst, I firmly believe that with the increasing number of nonprofits embracing cryptocurrencies, it’s essential for dedicated investors to act as educators and enlighten their preferred organizations about the fundamentals of Web3 technology. By doing so, we can significantly contribute to the ongoing growth and acceptance of crypto in this sector.

In the current digital landscape, an unprecedented number of nonprofit organizations are engaging with cryptocurrency for fundraising. This surge is primarily due to the active and generous contributions of individuals within the Web3 community, who consistently provide donations and enticing reasons to join the nonprofit sector.

The convergence of three key elements – the increasing adoption of nonprofits in the crypto sphere, groundbreaking Web3 innovations, and thriving bull market conditions – sets the stage for an exhilarating new era in crypto philanthropy. By continuing to pioneer creative philanthropic initiatives, displaying perseverance with our nonprofit allies, and being bountiful with our charitable donations, crypto will undoubtedly remain a rapidly expanding avenue for charitable giving within the nonprofit sector.