Bulletpoints:
– Decentralized finance (DeFi), decentralized autonomous organizations (DAOs) and nonfungible tokens (NFTs) are redefining how charities raise donations and distribute funds.
– There have been NFT-drop campaigns, as well as allowing people to pool their crypto funds in DeFi protocols that earn interest for a specific cause.
– Last year, UkraineDAO crowdfunded $6.1 million for a 1/1 Ukrainian flag NFT, donating the proceeds to nonprofit organizations in Ukraine helping those affected by the Russian invasion.
Crypto donations are quickly becoming more than just peer-to-peer Bitcoin and Ether transactions. Instead, new technologies such as decentralized finance (DeFi), decentralized autonomous organizations (DAOs) and nonfungible tokens (NFTs) are redefining how charities raise donations and distribute funds to those most in need. Through the use of ever-evolving crypto and blockchain-related technology, crypto philanthropists have witnessed “new wealth distribution mechanisms” never seen before.
Omar Antila, the Product Lead at Crypto for Charity, explains that “philanthropy has traditionally been seen as a high-cost-of-entry, individualistic activity, but with Web3, collective decision-making bodies like DAOs can use tools that streamline financial coordination and encourage more participation.” He goes on to discuss how crypto enables new innovative fundraising strategies, such as charitable NFT-drop campaigns, or allowing people to pool their crypto funds in DeFi protocols that earn interest for a specific cause.
In October 2022, several breast cancer-focused organizations began to implement NFTs to highlight Breast Cancer Awareness Month. Antila is also aware of many other philanthropic communities built around NFTs, which have raised support for many other causes, such as testicular cancer, human trafficking, and the war in Ukraine. Last year, UkraineDAO crowdfunded $6.1 million for a 1/1 Ukrainian flag NFT, donating the proceeds to nonprofit organizations in Ukraine helping those affected by the Russian invasion.
The potential of blockchain technology is immense when it comes to expanding what is currently possible in the nonprofit world. With increased transparency and efficiency of financial transactions, organizations can be sure that their funds are going to the right place at the right time. Moreover, with access to global capital, charities can now more easily access the funds necessary to carry out their mission.
The future of philanthropy looks incredibly bright, thanks to the innovative use of blockchain technology and its associated tools. From NFT-drop campaigns to DeFi protocols, charities have a wide variety of options to raise money and support the causes they care about. With the right tools and strategies in place, crypto philanthropists can ensure that the donations they make will benefit the communities they care about.