The holidays are the perfect time of year to give back, and the cryptocurrency boom has created even more opportunities for charitable endeavors. This was highlighted during Giving Tuesday 2021, the Tuesday after Thanksgiving which saw more than $ 2.4 million raised in cryptocurrencies from the non-profit fundraising platform The Giving Block.
As crypto philanthropy becomes a new subsector of the crypto economy, some in the industry believe that crypto donations will continue to rise. Alex Wilson, co-founder of The Giving Block, told Cointelegraph that last year the organization raised about $ 4 million in crypto donations, noting that this year, more than $ 100 million in crypto donations will likely be received.
According to Wilson, this growth is due in part to the fact that donating cryptocurrencies is more tax efficient than donating fiat. โAnyone who donates before December 31 can claim a deduction for tax year 2021. This is a great way to offset some of your earnings.โ Wilson added that more than 1,000 nonprofits currently accept crypto donations through The Giving Block, some of which include St. Jude, Save the Children and United Way. "Next year, we have many partnerships that are being implemented and we expect our growth to accelerate. We estimate that we will process almost $ 1 billion in donations next year and we will work with more than 6,000 nonprofits. "
Cryptocurrency donation drives for the holidays
While several nonprofits have started accepting crypto donations, it is 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 that seeks to promote technology in the nonprofit sector, launched Give Big TX Crypto Fund. Ryan Park, Upbring's vice president of innovation, told Cointelegraph that the fund is a joint cryptocurrency campaign that works 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 adopt new Web 3.0 technologies to move forward. The broader goal overall is for Texas to emerge as a leader in crypto philanthropy. "
Park shared that the Give Big TX Crypto campaign is partnering with organizations such as 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 in different industries in Texas.
Kelsey Driscoll, Senior Strategist for the Innovation Program at Upbring, further told Cointelegraph that the campaign will accept more than 40 different types of cryptocurrency for donations through Dec. 31, all of which are facilitated by The Giving Block. "When donations are made, The Giving Block automatically converts them to US dollars, so accepting crypto has been as easy as accepting fiat donations, if not easier," he commented. Driscoll added that the r / Bitcoin subreddit group will match Bitcoin (BTC) donations when making contributions to any of the charities supported by The Giving Block.
Pawthereum, a decentralized community project that supports animal shelters, 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 crypto 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 crypto funding for 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, close to $ 400,000 worth of crypto has been donated since the campaign launched on December 14.
Related: Crypto is a boys club? The future of finance is genderless
Non-fungible tokens, or NFTs, are also being tapped for donations this year. Since the market growth for NFT sales is expected to reach $ 17.7 billion By the end of 2021, this sector will launch one of the largest crypto charity events this season. Known as Right-Click, Give !, this is an auction open to the public hosted on the NFT 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 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 charity drives will emerge. "There are a lot of nice people in the NFT space who are making fortunes, no matter how big or small, and they want to give back," he said.
Park also noted that the Give Big TX Crypto campaign allows NFT artists to work directly with nonprofits to donate proceeds from the minting of non-fungible tokens. โMany artists doing NFT releases 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 crypto charity campaigns catch on?
Although there are currently only a handful of charitable crypto campaigns present, the benefits associated with crypto donations may result in widespread adoption in the future.
While donors from the US. you don't have to pay capital gains taxes In any crypto asset you donate to a registered non-profit organization, there are other technological advantages. For example, Nawzad Amiri, a community leader for Pawthereum, told Cointelegraph that the transparency provided by a blockchain network, along with the speed of transactions, is impressive when it comes to crypto versus fiat donations.
Also, the statistics of The Giving Block found that crypto donors may be willing to contribute more to charity, considering that $ 11,000 is the average crypto donation size on 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 to some, education appears to be the biggest challenge hampering adoption. For example, although Texas is becoming one of the largest crypto capitals in the United States due to its friendly attitude towards blockchain and mining power capabilities, Park shared that it has been a challenge to bring Texas nonprofits into the Give Big TX Crypto campaign:
โWe are reaching out to about 60 nonprofits and are partnering 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 crypto philanthropy. "
Another challenge worth mentioning is that while NFTs may appear as ideal gift assets, there is uncertainty regarding tax deductions. Fiorito explained that he is still trying to determine if the NFT donation is considered a tax deductible event. "This is a cloudy area because we are very early in NFT space," he commented. Due to this uncertainty, the right mouse button hits! Auction also accepts cryptocurrency donations through The Giving Block.
Related: The biggest drops and sales of NFT in 2021
Challenges aside, it's 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 for many of the nonprofits that partner with the Give Big TX Crypto campaign is over 70 years old. According According to statistics from The Giving Block, the average age of crypto users is 38, as Wilson added:
โThe people who donate here are people who live and breathe Web 3.0 or who have had crypto for a long time. A big part of this now is just educating those people that this opportunity exists. "
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