Crypto for Good: 3 Ways Nonprofits can Embrace Blockchain
Hundreds of millions of dollars were donated in cryptocurrency in the last year. For nonprofits, it’s time to accept that blockchain has arrived, and is here to stay.
The Lupus Foundation of America now accepts cryptocurrency. Even in this market downturn, we’ve seen nine figures in crypto assets poured into charitable organizations in just the last six months. A standout is Ripple (XRP), taking corporate social responsibility (CSR) to a level unmatched by most Fortune 500 companies, with three colossal charitable contributions (among others) commanding headlines:
● $4,000,000: The Ellen Degeneres Wildlife Fund
● $29,000,000: Donors Choose
● $50,000,000: 17 Colleges and Universities
This trend is not a new one. At the turn of the year, we saw Fidelity Charitable report that they had managed to rake in $69M in crypto alone by the close of FY2017. This all sounds well and good, but there is a problem:
Less than 1 percent of nonprofits accept cryptocurrency donations. Heret is how your nonprofit can embrace blockchain to elevate your impact:
1. Partner with Blockchain Innovators
Historically, nonprofits have been viewed as luddites, dragged kicking and screaming into each successive technological epoch. Couple the blockchain community’s omni-decentralization proclivity with few traditional nonprofits accepting cryptocurrency, and what you get is crypto investors creating their own 501c3 anytime they want to do something impactful. On top of this, innovators devising social good blockchain applications are doing the same, rather than collaborating with existing organizations in the respective social impact sectors. Regardless of blame attribution, it’s time to bridge the gap.
The very nature of blockchain cries out for an improved class of charitable organizations: enhancing data transparency, cutting administrative costs, and reducing transaction burden
Our first baby step at the Lupus Foundation of America (LFA) was to open wallets to accept cryptocurrency. We recognized that all of this is built on the transformative technology that is blockchain. This is why we went beyond accepting crypto, launching our Blockchain Initiative to conduct outreach to key blockchain stakeholders for guidance and partnerships that could improve our organization. For us, blockchain data management could mean better informed medical professionals, improved clinical trial design and putting power back into the hands of patients when it comes to their health data. For all nonprofits, this could mean gamifying the donor experience, incentivized engagement chains and the most consummate tool for authenticating impact since the advent of the internet.
2. Accept Cryptocurrency Donations
The Lupus Foundation of America (LFA) decided to accept crypto because we recognized a trend that extends well beyond the perimeters of cryptocurrencies; there is a prodigious - and largely ignored - social impact culture within the blockchain community. For those who think accepting crypto donations is tantamount to lunacy, LFA accepts our cryptocurrency donations via a custom solution by The Giving Block. It converts crypto to USD upon receipt and we receive dollars in our bank account without a payment processor. In other words, it’s as painless as accepting a credit card.
I ask that you consider for a moment that just fifteen years ago nonprofits were skeptical about credit card donations. Within the blink of an eye, their superior convenience made them ubiquitous, and overnight every nonprofit accepted them. Cryptocurrency will be no different, but with additional layers of tax, convenience and security benefits for donors. Crypto donors pay no capital gains tax and the total gift is tax deductible. Because of this dramatic tax benefit for those who donate crypto, any and all wealth stored in the cryptocurrency asset class is wholly inaccessible to most nonprofits. Throw in the fact that crypto is the most secure way to give, and it’s not so far-fetched to think this could become the preferred option for donors.
3. Blockchain Corporate Social Responsibility (CSR)
It has been our experience that organizations in this space are in search of legitimacy, warmly greeting conversations around sponsorships and partnerships beyond. Blockchain is in the midst of a PR crisis of epic proportions. Companies in this space who are looking for legitimacy are making CSR investments in an echochamber by sponsoring social impact conferences and activities within their own community. This is of course an important and necessary facet of the culture, but they would be well-advised to diversify. The traditional nonprofits who offer these organizations sanctuary from the crypto PR crisis will get vital funding, and in return will have partners who are likely to be far more collaborative than the average Fortune 100 institution.
The very nature of blockchain cries out for an improved class of charitable organizations: enhancing data transparency, cutting administrative costs, and reducing transaction burden. In addition to looking for partnerships on blockchain use cases, it is time for nonprofits to make blockchain organizations their vested and non-vested partners. We at LFA will continue to look for ways to cultivate partnerships with blockchain organizations, grow a crypto revenue stream, and operationalize this technology to help those suffering with lupus. For the sake of your respective organization’s mission, I hope to see a paradigm shift as more nonprofits leverage this transformative technology and the powerful community building it.