The top five things to know about cryptocurrencies
Could cryptocurrencies represent a new revenue stream for your organisation? This article explains all about them and how they can be good for charities.
- Written by
- Matt Smith
- Added
- March 03, 2022
You can’t move on social media at the moment without hearing about cryptocurrencies (crypto) and non-fungible tokens (NFTs). It’s clear that there will be opportunities for fundraisers to explore, but it’s a bit of a minefield and really hard to know where to start!
In this short piece we explore the top five things to know about crypto…
1. What is the blockchain?
The blockchain is the digital ledger on which cryptocurrencies and NFTs are stored. Public blockchains provide a secure place to put information that everyone can add to, that no one can change, and that isn’t controlled by any single person, government, or company. So unlike in the traditional world of hard, physical currencies and systems of regulation, there isn’t one individual or company keeping track of everything. The responsibility for doing so is shared between everyone on that network.
As physical notes and coins disappear from society (and it is likely that we see physical currency all but totally disappear from our economies in the next 30 years) traditional and cryptocurrencies will start to look more and more alike. Crypto is the next chapter in money being digitised.
2. What are the platforms you should be exploring?
To support the rise of these new currencies, the most traded of which include Bitcoin, Ethereum, Ripple and EOS, we’re now seeing several platforms enter the crypto-philanthropic space to help charities receive, store and exchange these currencies.
The Giving Block are an online crypto fundraising platform, that is now working with causes across the globe. By using The Giving Block, crypto donors can easily find organisations they want to donate to through the Block’s donation platform and partners.
3. What charities have got involved with crypto already?
There have been numerous recent examples of charities working with, and raising money from, the crypto community. Firstly, Edinburgh Dog and Cat Home have received several donations from the Pawthereum community. The most recent has enabled the animal welfare organisation to partly-fund a new digital fundraising role which will help them further establish relationships in the crypto community.
Then in 2021, the Children’s Heart Unit Fund, working with The Giving Block platform, received crypto donations worth £38,000. One of the donors had themselves been supported by the charity his whole life – which shows that despite the new technology behind this way of giving, the motivations to give remain the same in crypto.
On the bigger end of the scale, Save the Children were recently chosen by the Munch Token community to benefit from their charitable efforts. This community regularly votes on which organisation should benefit next and has donated over four million dollars in total to worthy causes.
4. But what about NFTs?
Alongside cryptocurrencies, NFTs have seen a meteoric rise in popularity. These blockchain-enabled pieces of exclusive art and experiences are similar in many ways to the physical art and in-person experiences that have been central to charity auctions for decades. NFTs just bring this giving method into the 21st century.
Launched in late-2021, DoinGud is a new platform to watch in the NFT space. However, not recent NFT trials have not been without their controversies. World Wildlife Fund (WWF) launched their Non-Fungible Animal campaign in early 2022 but were met with significant backlash on social media due to the tokens’ environmental implications. (This was despite the charity being very clear that they were using technology that minimised the impact on the planet).
5. But isn’t it really risky?
There are several risks and ethical considerations when fundraising through crypto and NFTs. As with all parts of the internet, crypto servers come with an environmental cost. Whilst other big risks include fluctuations in value and the danger of the technology being used as part of elaborate pyramid schemes and money laundering.
Having robust policies, donation terms and conditions, and working with trusted partners is essential. As we have discussed, The Giving Block is doing great work to make this easier and safer for charities. But ultimately, charities should be treating the risks and opportunities in crypto with the same scrutiny as their traditional income streams. Environmental, investment fluctuations and money laundering are all familiar risks in more traditional income generation methods – these should not be barriers to entry for organisations when considering new ways to raise money.
In summary, there is a huge opportunity for charities to engage with the incredibly generous and future-thinking crypto community. The risks do need to be identified and considered, but there are now the case studies and established partners to support. It is a great time to for charities of all sizes to dive into this world and learn more about how they could work with this new generation of donors.
Editor’s note: we would like to extend a huge thank you to Matt Smith, Head of Development & Innovation at our partner THINK Consulting Solutions, for penning this new piece on cryptocurrency and fundraising.
If you have tried out cryptocurrencies at your organisation and have a success story or more tips to share, please get in touch with SOFII by emailing joe@sofii.org
