The holidays are the perfect time of year to give back, and the rise of cryptocurrencies has created even more opportunities for charities. This is revealed during Giving Tuesday 2021, the Tuesday after Thanksgiving, in which raised more than $ 2.4 million in cryptocurrencies on the non-profit fundraising platform The Giving Block.
As cryptophilanthropy becomes a new subsector of the cryptocurrency economy, some in the industry believe that crypto donations will only continue to rise. Alex Wilson, co-founder of The Giving Block, told Cointelegraph that last year the organization raised around $ 4 million in crypto donations, noting that this year, they will likely be received. more than USD 100 million in donations in cryptocurrencies.
According to Wilson, this growth is partly due to the fact that donating crypto is more tax efficient than donating in fiat. “Anyone who donates before December 31 can claim a deduction for tax year 2021. This is a great way to offset some of your earnings. “ Wilson added that more than 1,000 nonprofits currently accept crypto donations through of The Giving Block, some of which include St. Jude, Save the Children, and United Way. speed up. We estimate that next year we will process nearly $ 1 billion in donations and work with more than 6,000 nonprofits. “
Cryptocurrency donation drives for the holidays
While several nonprofits have started accepting crypto donations, it’s also notable that campaigns focused on crypto philanthropy are launching this holiday season.
For example, in early December, Upbring Innovation Labs – a Texas-based organization seeking to advance technology in the nonprofit sector – launched the Give Big TX Crypto Fund. Ryan Park, Vice President of Innovation at Upbring, told Cointelegraph that The fund is a joint cryptocurrency campaign working with twelve Texas-based nonprofits:
“You can think of this as a ’cause fund’. The cause here is to make Texas a better place to live. It’s also about showing nonprofits that they can embrace the new technologies of Web 3.0 to move forward. The overall goal is to see Texas emerge as a leader in cryptophilanthropy. “
Park shared that the Give Big TX Crypto campaign is partnering with organizations like Austin Pets Alive, Big Brothers Big Sisters Lonestar, Catholic Charities of Central Texas, and eight other nonprofits. He added that the Texas Blockchain Council – a 501 C (6) organization – is also part of this initiative given the group’s involvement in advancing blockchain across different industries in Texas.
Kelsey Driscoll, Senior Strategist for Upbring’s Innovation Program, further told Cointelegraph that the campaign will accept over 40 different types of cryptocurrency for donations through December 31, all provided by The Giving Block. “When donations are made, The Giving Block automatically converts them into US dollars, for what i accepted Cryptocurrency has been as easy as accepting fiat donations, if not more, “ remarked. Driscoll added that the r / Bitcoin subreddit group will match Bitcoin donations ( BTC ) when contributions are made to any of the charities supported by The Giving Block.
Pawthereum, a community-run decentralized project that supports animal shelters, has also launched a charity cryptocurrency campaign this month. John Weathers, Community Manager for Pawthereum, told Cointelegraph that their 12 Days of Crypto Giving campaign allows cryptocurrency donations to be made for specific projects that help animals in need. The Pawthereum project was created as a fork of the cryptocurrency meme project Grumpy Cat Coin , which raised $ 70,000 in cryptocurrency funding for the Sterling Animal Shelter in Massachusetts.
Most recently, Pawthereum raised $ 25,000 through crypto donations for Muttville Senior Dog Rescue, a San Francisco-based animal shelter that cares for dogs with special needs . According to Weathers, nearly $ 400,000 worth of cryptocurrencies have been donated since the campaign was launched on December 14.
Non-fungible tokens, or NFTs, are also being leveraged for donations this year. As the NFT sales market growth is expected to reach USD 17.7 billion At the end of 2021, this sector is launching one of the biggest cryptocurrency charity events this season. Known as Right-Click, Give !, this is an auction open to the public hosted on the NFTs Opensea platform. The auction ran through December 24, and all proceeds will be donated to Blankets of Hope, a charity that provides warm blankets to the homeless, while also teaching kindness to children at school.
Mike Fiorito, co-founder of Blankets of Hope, told Cointelegraph that, as an avid NFT collector, he is well aware of how welcoming the NFT community is as a whole. As such, he believes more NFT-focused charities will emerge. “There are a lot of nice people in the NFT field who are making fortunes – no matter how big or small – and want to give them back. “, He said.
Park also noted that the Give Big TX Crypto campaign is allowing NFT artists to work directly with nonprofits to donate proceeds from the minting of non-fungible tokens. “Many artists who make NFT drops are looking to work with non-profit organizations and this is an opportunity to do so. We have two NFT projects that donate the proceeds of their mints to our fund. “
Will cryptocurrency charity campaigns catch on?
Although there are currently only a handful of crypto charities, the benefits associated with crypto donations may lead to widespread adoption in the future.
Although US donors do not have to pay income tax of capital for crypto assets that you donate to a registered non-profit organization, there are other technological advantages. For example, Nawzad Amiri, community leader from Pawthereum, told Cointelegraph that the transparency provided by a network Blockchain, along with the speed of transactions, is impressive when it comes to cryptocurrency donations versus fiat.
Additionally, statistics from The Giving Block found that crypto donors may be willing to contribute more to charity, noting that $ 11,000 is the average size of crypto donations. in The Giving Block. Giving USA donation data found that $ 737 was the average charitable donation for Americans in 2020.
While the benefits may be clear For some, education appears to be the biggest challenge hampering adoption. For example, although Texas is becoming one of the largest cryptocurrency capitals of United States due to its friendly stance towards blockchain and mining power capabilities , Park shared that it has been a challenge to attract Texas nonprofits to the Give Big TX Crypto campaign:
“We contacted about 60 nonprofits and partnered with 12 in total. It looks like this would have been a success, but there is still a long way to go in terms of educating the world about the potential of cryptophilanthropy. “
Another challenge worth mentioning is that while NFTs may seem like ideal donation assets, there is uncertainty around tax deductions. Fiorito explained that he is still trying to determine whether the donation of NFT is considered a tax deductible event. “This is a murky area because we are at a very early stage in the NFT space,” he commented. Due to this uncertainty, the auction Right-Click, Give! Also accepts cryptocurrency donations through The Giving Block.
Challenges aside, it is clear that cryptophilanthropy has opened a new door of opportunity for a generation eager to give back. For example, Park noted that the donor base of many of the nonprofits associated with the Give Big TX Crypto campaign is over 70 years old. According to statistics from The Giving Block, the median age of cryptocurrency users is 38, as Wilson added:
“The people who donate here are individuals who live and breathe Web 3.0 or who have had crypto for a long time. time. A big part of this now is just educating those people that this opportunity exists. “
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