Accepting crypto donations should be a top priority for nonprofits in 2024.

Here are 5 reasons why:

1. Tax Efficiency for Donors

   • 52 million Americans hold crypto. 15% of upper-income Americans who have acquired crypto did so over 5 years ago. Many are sitting on large taxable gains.

   • Tax-savvy donors will be motivated to donate appreciated crypto, just as donors have historically been motivated to gift appreciated stock. Nonprofits can minimize volatility and risk by immediately converting these donations into cash, just as they would with gifts of appreciated stock.

   • Yesterday, the SEC approved Bitcoin ETFs for some of the world's largest asset managers, including BlackRock, Fidelity, and others. Analysts predict $10-$100 billion of inflows into Bitcoin ETFs in 2024 alone.

   • The tools to learn about, acquire, and exchange crypto are getting more user-friendly. Global sentiment about the underlying technology is rising. The Bitcoin halving will happen in a few months. There are many reasons why donating crypto is likely to be one of the most tax-savvy ways to give in 2024, and nonprofits should be prepared to accept it.

2. Early Adoption Advantage

   • Accepting crypto donations earlier will give nonprofits a competitive edge, positioning them as strategic, forward-thinking organizations. Blockchains are permanent, immutable ledgers of record, and keep score of who began transacting when. Earlier activity will lead to increased visibility, support, and trust from potential & existing donors.

   • Early crypto activity will especially resonate with tech-savvy donors (not a bad demographic to impress), who will respect and support nonprofits that can leverage emerging technologies to their advantage.

3. Global, Ideological, Generational Reach

   • Crypto is global currency, activity, culture, and history. Organizations with the right approach will tap into a global donor base and more effectively scale communication of their mission, as well as more efficiently identify those most likely to be passionate supporters.

   • Many crypto donors are ideological -- invested (literally) in hopes of a better future. Organizations that accept crypto will signal a willingness to work towards a better future alongside these donors. The ideological tend to give generously.

   • Many crypto donors will be Millennials and Gen-Z, who might be experiencing financial success for the first time. Accepting crypto will be a permanent signal of awareness and preparedness for how to fundraise from the next generation(s).

4. Transparency and Accountability

   • Blockchains are public and transparent. Crypto will enable organizations to offer real-time, verifiable insight into how funds are used, enhancing trust and accountability, especially among:

     • Millennial and Gen-Z donors: "Millennial and Gen-Z donors want to see the direct impact of their philanthropic involvement. Organizations working with younger donors should be prepared to provide transparency in linking charitable contributions to measurable results."

     • Beneficiaries: Better insight into how an organization plans to help beneficiaries and their loved ones provides those who might be going through immense uncertainty an important source of stability and trust.

5. Deeper Connection with Donors

   • Crypto enables nonprofits to strengthen the positive giving feedback loop (Donate —> feel good about donating —> donate more / encourage others to donate). It’s on the donor to donate, but it's on the nonprofit to optimize how good the donor feels about donating.

   • At the root of generosity -- of an individual act of kindness, or a robust organization doing good work -- is connection. A recognition that we're in this together.

   • How exactly can crypto strengthen the positive giving feedback loop and enable deeper connection? How will almost every organization in the world leverage crypto eventually? I call this:

A Token of Appreciation

I donate to an organization. I receive an automated thank you email. Almost all of them are some version of:

Thanks for your donation, here's your tax receipt.

Usually a sentence or two about impact. Maybe an image.

But most thank you emails are bland, both in content and in visualization. White background, black text, basic.

Obviously, a boring, automated email which everyone looks at exactly twice -- once to "Mark as Read", once when filing taxes -- is not the best we can do.

An example: I went scuba diving with Nadine Bauer in September. Here's me diving a shipwreck :)

Nadine sent me this image as an NFT as a thank you for diving with her. You might have heard about NFTs in the context of wild valuations for cartoon projects. A lot of that discourse sensationalizes the speculation and misses the brilliance of the underlying technology.

Why do I appreciate this photo in NFT form, as opposed to if she had just emailed it to me?

The NFT provides context, permanence, and authenticity.

Context & permanence: The blockchain is a permanent ledger of record. By sending me this photo as an NFT, Nadine established the when for our shared experience in the public domain. Additionally, she gave me an asset which I can safely hold on to forever. No risk of a hard drive being wiped, computer being lost, or spilling coffee on it.

My favorite feature is that this asset holds immense value to me and no value to anyone else. I'd never want to sell it, and nobody would likely ever want to buy it. The opposite of speculation and financialization -- something much more meaningful. It's an asset that represents my life experience and memory, forever.

Authenticity: AI creates, crypto authenticates. As AI continues to improve, it is becoming increasingly difficult to distinguish real vs. fake. By sending me this photo in NFT form, from Nadine's authenticated account to mine, this token represents a photo, experience, and historical event that is provably real.

Imagine the impact of giving every donor permanent, visual, public recognition for their generosity. Everyone wins. Everyone connects more deeply. Here's how:

1. The donor wins because they feel more appreciated, more connected, and have been rewarded with a permanent token that visualizes the impact of their donation, and forever timestamps their support.

2. The nonprofit wins because they strengthen their connection with the donor and can leverage that relationship for future donations, referrals, and other engagement with the work. The nonprofit wins further by attracting new donors, as anyone in the world can discover these tokens and feel compelled to donate themselves or spread the mission.

3. The beneficiaries of the work win because the nonprofit is better funded, and -- if they ever wish to -- they can forever see and connect with those who helped them.

Now is the best time for organizations to begin setting up crypto infrastructure, and to be thinking about how to best leverage crypto to maximize impact.

It is crucial that organizations set up their crypto infrastructure strategically, in order to maximize safety, security, and simplicity for themselves and for their donors.

If you'd like to learn how, contact me!

From so many people who are genuinely curious but are mostly exposed to one-sided headlines lacking nuance, without time to dig deeper.

My first step in these conversations, and my goal today, is to provide accessible context for what you might have heard about crypto.

I hope that after reading you are more up to date on the bigger picture, not just the headlines.

I’ll start with 2 things you might have heard recently:

What you might have heard:

"Crypto is used to fund illegal / illicit activity"

The Bigger Picture:

1. Crypto allows anyone the freedom to transact with anyone else. Bad actors will abuse this freedom to do bad things. There is a very important discussion to be had about whether that means we should strip everyone of that freedom. 

The even bigger picture:

The following is a great place to start this discussion. Here's the pseudonymous "Punk 6529" thoughtfully explaining why “Freedom to Transact” is critical to our social infrastructure. The voice changer admittedly takes a bit to get used to, abstracting voice will sound much better in the near future (14 min).

The Bigger Picture:

2. The blockchain is a public ledger of record that exists forever. Using crypto is one of the stupidest ways to commit crimes, as immutable evidence of wrongdoing exists forever.

   Law enforcement agencies and fraud detection practices will improve & catch bad actors, it is simply a matter of when. Crypto, to the trained eye (or code), will likely be the easiest flow of funds to track. The permanence and transparency of blockchains will function as effective deterrents for financial wrongdoing & immorality.

   How you are remembered, forever, as a human being is something many people already consider quite strongly, even before we record everyone's transactions publicly and permanently.

The even bigger picture:

You might have heard, either from the Wall Street Journal or from the letter written by Sen. Elizabeth Warren and signed by more than 100 members of congress, that Hamas received “over $130 million” of crypto funding.

What you might not have heard is that the only source cited by Sen. Warren issued a follow-up clarification, strongly disputing the WSJ’s figure and Sen. Warren’s claims.

You might not have heard that 4 days after the WSJ corrected their article, Sen. Warren doubled down on her claims -- aware that her source disputed her claims and that the WSJ issued a correction -- and stated “it’s not about one report”, even though her letter only cites one report.

Most people don't have the time to check, days later, for article corrections or retractions. The initial headline drives the narrative, and a loud false narrative is much stronger than a well-researched true one.

For detailed aggregation of on-chain analysis regarding Hamas receiving crypto, please refer to this comprehensive write-up by Nic Carter.

What you might have heard:

"Crypto is full of speculators & gamblers"

The Bigger Picture:

Crypto is not widely accepted at gas stations or supermarkets yet. Until NFTs and smart contracts (I know you might have heard about those too 😉), the only thing you could do with crypto was keep it as a store of value, or trade it against other market participants.

So of course crypto is filled with speculators, because until recently, all you could do is either speculate against your local currency or speculate against other traders.

As non-speculative applications continue to become more widely adopted, the % of speculators in crypto will approach the % of the general population that are day-trading stocks or sports betting.

The even bigger picture:

Many non-speculative applications already exist.

Here are a few:

1. ENS (Ethereum Name Service)

   A single username for the internet that you can use across all platforms. Can function as your email, phone #, social media accounts, wallet, keys.

   Your ENS will also soon function as a secure log-in for every website you visit. This means your data is much safer against breaches AND you’ll never need a password again, saving you X emails informing you that your privacy has been violated and Y hours of having to reset your password, keeping track of the change, inevitably forgetting which new password you changed to, needing to reset again, rinse repeat.

   Watch Balaji Srinivasan discuss the importance of ENS in the internet age (7 min).

   

2. Getting a loan: Smart contracts enable globally favorable interest rates. Why? Digital collateral is immediately escrowed, and either the debt is paid and the collateral is immediately returned or the debt is unpaid and the collateral is immediately transferred to the lender. No debt collectors, no concern from the lender about not being repaid, no middlemen, no hassle.

3. AI creates, crypto authenticates:  AI can now create photo- and video-realistic deep fakes. When AI can create anything, having an immutable record of human interaction and social infrastructure to authenticate truth will be very valuable for maintaining order and fighting misinformation. 

I realize all of this might read a bit defensively, as in:

So you probably heard crypto was bad. Here's why it's not so bad.

Instead of:

Crypto will be extremely useful for you, and be an incredible force for good for the world.

I'm excited to share what I view as huge positives with you in future posts.

How nonprofits are able to leverage this technology to unlock massive new fundraising opportunities while distributing their mission & message more effectively.

How we'll be able to save the essence of our memories, experiences, and identity in deeply meaningful, secure ways.

I went through photo albums with Grandma of her world travels when I last visited. Amidst her fading memory, I think of how much she would value the ability to relive those experiences more vividly.

But historically, when I dive head first into the positive, I'm often met with:

Yeah sure that sounds great, but what about [insert negative crypto headline/narrative]

The positive is coming! But for today, I hope you found this helpful and received some clarity on What You Might Have Heard about crypto.

If you did, it would mean a lot if you subscribed! You'll get a high-quality, accessible write up directly to your email whenever a new post goes live.

I’d also love to hear if you have any followup questions, and learn what else you might have heard about crypto. Shoot me a message and I’d be happy to set up a time to talk directly or write about it in the future.

Thanks for reading!

-- Ben