Crypto, Crypto Everywhere! What About in Philanthropy?

Nov 22, 2021

Is there a week that passes where you’re not hearing someone you know, or perhaps a business colleague speak about crypto? It seems that it’s a hot topic of conversation. New York City’s incoming mayor wants to make the city the crypto-capital of the world, especially since New York’s a city that lives and breathes money.

And if you’re really into crypto, then you know about the nearly $900 million in crypto that got liquated recently. It seems that crypto-madness is at a fever pitch, and many people want a piece of the pie because they imagine becoming wealthy or for the novelty of it. As Gordon Gekko said, and we see with crypto and some people, 'Greed, for lack of a better word, is good.'

But, how about crypto for social good and the betterment of human lives? As we know, there's plenty of money in the world (fiat or crypto). Yet, we still have hunger, disease, and need. We also know that younger generations want corporations and businesses to take a stand on social issues and be socially responsible. In other words, people still care about others (even when it doesn't seem so). Therefore, how does crypto play into philanthropy?

Accepting Cryptocurrencies at Nonprofits and NGOs

The largest grantmaking charity in the U.S. is Fidelity Charitable Trust. And as ever more donors park money there for future donations to nonprofits, it’s receiving cryptocurrency. In 2021, it received more than $270 million in crypto donations, paid into donor-advised funds (DAFs).

However, while that certainly makes the money managers happy, it’s not the only organization receiving crypto. Large, well-known nonprofits accept cryptocurrency donations, including the Red Cross, Save the Children, and UNICEF. And, small groups are also looking to take crypto.

While anyone who has invested in crypto knows that it's volatile, it's not stopping people from trying to get involved in the wild west of crypto. As a result, philanthropic organizations are getting nudged to accept the currency, especially by younger generations. When 16% of Americans have crypto investments, it's only inevitable that nonprofits will get asked to take it.

What If Technology Could Do Things Better?

We’ll see in the near future how crypto develops as more and more governments figure out how to regulate and tax capital gains. However, it does offer an interesting situation for philanthropy and social good. Essentially, it creates more efficiencies. For example, transfer fees are lower than fiat banks and faster. Also, donations get tracked from start to finish—essentially allowing for transparency.

It's no secret that, broadly speaking, nonprofits suffer from a trust factor, which continues to decline. In short, people want to help others who need their help. But, some don't want to give to nonprofits or NGOs where they have no idea what's happening with the money and where they don't see a measurable impact. Cryptocurrency allows for the precision tracking of financial donations. For people who care about the collective good, that’s a game-changer.

Over 700 million people live in extreme poverty, according to the World Poverty Clock. By global standards, it means they live on less than $2 a day. Here’s the deal, the world has the resources and technology right now to ensure that no adult or child goes to bed hungry nor lives in substance levels. So, what could technologies such as crypto offer?

The Crypto for the 100%

Cryptocurrency and technology could offer, and will, more paths beyond the way things have been done in the past. It’s inevitable, and it’s already changing. Aside from donors encouraging nonprofits to accept cryptocurrency, other groups are deciding to upend the idea of traditional philanthropy.

For instance, Anatha is the 'crypto for the 100%.' As they state, their movement looks to create ‘…new systems that are inclusive, fair, & regenerative.’ What does that mean? In short, for Anatha it means economic equality. When Anatha issues a new crypto-token, members of the network get an automatic distribution (25%). Also, Anatha partners with scalable nonprofits to support people who suffer the significant economic inequality.

Other Opportunities for Social Good with Cryptocurrency

Cryptocurrency is opening up whole new paths for the idea of philanthropy. The Giving Block allows donors to give to nonprofits, and instead of taking days for payments to clear processing, especially for payments overseas, the whole process takes about 10 minutes. Moreover, because the underlying technology of blockchain relies on thousands of computers to verify authenticity, security increases.

Founded in 2013, BitGive allows for faster, cheaper, and more secure financial support and help for people worldwide. A couple of years later, it announced GiveTrack™, to offer nonprofits an accountability and transparency tool for donors. It does it by sharing the finances and direct project information in real-time for supporters. Some leading organizations using the platform include Save the Children, Code to Inspire, and Black Girls Code.

In the 20th Century, it seemed as if people who wanted to participate in social good mostly considered supporting nonprofits and NGOs. However, that's changing for various reasons, aside from decreasing trust in the ability of nonprofit organizations. With the rise of B-Corps, impact investing, and for-profit social enterprises, there's a shift beyond charity and more toward empowerment, equity, fairness, and opportunity.

Bethnal Green Ventures is another example of how crypto is changing the social good space. The company invests in early-stage technology for good. In other words, it helps enterprises where technology gets used for scalable and impactful results around social and environmental work.

Where Do We Go From Here?

Let's face it, the technology behind cryptocurrency is not something broadly understood by the masses, and governments are trying to figure out how to regulate it. Moreover, it's an asset that's volatile and not for the faint of heart. Still, traditional philanthropy is past due for a shakeup and radical innovation.

Technology, including cryptocurrency, allows for new ideas and opportunities for socially-minded people to try new things. Again, the world has all the resources needed to eradicate some social challenges, such as poverty—today. It's had the capabilities and resources for a long time, but perhaps not the will. However, as technology continues to disrupt society and how we do, well—everything, new players and organizations will emerge seeking to empower and provide opportunities to those who've suffered economic inequality and inequity.