Spreading holiday joy through charitable giving with cryptocurrency
Bitcoin is a decentralized payment system which currently operates on the blockchain. It was first released in 2009 and is not bound to any government or organization, creating an anonymous currency that can be used anywhere around the world. The technology has been evolving rapidly over recent years with innovation coming from companies such as Ethereum who have created their own cryptocurrency called Ether, and Stellar Lumens who are developing a non-profit version of Ripple dubbed “Lumens.” In this environment of rapid change, it’s hard to predict where cryptocurrencies will go next but one thing is for certain: they’re here to stay.
Cryptocurrency is a form of currency that uses cryptography to secure transactions and control the creation of new units.
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The holidays are an ideal time to give back, and the development of cryptocurrency has opened up even more possibilities for charity endeavors. This was emphasized at Giving Tuesday 2021, the Tuesday following Thanksgiving, when the charitable fundraising portal The Giving Block raised almost $2.4 million in cryptocurrencies.
Some in the industry anticipate that crypto contributions will continue to rise as crypto philanthropy becomes a new subsector of the bitcoin economy. Alex Wilson, co-founder of The Giving Block, told Cointelegraph that the group collected roughly $4 million in crypto contributions last year and expects to receive over $100 million this year.
This surge, according to Wilson, is attributable in part to the fact that contributing bitcoin is more tax efficient than donating money. “Anyone who gives by December 31 will be eligible for a deduction for the tax year 2021.” This is a fantastic approach to counterbalance some of your advantages.” The Giving Block presently accepts crypto contributions from over 1,000 NGOs, including St. Jude, Save the Children, and United Way, according to Wilson. “We have a lot of agreements coming online next year, and we anticipate our growth to go up.” We expect to handle approximately $1 billion in contributions and collaborate with over 6,000 NGOs next year.”
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While a handful of NGOs have begun to accept bitcoin contributions, it’s worth noting that cryptocurrency philanthropy initiatives are being launched this Christmas season.
For example, Upbring Innovation Labs, a Texas-based charity dedicated to advancing technology in the nonprofit sector, created the Give Big TX Crypto Fund in early December. According to Ryan Park, Upbring’s vice president of innovation, the fund is a collaborative cryptocurrency effort including twelve Texas-based nonprofits:
“Think of it as a ’cause fund,’” says the author. The goal is to improve the quality of life in Texas. It’s also about demonstrating to organizations that they can develop by using emerging Web 3.0 technology. The overarching objective is for Texas to become a leader in crypto charity.”
The Give Big TX Crypto campaign is collaborating with Austin Pets Alive, Big Brothers Big Sisters Lonestar, Catholic Charities of Central Texas, and eight other groups, according to Park. He also said that the Texas Blockchain Council, a 501(c)(6) organization, is a part of this project because of the group’s work in developing blockchain across many businesses in Texas.
According to Kelsey Driscoll, senior innovation program strategist at Upbring, the campaign will take over 40 different kinds of cryptocurrency for contributions through December 31, all of which will be processed by The Giving Block. “When contributions are made, The Giving Block converts them to US dollars instantly, so taking crypto has been just as simple, if not easier, than receiving fiat donations,” she said. Driscoll also said that the r/Bitcoin subreddit group would match Bitcoin (BTC) donations given to any of The Giving Block’s recognized organizations.
This month, Pawthereum, a decentralized community-run enterprise that supports animal shelters, announced the beginning of a philanthropic cryptocurrency campaign. Pawthereum’s 12 Days of Crypto Giving campaign, according to John Weathers, community manager, enables crypto contributions to be made for particular initiatives that benefit animals in need. The Pawthereum project arose from a fork of the Grumpy Cat Coin joke cryptocurrency, which collected $70,000 in crypto money for the Sterling Animal Shelter in Massachusetts.
Pawthereum has collected $25,000 for Muttville Senior Dog Rescue, a San Francisco-based animal shelter that cares for dogs with special needs, thanks to crypto contributions. Since the campaign began on Dec. 14, close to $400,000 in cryptocurrency has been given, according to Weathers.
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This year, nonfungible tokens, or NFTs, are also being used to raise funds. Given that the market for NFTs is predicted to expand to $17.7 billion by the end of 2021, this industry is hosting one of the season’s major crypto charity events. This public auction, known as Right-Click, Give!, is held on the NFT platform Opensea. All profits from the auction will go to Blankets of Hope, a nonprofit that gives warm blankets to the needy while also teaching compassion to children in schools.
As an ardent NFT collector, Mike Fiorito, co-founder of Blankets of Hope, told Cointelegraph, he is well aware of how supportive the NFT community is as a whole. As a result, he anticipates the emergence of more NFT-focused humanitarian projects. “There are a lot of kind folks in the NFT field who are generating fortunes — large and little — and want to give back,” he added.
Park also said that the Give Big TX Crypto initiative allows NFT artists to collaborate directly with NGOs to give money from nonfungible token minting. “Many NFT drop artists want to collaborate with NGOs, and this is a chance to do so.” Two NFT initiatives have agreed to donate the revenues from their mints to our cause.”
Will charity cryptocurrency campaigns become popular?
Although there are presently just a few philanthropic bitcoin initiatives, the advantages of cryptocurrency contributions may lead to wider usage in the future.
While crypto assets donated to a registered charity in the United States are exempt from capital gains taxes, there are additional technical benefits. When it comes to crypto contributions vs money, for example, Nawzad Amiri, community leader for Pawthereum, told Cointelegraph that the transparency given by a blockchain network, as well as the speed of transactions, is striking.
Furthermore, according to data from The Giving Block, crypto donors may be willing to donate more to charity, with the average bitcoin gift amount on The Giving Block being $11,000. According to Giving USA, the average charitable gift for Americans in 2020 will be $737.
While the advantages may be obvious to some, education seems to be the most significant barrier to adoption. Despite the fact that Texas is becoming one of America’s greatest crypto capitals because to its welcoming attitude toward blockchain and mining power, Park said it has been difficult to recruit Texas NGOs to the Give Big TX Crypto campaign:
“We contacted roughly 60 NGOs and are working with a total of 12.” This seems to be a foregone conclusion, but there is still a long way to go in terms of educating the public about crypto philanthropy’s potential.”
Another issue worth highlighting is that, although NFTs may seem to be great gift assets, tax deductions are questionable. Fiorito said he’s still trying to figure out if giving NFTs is a tax-deductible event. “Because we are so early in the NFT space, this is a hazy region,” he said. Because of this ambiguity, the Right-Click, Give! Auction is now accepting bitcoin contributions through The Giving Block.
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Despite the challenges, crypto philanthropy has clearly opened up new doors of opportunity for a youth ready to give back. For example, Park pointed out that many of the NGOs involved in the Give Big TX Crypto campaign had a donor base that is over 70 years old. The average age of crypto users is 38 years old, according to data from The Giving Block, as Wilson pointed out:
“The folks giving here are people who live and breathe Web 3.0 or have held cryptocurrency for a long time.” One of the most important aspects of this right now is just informing those folks that this opportunity exists.”