Charity and Crypto – The Perfect Combination
The Giving Block, a platform that helps nonprofits accept crypto donations, has recently published a report analyzing the potential of digital assets in the charity sector.
In a previous article, we mentioned The Giving Block as one of the rare platforms that lets users donate with Zcash. In the past year, they've formed partnerships with many of the biggest charities, blockchain firms, NFT projects, and mainstream brands.
2022
Last year, despite the significant drop in cryptocurrency prices, the number of charitable donations increased. Non-profit organizations actively joined The Giving Block, exceeding the figures of 2021.
The main features of the year can be summarized as follows:
1. USDC was the main donation instrument, totaling more than $22.7 million. This can be explained by the fact that users often choose stablecoins for their convenience and growing popularity worldwide, as noted in Circle's report.
2. Large donations (over $5000) accounted for more than 90% of all payments at the time of receipt. However, the importance of microtransactions cannot be ignored, as they also demonstrated good results when combined.
3. Crypto donors pay little attention to market cycles, use donations in the form of NFTs, and do not seek to choose a specific time to donate, although they do increase activity during certain holidays.
4. Anonymity is not a priority for a large portion of crypto donors. More than 79% of them have chosen to share their personal information, despite The Giving Block's lack of obligation to do so, as they independently combat illegal transactions.
5. Crypto donors often make donations to receive tax benefits and raise their social status in society.
Key campaigns of 2022
The war in Ukraine became the main topic of 2022, with the authorities managing to collect over $54 million in cryptocurrency for the country's defense in less than two weeks. The Giving Block also stepped in and helped facilitate transfers totaling $724,415 to non-profit organizations working in Ukraine, such as CARE, Save the Children, and Food for Life. These organizations provided urgent assistance to refugees and those affected by the war, with Circle playing an active role in facilitating the transfers.
Circle is proud to demonstrate solidarity with Ukraine by supporting The Giving Block’s Ukraine Emergency Response Fund to encourage the crypto and Web3 community and users of USDC everywhere to support humanitarian relief efforts,says Chief Strategy Officer and Head of Global Policy for Circle Dante Disparte
The second focus area includes three countries – Kenya, Sierra Leone, and Uganda - where funds were donated to provide clean water access to nearly 20,000 people, totaling around $2 million.
Among the American projects, the highest amount ($9.4 million) was donated to a Maryland-based university researching air disinfection to prevent future pandemics. The Balvi Philanthropic Fund, founded by Vitalik Buterin, was one of the major donors.
We have the technology to prevent airborne spread of respiratory diseases. But if we are going to use these technologies to control the next pandemic, we must invest in it now, before it starts. This generous gift from Balvi is going to help us lay the groundwork to make that happen,says Donald K. Milton, a Professor and Director of the PHAB Laboratory at the University of Maryland
It's worth noting that The Giving Block was able to facilitate dozens, if not hundreds, of various fundraisers, ranging from tree planting initiatives in African countries to purchasing meals for underprivileged school children in India.
Prospects for cryptocurrency donations
According to many experts' expectations, the increase in cryptocurrency prices should boost donations and vice versa, but during the bear market, donations remained stable. According to The Giving Block team, cryptocurrency philanthropy has reached such a scale in recent years that it can not only counteract high market volatility but also surpass it in the long run, according to their forecasts:
1. By 2024, all major nonprofit organizations will accept cryptocurrency payments.
2. NFT philanthropy will continue the trend that started in 2021. Since then, tens of millions of dollars have been raised through the sale of artwork in Web3.
3. Tax incentives will become an even bigger stimulus for people donating their investments to charity, unless regulators make changes to existing rules.
4. By August 2027, The Giving Block expects over $1 billion in donations over time, and by 2032, over $10 billion.
Final words
Throughout 2022, cryptocurrency donations have shown a positive trend: more non-profit organizations are participating, contributions are increasing, and so on. Based on their internal model, The Giving Block has provided very optimistic forecasts, but notes that many factors remain uncertain, such as regulation, the global economic situation, and the volatile rise of Bitcoin. These factors could significantly influence the final forecast results, but they will not destroy the existing trend towards the widespread use of cryptocurrency in charitable giving.
